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It's Finally Time To Buy This Dividend King
January 25, 2018 6:02 pm|Comments (0)

Source: imgflip

2017 saw the largest number of US retail store closings in history, which the media has dubbed the “retail apocalypse”. However, in reality, rumors of traditional retail’s demise are greatly exaggerated.

Source: Hoya Capital Real Estate

In fact, traditional retail sales have been growing around 2% a year since 2005, right alongside the overall US economy. Better yet? In 2017, a strengthening economy meant that brick & mortar retail growth actually accelerated. This is why, despite over 10,000 total store closings, the number of US retail stores actually increased by over 4,000.

Source: Hoya Capital Real Estate

In addition, shopping center REITs as a whole have continued to post slow but steady same-store net operating income or NOI growth throughout this so called “apocalypse”.

Source: Hoya Capital Real Estate

The bottom line is that shopping center REITs, like all real estate, are made up of both high, medium, and low quality names. This means that there continue to be Grade A industry leaders with world class management, strong balance sheets, and strong growth prospects.

Let’s take a look at Federal Realty Investment Trust (FRT), which is not just the gold standard in its industry, but arguably one of the best REITs you can own period.

More importantly, thanks to the recent sell-off in REITs, Federal Realty is now trading at some of the most attractive valuations in years. That means that this is likely a great time to add the only REIT dividend king to your diversified high-yield dividend portfolio.

The Undisputed King Of Shopping Center REITs

Source: FRT Investor Presentation

Federal Realty Investment Trust may not be a massive REIT, but since its founding in 1962 (making it one of the oldest REITs in the world), it has proven an exceptional ability to make investors rich. It’s done so thanks to its exemplary management team, led by CEO Donald Wood, who took over the top spot in 2002 after serving for four years as COO and CFO.

Specifically, FRT has focused on quality over quantity, being highly selective about only purchasing or developing shopping centers in the nation’s premier property markets. Today, it owns 104 centers making up 24.1 million feet of leasable square footage leased to over 2,800 tenants.

Source: FRT Investor Presentation

Federal Realty’s centers are located in very high density and very affluent areas, which is why it enjoys the industry’s best average rent per square foot by far.

Source: FRT Investor Presentation

The REIT is also highly diversified by both industry subcategory, as well as tenants, with no customer making up more than 2.9% of annual rent.

Source: FRT Investor Presentation, Earning Supplement

Federal Realty’s focus on top-tier shopping centers located in prime locations also means it has consistently enjoyed the industry’s top lease spreads. This means that FRT is able to obtain higher rents anytime it signs a new lease, whether with a new tenant (if an old one has failed or left) or when renegotiating expiring leases.

Source: FRT Investor Presentation

In the most recent quarter, Federal Realty’s lease spread came in at a very healthy 14%, with 400,000 square feet of space leased at an average rental rate of $ 38.24 per square foot.

This helped it to achieve same-store YOY operating income growth of 2.6%, 4.4% when including redeveloped properties. And speaking of redeveloped properties, this is the key to the REIT’s strong growth prospects going forward.

That’s because in recent years FRT has been investing into non retail properties, such as offices, hotels, and apartments (it owns over 2,052 rental units).

Source: FRT Investor Presentation

In the coming years, management says it wants 20% of rent to come from non retail properties. Not only will this provide greater diversification but because the hotels, offices, and apartments are located on top or near its shopping centers, they help to further drive higher traffic that benefits its tenants. That, in turn, means continued strong leasing spreads.

But wait it gets better. Federal Realty’s plans to invest more heavily into non retail means it has a much larger growth market to target in the future, about $ 4 billion over the next 15 years. The cash yields on these investments are usually about 7% to 8% which is much higher than traditional shopping centers (6.3% cash yield historically).

This brings us to another major competitive advantage, FRT’s industry-leading low cost of capital. This ensures strong AFFO yield spreads (cash yield minus cost of capital) on all its investments.

Approximate AFFO Weighted Average Cost Of Capital 2.9%
Historical AFFO Cash Yield On Invested Capital 6.3%
Approximate AFFO Yield Spread 3.4%


Sources: management guidance, FastGraphs, Morningstar

The low cost of capital is thanks largely to two things. First, the REIT has been very conservative with debt, which is why it has one of the highest investment grade credit ratings in all of REITdom (more on this later).

Second, Federal Realty’s track record of successfully adapting to challenging and constantly shifting industry conditions is literally the best in the business. That’s both in terms of growing its funds from operation or FFO (operating cash flow) per share far faster than lower quality rivals, as well as being the only dividend king REIT in the world.

Source: FRT Investor Presentation

Basically, Federal Realty Investment Trust is the bluest of REIT blue chips and the ultimate sleep well at night (SWAN) stock. The disciplined and very shareholder friendly corporate culture has proven to be incredibly resilient which is why the REIT rightfully trades at a substantial premium to its lower quality rivals (more on this in a moment).

However, that premium helps to ensure low costs of equity which allows management to, in concert with retained cash flow and modest amounts of low cost debt, ensure it has ample low cost liquidity with which to grow.

In fact, today FRT’s liquidity (remaining borrowing power + cash) stands at $ 781 million, which is enough to fund about three years worth of its planned investments.

Combined with its existing redevelopment pipeline, as well as its ongoing opportunistic acquisitions, Federal Realty is likely to remain one of the fastest growing shopping center REITs in America.

Shopping Center REIT FFO Growth Projections

Source: Brad Thomas

Or to put another way, Federal Realty is perfectly positioned to take advantage of America’s accelerating economy and rising consumer spending which bodes well for its long-term dividend growth prospects.

Dividend Profile: Excellent Income Growth And Risk-Adjusted Return Potential

REIT Yield 2017 FFO Payout Ratio 10 Year Projected Dividend Growth 10 Year Potential Annual Total Return 5 Year Beta Risk Adjusted Potential Total Returns
Federal Realty Investment Trust 3.2% 67% 5% to 7% 8.2% to 10.2% 0.337 24.3% to 30.3%
S&P 500 1.7% 50% 6.2% 7.9% 1.0 7.9%


Sources: management guidance, GuruFocus, FastGraphs, yCharts, CSImarketing, multpl.com

Ultimately, REIT investing is all about the dividend. That means that investors need to pay particular attention to the dividend profile which is composed of three parts: yield, dividend safety, and long-term growth prospects.

As one might expect from a dividend king, Federal Realty offers a very safe payout courtesy of one of the industry’s lowest FFO payout ratios. But of course, there’s more to dividend safety than just a low payout ratio. One also needs to make sure that a REIT isn’t drowning in debt.

REIT Forward Net Debt/EBITDA EBITDA/Interest Fixed Charge Coverage Ratio Debt/Capital S&P Credit Rating
Federal Realty Investment Trust 5.4 5.5 4.1 56% A-
Industry Average 5.8 3.4 NA 62% NA


Sources: FRT Investor presentation, earnings supplement, Morningstar, CSImarketing, FastGraphs

Fortunately, Federal Realty always takes a long-term approach to business, which means a highly conservative balance sheet. That includes below average leverage ratio, a very strong fixed charge coverage ratio, and an interest coverage ratio that’s much greater than its peers. The REIT also has the lowest amount of variable rate debt (1%) in the industry.

That leads to one of the strongest investment grade credit ratings of any REIT in America, which is what helps to ensure: very low cost of capital, a high cash yield spread on new investments, and strong long-term growth.

Better yet? Like most REITs, Federal Realty is a low volatility stock. In fact, over the past five years, it’s been 66.3% less volatile than the S&P 500. This makes it an excellent choice for low risk investors, such as retirees.

All told, Federal Realty’s long-term dividend growth potential of 5% to 7% means that it should be capable of about 9.2% annual total returns. That may not seem very exciting, but you need to keep two things in mind. First, given the overheated valuations of the S&P 500 today, FRT should be able to beat the market over the next decade. And given its status as one of the highest quality REITs in the world, as well as its low volatility, this means it offers far superior risk-adjusted total return potential.

In addition, this Grade A industry leader, which is rarely on sale, is now trading at the most appealing valuation in about four years.

Valuation: Still Not Cheap But Worth Buying At Fair Value

Chart
FRT Total Return Price data by YCharts

REITs have had a rough year, basically returning nothing while the red hot S&P 500 has gone parabolic. Federal Realty meanwhile has done far worse. However, while some might see that as a sign to stay away, I view it as a potentially good buying opportunity.

REIT P/AFFO Historical P/AFFO Yield Historical Yield
Federal Realty Investment Trust 21.1 19.2 3.2% 3.0%
Industry Median 11.0 NA 5.3% NA


Sources: Hoya Capital Real Estate, FastGraphs, GuruFocus

Now it’s important to keep in mind that on a price/FFO basis, FRT is nowhere near “cheap”. After all, it is still trading at a huge premium to its peers, as well as higher than its historical norm.

However, as a dividend focused investor, I generally like to compare a stock’s yield to its historical norm, and here things look a lot better. Specifically, Federal Realty’s yield is now slightly above its 13-year median and compared to its five-year average yield, it looks like a potentially good buying opportunity.

Source: Simply Safe Dividends

Of course, backwards looking valuation metrics can only tell us so much. After all, profits and dividends come from the future. This is why I like to use a long-term discounted dividend model to estimate a stock’s fair value based on the net present value of its future payouts.

Forward Dividend 10 Year Projected Dividend Growth Terminal Growth Rate Fair Value Estimate Dividend Growth Baked Into Current Share Price Discount To Fair Value
$ 4.00 5% (conservative case) 3% $ 106.74 4.5% -17%
6% (likely case) 4% $ 123.11 -1%
7% (bullish case) 5% $ 146.69 15%


Sources: FastGraphs, GuruFocus

I use a 9.1% discount rate because since 1871 this is what a low cost S&P 500 ETF would have generated, net of expenses. Thus I consider this the opportunity cost of money.

However, because any discounted cash flow model requires estimating the smoothed out future growth rates, there is a large amount of inherent uncertainty associated with this approach. This is why I use a variety of what I consider to be realistic growth models, preferably based on long-term management guidance. In this case, FRT expects to grow FFO/share at 5% to 7.25% a year over the long-term.

When we run the figures, we find that indeed Federal Realty doesn’t appear undervalued. Based on my best estimate of its most likely growth scenario. In fact, I estimate that the stock is pretty much at fair value right now.

However, under the Warren Buffett principle of “better to buy a wonderful company at a fair price than a fair company at a wonderful price”, purchasing FRT is still potentially a good idea. That is assuming you understand the risks associated with the stock, especially the realities of its interest rate sensitivity.

Risks To Consider

There are three risks I think are worth considering before buying Federal Realty Investment Trust.

First, while the REIT does have excellent diversification of its rent in terms of tenants, it is worth noting that some of its largest customers are indeed struggling.

For example, The Gap (GPS), and Ascena Retail Group (ASNA) have been struggling in recent years not just with declining sales in weak stores but with an overall decline in their brands. Similarly, LA Fitness, while e-Commerce proof, is facing increased competition from smaller boutique gyms.

Now keep in mind that none of these tenants represent a substantial amount of rent, so FRT’s dividend safety isn’t likely to be put at risk even if they were to fail entirely. However, in the event of continued decline, it could take some time for management to find new tenants to replace them which could result in short-term FFO/share growth weakness that could hurt the short-term dividend growth rate and share price.

Another potential risk to keep in mind is that Federal Realty isn’t a large enough REIT to fully fund its various growth endeavors. For example, its redevelopment pipeline largely represents joint ventures and partnerships with other developers that means that there is a risk that some of its projects might end up being delayed or even canceled if some of its partners fall upon hard financial times.

Finally, we can’t forget that diversifying into non retail properties can be a double-edged sword. That’s because FRT has the most experience in traditional retail, and developing office, hotel, and apartment real estate is not exactly in management’s wheelhouse.

And since real estate development is a highly complex and localized endeavor, there is no guarantee that FRT will be able to finish its projects on time or on budget. That might mean it fails to hit its 7% to 8% cash yield targets on its redevelopment pipeline which could result in FFO/share growth missing its long-term targets.

What about interest rates? That’s certainly one of the biggest things that REIT investors worry about which is understandable given that REITs can, at times, be highly interest rate sensitive.

Source: Hoya Capital Real Estate

Usually, there is an inverse relationship between a REIT’s beta to the S&P 500 (volatility relative to the market) and beta to a REITs’ yield compared to 10-year Treasury yields.

This is because a REIT’s beta (to the stock market) generally is lower the longer the leases are. This makes intuitive sense since the longer the leases the more stable the cash flow that funds the dividends.

However, longer leases also mean slightly higher inflation risk. That’s because, while rental escalators generally have inflation baked into their formulas, the exact formula is fixed until a new lease is signed or an existing one renegotiated.

The good news is that FRT’s 8.2-year weighted average remaining lease duration is not that large, which explains why its beta to yield is slightly below the industry average.

Source: Hoya Capital Real Estate

Keep in mind that beta to yield (interest rate sensitivity) is cyclical. This means that short-term price sensitive investors, such as those that retiring soon and plan to use the 4% rule, need to understand that there is a real risk of potentially losing money in any REIT if long-term rates spike and you are forced to sell at the bottom.

But don’t let that scare you away from REITs entirely because historically, commercial real estate has been an excellent long-term income and wealth compounder.

That’s because REIT interest rate sensitivity is both cyclical and mean reverting. That means that over the past 45 years, the actual correlation between REIT total returns and 10-Year yields (proxy for long-term rates) is effectively zero (actually slightly positive).

Sources: NAREIT, St. Louis Fed

Note that the R Squared of 0.02, which indicates that since 1972, 10-Year Treasury yields have explained just 2% of REIT total returns. Basically, this means that, over a long enough period of time, REIT investors should not worry about rates at all. That’s because they are largely irrelevant to long-term total returns.

For example, since 1972, equity REITs have increased in value 85% of the time only suffering 7 down years in the past 45 years.

This includes times where interest rates hit all-time highs (10-year Treasury Yield 16% in September 1981). In fact, here’s how equity REITs did as a sector between 1972 and 1990. This was during the fastest period of interest rates in US history as well as a period of steadily declining Treasury yields.

Year 10-Year Yield (Start Of The Year) Equity REIT Total Return
1972 6.09% 8.0%
1973 6.54% -15.5%
1974 7.0% -21.4%
1975 7.53% 19.3%
1976 7.80% 47.6%
1977 7.4% 22.4%
1978 7.94% 10.3%
1979 8.95% 35.9%
1980 11.13% 24.4%
1981 12.68% 6.0%
1982 14.14% 21.6%
1983 10.8% 30.6%
1984 11.67% 20.9%
1985 11.17% 19.1%
1986 9.08% 19.2%
1987 7.18% -3.6%
1988 8.26% 13.5%
1989 9.01% 8.8%
1990 8.43% -15.4%


Source: NAREIT, St. Louis Federal Reserve

In fact, since 1972, equity REITs have handily beaten the S&P 500, on both an absolute and inflation-adjusted basis.

Asset Type 45 Year Annual Total Return 45 Year Inflation Adjusted Annual Total Return Growth Of $ 10,000 In Inflation Adjusted Dollars
Equity REITs 12.8% 6.4% $ 409,583
S&P 500 10.6% 8.6% $ 163,070


Sources: NAREIT, Moneychimp.com

How is that possible? Because the current narrative that “REITs are bond alternatives” is incorrect. Bonds are fixed coupon assets, whose value is purely derived from: remaining duration, the coupon payment, and current interest rates (usually inflation expectation driven).

Equity REITs, on the other hand, are growing organizations whose management adapts over time to varying industry and economic challenges to keep its property base, cash flow, and dividends growing.

But what about costs of capital? If rates are high, then debt is expensive, and so REITs can’t grow profitably, right? Actually not true, because if rates are very high then cap rates are low and so cash yields on new acquisitions are also higher.

In addition, REITs match their debt duration to their lease duration, thus minimizing cash flow (and profit) sensitivity to interest rates.

Source: FRT Investor Presentation

For example, 99% of Federal Realty’s debt is fixed, and over the past three years, it’s managed to both refinance at lower rates. More importantly, the REIT has refinanced for longer bond duration than its weighted average remaining lease duration of 8.2 years.

Or to put it another way, FRT makes sure that the spread between cash yield on invested capital and its cost of capital is fixed. This ensures that its profitability on new investments is constant, no matter what rates are doing.

What happens after the bonds mature though and interest rates are much higher? Well, that’s where people fail to appreciate the beauty of REITs; specifically that REITs are good inflation hedges.

This is because interest rates are usually high when the economy is strong and thus, inflation is usually higher. REITs are able to thus offset rising inflation via higher rents.

Basically, when FRT’s bonds do mature if interest rates are significantly higher than they were when the bond was sold, the new rental rate it can obtain on the property it purchased with the debt will rise as well. Thus, the cash yield spread on invested capital remains highly stable over time.

This explains both how REITs in general, and Federal Realty in particular, have been able to so consistently compound investor wealth over time; in all manner of economic and interest rate conditions.

Source: NAREIT, Index = 100 in 1972

Bottom Line: Federal Realty Investment Trust Is The Ultimate SWAN REIT And Potentially Worth Buying Today

Please don’t get me wrong, I’m not saying the Federal Realty Investment Trust is necessarily a screaming bargain right now. Nor am I predicting that this is the bottom for this REIT or any other. After all, no one can predict short-term stock prices and it’s certainly possible that FRT and REITs, in general, might have a bad year if interest rates rise sharply.

However, knowing that interest rates are NOT a threat to REITs in the long-term, what I ultimately care about is buying the top quality and time-tested names in a growing industry. That means dividend stocks with: strong balance sheets, growing cash flows and dividends, and a proven ability to adapt over time to grow in any economic, interest rate and political environment.

Federal Realty Investment Trust is unquestionably a Grade A SWAN stock that offers all of these features. And with the price now at fair value (something that’s rare for a stock of its caliber in an overheated market), I have no qualms about recommending it to anyone looking for a highly safe and steadily growing income stream.

In fact, should FRT remain at current prices (or fall) in the coming weeks, I plan to add it to my own high-yield retirement portfolio.

———————————————————————————–

Studies show that most investors have underperformed the stock market by about 80% over the past 20 years due to a large number of mistakes, including market timing, improper portfolio structure, and poor stock selection.

Investor In the Family And Seeking Alpha are proud to bring you the 2018 Do It Yourself Investing Summit from Jan. 22nd to Jan. 26th. This summit brings together 21 of Seeking Alpha’s top investing minds (including yours truly) to highlight numerous priceless: investing principles, as well as ideas and tips about the market, economy and individual stocks for 2018.

I hope you’ll join us for this can’t-miss event and gain access to this treasure trove of knowledge that can ultimately save you a lot of: time, money, and can help you to achieve your financial dreams.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Tech

Posted in: Cloud Computing|Tags: , , , , ,
China's Tech Revolution: Tencent Owns Screen Time In China
December 17, 2017 12:46 am|Comments (0)

Series Introduction:

This will be a four-part series on China’s rapid technological growth in the past few years. Each part will focus on a different investment you could make today in order to get a piece of China’s booming technology sector.

Tencent Overview:Chart

TCEHY data by YCharts

If you spend any amount of time in Beijing or Shanghai, you’ll notice something interesting almost right away. No one is carrying cash or credit cards, and almost no one uses their cellphone number as their primary means of communication. Instead, they’re using an app called WeChat, which is similar to having Facebook (FB), PayPal (NASDAQ:PYPL), Skype, and text messaging all bundled together into one app. Tencent (OTCPK:TCEHY) (OTCPK:TCTZF) owns this application, which has over 950 million active users.

Tencent’s revenue growth has been astounding, and analysts expect that trend to continue into the future:

The reason for this massive growth is because Tencent owns people’s screen time in China. Whether you’re paying bills, playing a game, talking with friends, or hailing a taxi, you never have to leave Tencent’s world.

Speaking of games, Tencent also just happens to be the world’s leader in mobile gaming based on revenues. It’s currently ahead of Apple (AAPL), Microsoft (MSFT), Sony (SNE), King (KING), Electronic Arts (EA), Zynga (ZNGA), etc. What’s even more impressive is that despite being the top player in this area, it still grew its gaming revenue by 39% in the past year, and its market share in the space is continuing to increase.

Tencent has accomplished this dominance in the gaming sphere by partnering with a lot of the major players in the space to bring online versions of FIFA, Call of Duty, NBA 2K, and other extremely popular games to China.

Another interesting area where Tencent operates is streaming. Basketball is a perfect example of its foresight into this space. The popularity of the sport in China has exploded over the past decade, thanks in large part to Yao Ming. So what did Tencent do? It went out and struck a deal with the NBA to stream games in China. 65 million people watched the NBA finals last year from their phones in China through Tencent.

Besides gaming and streaming, Tencent’s other two major areas are social networks and advertising, which grew by 51% and 55% in the past year, respectively. Tencent is a $ 488 billion company that is still growing like a start-up. If you scroll back to the revenue chart above, you’ll see that the company’s revenue is expected to double by 2019.

Tencent’s social networks are particularly interesting to me. We’ve already discussed WeChat a little, but it has another app called QQ that has 850 million active users. Both QQ and WeChat together dominate China’s mobile payment space. Today, QQ and WeChat have over 300 million bank accounts linked to their mobile payment system.

As if all this wasn’t enough, QQ also has an application called QQMusic, which is considered to be the Spotify of China. This is an area where I anticipate Tencent will see a lot of growth moving forward.

Growth Potential:

Tencent has numerous potential catalysts that could push the stock price higher, but there are a handful that I want to specifically point out that are quite promising.

The first is in the gaming space, specifically with e-sports. China has the world’s largest video game market, which is expected to generate about $ 27.5 billion in sales this year. This incredibly large video game market has spurred an immense interest in e-sports in China and other Asian countries. In fact, the Olympic Council of Asia recently announced that it would be including e-sports at the Asian Games in Hangzhou in 2022.

E-sports have grown so popular in Asia that a crowd of more than 40,000 people recently packed into a stadium to watch two of South Korea’s biggest gaming stars play each other head-to-head. Tencent has a stranglehold on this market. The company recently signed a deal with the city of Wuhu to build an e-sports university and a stadium for events.

Tao Junyin, the market director of a top e-sports content company recently said, “Tencent has a controlling power in the whole industry, so we have to find a way to work with Tencent. You either die or you go Tencent.” Tencent has a stranglehold on the e-sports market in Asia and will benefit tremendously from its rapid growth.

Another area where the company could see growth is the music streaming space. Tencent owns QQ music, KuGou, and Kuwo, which together make up over 75% of China’s music streaming market.

(Source)

Tencent has exclusive online distribution deals with Sony Music, Warner Music Group, and Universal Music Group. Its deals with the three largest music labels and dominance of market share put Tencent in a great position to control China’s music streaming market, which is relatively immature at the moment.

While China is the world’s most populous country, with over 1.3 billion people, it is only 12th in the world in terms of recorded music revenue. That’s up from 14th in 2015 according to the International Federation of Phonographic Industry (IFPI). This jump was largely due to the 30.6% growth in streaming and China’s 20.3% growth in music revenue, which was almost four times the 2016 global average of 5.9%.

Despite these impressive growth numbers, China’s music industry is still lagging behind the rest of the world. This gap won’t last forever, and as China begins to catch up with everyone else, Tencent stands to be the main beneficiary.

Finally, I just wanted to quickly point out that China’s mobile internet use is only expected to grow faster in the coming years, something that will clearly benefit Tencent.

(Source)

Risks:

There are two main risks I want to point out before you invest your money into Tencent. The first is its valuation. After everything we just discussed, it should be no surprise that you’re going to have to pay a premium to get into this name. Tencent’s 51.69 P/E ratio currently reflects that.

Tencent has enjoyed a nice run-up over the past year, so some short to medium-term weakness certainly wouldn’t surprise me. If you plan on investing money that you may need within the next year, Tencent might not be the best investment for you. That being said, I’m a long-term investor, so some short to medium-term weakness would allow me to add to my current position at a cheaper price.

The second risk comes with investing in almost any Chinese company, and that’s the risk of regulation. Any regulations in China dealing with the internet could make life more difficult for Tencent and potentially limit its capabilities.

Conclusion:

Tencent seems to be doing everything right. They are major players in almost every facet of China’s tech revolution, which is why some people expect Tencent to become the world’s biggest company by 2025.

If you want to own some of China’s technology revolution, Tencent is one of the best places to start. Stay tuned for Part 2 of this series coming in the next few days.

Author’s note: If you would like to follow along with my China Series and other analysis, I would encourage you to hit the follow button next to my name at the top of the page. I enjoy interacting with my followers, so please comment below!

Disclosure: I am/we are long TCEHY.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Tech

Posted in: Cloud Computing|Tags: , , , , , , ,
AT&T and Time Warner Say Proposed Mega Merger Is ‘Pro-Consumer’
November 29, 2017 12:15 am|Comments (0)

AT&T and Time Warner argued on Tuesday that their proposed $ 85.4 billion merger was “pro-competitive” and “pro-consumer,” as they sought to refute U.S. Justice Department allegations that the deal breaks antitrust law.

In a joint court filing, the companies focused on rebutting government efforts to show that AT&T, which owns pay-TV provider DirecTV, would raise rates for rival pay-TV companies to use Time Warner’s movies and TV shows.

They also argued that the government was wrong to worry that the deal would hamper the development of online video.

They did not mention President Donald Trump or the White House. Trump has repeatedly criticized Time Warner’s CNN news unit and announced his opposition to the deal before last year’s presidential election, saying it would concentrate too much power in AT&T’s hands.

Democratic Sen. Richard Blumenthal, who is skeptical of the deal, said last week he was nonetheless worried that the antitrust issue was being used for political reasons. Other lawmakers have expressed similar concerns.

The Justice Department last week sued AT&T to block its planned acquisition of Time Warner.

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In the filing on Tuesday, the companies said that they operate in highly competitive markets which will remain competitive after they close the deal.

They noted that streaming service Netflix has 100 million subscribers globally, while tech firms Apple, Google and Facebook were investing billions of dollars in video. Hulu and Amazon were becoming contenders in video distribution, while others, like social messaging company Snapchat, were starting to enter the market, they added.

“Against this backdrop, the proposed merger of AT&T and Time Warner is a pro-competitive, pro-consumer response to an intensely competitive and rapidly changing video marketplace,” the companies said in the filing.

“This transaction presents absolutely no risk of harm to competition or consumers.”

The trial will be heard by Judge Richard Leon at the U.S. District Court for the District of Columbia.

Leon was nominated to the court by former Republican President George W. Bush and is no stranger to high-profile cases. Leon signed off on the Justice Department’s 2011 deal which allowed Comcast to buy NBC Universal and has heard a number of private antitrust cases. In the 1990s, he worked on House of Representatives panels looking at the Iran-Contra affair and the Whitewater controversy.

Termination date for the deal is April 22, 2018.

Tech

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Cloud Computing wins again; this time, as a 13-1 shot at the Preakness
June 17, 2017 9:55 pm|Comments (0)

Cloud Computing, which went off as a 13-1 shot, denied Kentucky Derby winner Always Dreaming a chance at the Triple Crown and likely confused …
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In Defense of the Reality of Time
June 9, 2017 3:20 pm|Comments (0)

In Defense of the Reality of Time

Time isn’t just another dimension, argues Tim Maudlin. To make his case, he’s had to reinvent geometry. The post In Defense of the Reality of Time appeared first on WIRED.
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Now is the absolute worst time to buy an iPhone
March 5, 2017 4:20 pm|Comments (0)

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Apple is about to commit infanticide on the iPhone 7.

The device—which is great, and just a few months old—will likely be blown to unrecyclable smithereens by the upcoming iPhone 8, if rumors are any indication. Sure, it’s always true that a shiny new iPhone’s just around the corner, but there’s reason to believe the next iteration of Apple’s iconic gadget will be such a substantial leap forward that you’d be foolish to invest in a device now.

Here’s the big thing: A report in the Wall Street Journal Tuesday indicated that Apple will dump the Lightning port on the iPhone 8, replacing it with USB-C. In layman’s terms, the cords you currently use to power your phone or listen to music will be rendered useless, doomed to haunt your junk drawer or some far-off landfill forevermore. Read more…

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Watch the Adventure Time Couch Gag for The Simpsons
October 22, 2016 4:00 pm|Comments (0)

Watch the Adventure Time Couch Gag for The Simpsons

The 28th season of the long-running Fox comedy debuts on Sunday, with Pendleton Ward returning to sing a special version of his show’s theme song. The post Watch the Adventure Time Couch Gag for The Simpsons appeared first on WIRED.
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Why APIs Are Worth The Time And Attention Of IT Professionals
September 9, 2016 3:40 pm|Comments (0)

IT professionals who have yet to be convinced that API management could be useful need look no further than Google’s plan to acquire Apigee, an API management platform. It’s the latest in a string of similar offerings that highlight the importance of application programming interfaces in today’s IT organization.


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Elon Musk takes press inside the Gigafactory for the first time
July 28, 2016 2:00 am|Comments (0)

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Tesla let the press into its giant new battery-producing plant, called the Gigafactory, for the first time Friday. 

Experts told Wired the factory will be necessary to power Musk’s dream fleet of EVs and hybrids (the company’s goal is 500,000 cars a year). Currently, Tesla’s battery production is outsourced to Asia, a costly and slower option. The new domestic factory, however, is expected to cut costs by 30 percent and is a one-hour plane ride away from the company’s headquarters in Palo Alto, California. The 3,200-acre plant is located in Reno, Nevada.

Musk also told the BBC he wants to see more of these soon, “in Europe, in India, in China … ultimately, wherever there is a huge amount of demand for the end product.” Read more…

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These earpieces will let you understand a foreign language in real time
May 17, 2016 10:35 pm|Comments (0)

Earbuds

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Traveling in a foreign country and using Google Translate or a dictionary to help you communicate with locals? Waverly Labs has developed a real-time earbud translator so you can put that dictionary down: the Pilot earpiece.

Full story: http://on.mash.to/1NxkGeW Read more…

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