Canaccord Genuity on Apple, Harley-Davidson, and Yahoo

By Canaccord Genuity  OCT 24, 2012 12:35 PM

Apple unveils a smaller iPad, Harley-Davidson posts its best gain in more than a year, and Yahoo touches a 52-week high.


The following are excerpts from Canaccord Genuity analysts' commentaries.

Apple (NASDAQ:AAPL): I guess bigger is better. 

Apple unveiled a smaller iPad Tuesday as it looks to compete with products offered by  Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG). The “iPad mini” will have a 7.9” screen and pricing will start at $329. This is well above Amazon’s $199 Kindle Fire and Google’s Nexus 7 and well below the $499 starting price for the iPad.

Some Wall Street analysts questioned the pricing of the product, wondering if the lower price will drive buyers away from the high-margin iPad, while failing to take significant share from its competitors. One commented, “It's coming in the range that most were grumbling about and that, quite frankly, we're a little bit concerned about. It's a little confusing at this juncture to try and figure out how it fits into the line-up. Is it going to cannibalize the more expensive iPad?"

Shares of Apple traded higher early Tuesday in anticipation of the release, but retreated into the red after CEO Tim Cook wrapped up his presentation. In addition to the smaller version, an updated full-size iPad was launched, with improved graphics and processing speeds, priced at the usual $499 entry point for iPads.

Harley-Davidson (NYSE:HOG): Wild Hogs – best Tim Allen movie since The Santa Clause 3: The Escape Clause.

The iconic US motorcycle maker posted its best gain in more than a year after touting new models headed to dealerships by 2015. Harley-Davidson said its new bikes coming by 2015 will benefit from the company’s focus on its namesake brand, as product development had been hurt by lower revenue and other brands it owned. Keith Wandell, who became CEO in 2009, recently sold the Buell and MV Agusta brands.

Harley-Davidson has also cut its new-product development time to three years from five or six, he said. Bikes such as the $7,999 Super Low, less pricey and easier to handle, are winning new riders, a group whose growth has outpaced increasing sales to traditional customers this year. Separately, Harley has benefited from reduced costs through renegotiating labor contracts at factories in Pennsylvania and Wisconsin. Harley is “largely finished” revamping its production system, which gives it more flexibility, Wandell also said. Yahoo (NASDAQ:YHOO): We found all of this through Google.

Yahoo touched a 52-week high after new CEO Marissa Mayer outlined her turnaround strategy for the biggest US Web portal, emphasizing mobile technology and personalized services. The third-quarter results announced Monday weren’t astounding, but they were better than analysts anticipated. Most importantly, Yahoo’s net revenue crept higher for the third straight year. Mayer, the company’s fifth CEO in four years, said on a conference call with analysts that she aims to grow as fast as competitors in online search, display advertising, mobile applications, and products such as email.

Mayer also plans to focus on small acquisitions of less than $100 million rather than large deals, and expects to move workers around within Yahoo instead of cutting large groups of employees. “Our vision and direction for Yahoo is to make the world’s daily habits inspiring and entertaining,” Mayer said. “We’ll become a growth company by inspiring and delighting our users.”

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