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Hot Stocks: Google Inc. (Nasdaq: GOOG) Spreads Beyond Search With Groupon Bid
Google Inc. (Nasdaq: GOOG) is gunning for even greater Web dominance in 2011 by announcing an aggressive move in the online advertising industry, as well as a game-changing entrance into the rapidly growing e-book market.
Google is close to sealing a deal to buy online coupon company Groupon for $5.3 billion, according to people familiar with the matter. This would be Google's biggest purchase to date. The two-year-old Groupon's popularity has skyrocketed since its November 2008 start, making it a target for Internet companies wanting a stronger hold on local advertising.
"This would basically get Google the feet on the street for what they would never build themselves," Jason Helfstein, an Oppenheimer & Company (NYSE: OPY) analyst, told The New York Times.
Hot Stocks: Caterpillar Moves Into Mining with $8.6 Billion Bid for Bucyrus
Caterpillar Inc. (NYSE: CAT), the world's leading manufacturer of construction equipment, yesterday (Monday) said it would pay $8.6 billion for Bucyrus International Inc. (Nasdaq: BUCY) – a maker of large-scale surface and underground mining machinery.
Caterpillar said in a statement the deal would allow the company to continue its expansion into mining and gain from the "robust long-term outlook for commodities." The company is betting that emerging markets' growth will "push demand" for coal and "everything that comes out of the ground."
Caterpillar will pay $7.6 billion for Bucyrus and assume another $1 billion of its debt. The deal values Bucyrus at $92 a share, which is a 32% premium to the company's Nov. 12 closing price of $69.92.
Hot Stocks: Dell Aims to Double Sales of Service Businesses in Three Years
After losing a bidding war for a highly-sought-after acquisition target, many companies would pull in their horns and take time to regroup before venturing back into the murky mergers and acquisitions (M&A) pool.
But personal-computer icon Dell Inc. (Nasdaq: DELL), which lost out in a highly-publicized bidding war for 3Par Inc. (NYSE: PAR), is forging ahead with an aggressive multi-billion dollar acquisition plan.
Computer companies are increasingly relying on acquisitions to broaden their product offerings and make inroads on competitors' market share.
Hot Stocks: Ford Motor Co. (NYSE: F) Takes Pole Position Among Automakers
Ford Motor Co. (NYSE: F) yesterday (Tuesday) furthered its lead among U.S. automakers, reporting record-breaking third-quarter profits.
The world's most profitable automaker reported record third-quarter net income of $1.69 billion, up 68% over the same period a year ago. The company also said it is paying down debt faster than planned as new models boost its U.S. market share.
Excluding some items, profit was 48 cents a share, beating the 38-cent average of 12 analysts' estimates compiled by Bloomberg. By comparison, the automaker recorded income of $997 million in last year's third quarter and adjusted per-share profit of 26 cents.
Hot Stocks: Southwest Airlines Takes Aim at Bigger Rivals With $1.4 Billion Deal for AirTran
In a deal that turns up the heat on its bigger rivals, Southwest Airlines Co. (NYSE: LUV) yesterday (Monday) announced plans to buy discount carrier AirTran Holdings Inc. (NYSE: AAI) for $1.4 billion.
By nabbing AirTran, Southwest is making a move that supports its long-term growth strategy and targets large network carriers with a large East Coast presence such as Delta Airlines Inc. (NYSE: DAL) and US Airways Group Inc. (NYSE: LCC).
"This absolutely changes things," said Gary Kelly, Southwest's chairman and chief executive officer on a call with analysts.
The deal will allow Southwest to expand into airports serving major hubs like Atlanta, Washington D.C., Boston, Baltimore and New York City, he added.
The move puts Southwest in head-to-head competition with Delta in Delta's home base of Atlanta. The buyout, funded mostly with debt, will also give Southwest a bigger slice of the market in cities like Boston and New York, where it has been expanding.
Eventually, the low-cost carrier will expand into international markets, with flights to Mexico, the Caribbean, Canada and possibly South America, Kelly told CNNMoney.com.
"It will be several years before you see Southwest airplanes in international markets, but it's going to happen," he said.
Hot Stocks: Hewlett-Packard Continues its Business Makeover with ArcSight Acquisition
Hewlett-Packard Co. (Nasdaq: HPQ) yesterday (Monday) took another step toward becoming a more diverse software-based company by agreeing to buy ArcSight Inc. (Nasdaq: ARST) for about $1.5 billion in cash.
Palo Alto, California-based H-P will pay ArcSight investors $43.50 a share, a 24% premium over the stock's closing price on Sept. 10. ArcSight makes security software to help companies identify suspicious activity on their corporate networks.
The deal is the latest in a string of acquisitions designed by H-P to lower its reliance on lower-margin computers and servers.
"HP wants to expand from their traditional hardware offerings — printers and computers and servers — and they've gone into more services and software," Dave Novosel, an analyst at corporate-bond research firm Gimme Credit in Chicago, told Bloomberg News. "This is something that's a little bit different for H-P. This is not where they've had a strength in the past."
H-P in April kicked off the spending spree by buying 3COM for $2.7 billion and smartphone-maker Palm Inc. for $1.2 billion. H-P also acquired Fortify Software Inc., another security firm, and Stratavia Inc., a database and application automation company based in Denver. Terms for those purchases weren't disclosed.
Hot Stocks: TECO Energy Inc. (NYSE: TE) Is Turning Investors On to Profit
The stock has jumped 7.75% in just the past month, is up more than 30% in the past year, and it pays a generous 4.7% annual dividend.
So here's what it is all about.
TECO, which is based in Tampa, provides electricity to 667,000 customers and natural gas to 330,000 individuals in west central Florida. It also operates a coal mining operation in Kentucky and a small utility in Guatemala.
Since 2003, TECO – formerly called Tampa Electric – has reshaped itself into a regulated utility from a diversified energy company. It sold $4 billion of assets and reinvested the proceeds in regulated utility projects with attractive returns. The regulated units, Tampa Electric and Peoples Gas, now generate 90% of TECO's profits. TECO's $3.52 billion market cap and $3.40 billion in annual sales make the company one of the smaller utilities in the United States.
Hot Stocks: OGE Energy Corp. (NYSE: OGE) Is Electrifying Investors' Portfolios
Utilities have been red-hot in the past month, as subscribers to my private advisory service – The Strategic Advantage – have earned double-digit profits on power generators from Vermont to Arizona.
Let's take a look at one of my favorites now: OGE Energy Corp. (NYSE: OGE), the parent company of electric utility Oklahoma Gas and Electric Co. and natural gas pipeline operator Enogex LLC.
OGE exemplifies our summer theme: Low-risk asset growth, stable earnings and rising dividends. The stock has performed very well for us – it's up more than 11% this month. OGE also pays a 3.7% dividend.
We've talked a lot about utilities, but it is hard to overstate their importance. Businesses need electricity to run production lines, operate computer servers, manage inventory, and light buildings. A power outage that only lasts a few minutes can cost a business thousands of dollars, because machines need to be readjusted so that products can be correctly assembled.
Oklahoma Gas and Electric is the utility unit of OGE and provides electricity to nearly 800,000 customers in Oklahoma and western Arkansas. It is a sizeable utility with $3.14 billion in annual sales and a $3.83 billion market cap. OGE mainly generates electricity from natural gas because the utility receives excellent distribution rates from Enogex.