by Robert Hsu | June 9, 2012 10:32 am
U.S. stocks that focus on the growing affluent consumer in China are doing very well as I’ve mentioned in prior reports.
Here are four company updates of stocks we recommend to take advantage of their strength in China.
CNOOC Limited (NYSE:CEO) received a report from ConocoPhillips China Inc., the Operator of the Penglai 19-3 oilfield, stating that a small amount of oil leaked to the sea late at night on June 3 when a safety device on a hose coupling opened in response to an abnormality during oil transfer.
The automatic isolation system kicked in immediately to secure the source of the leak as designed, and at maximum only 0.6 tons of oil was released. Cleanup started immediately, and by the next afternoon there was no spilled oil detectable by the monitoring system. Oil spill liability has become an important issue for offshore oil companies such as CNOOC. The effectiveness of safety devices like the ones used here makes offshore drilling safer and cleaner, reducing this liability.
Apple (NASDAQ:AAPL) is reportedly planning to replace Google (NASDAQ:GOOG) Maps software with its own mapping program as the default mapping system on its iPhone and iPad devices. This may gain AAPL more control over user experience, etc.
According to the reports, the plan has been in works for a while but sped up as sales of Android smartphones passed sales of iPhone. I think this will give consumers another reason to buy the iPhone instead of Android-based phones.
Separately, a district court judge declined to grant a ban on Samsung‘s (PINK:SSNLF) Galaxy Tab 10.1 tablet in the U.S., saying that it cannot do so prior to the U.S. Court of Appeals for the Federal Circuit issuing a mandate in the patent suit Apple first leveled at Samsung last year.
AAPL, however, can renew the request once that has happened. Apple and Samsung are close competitors and now collectively hold nearly 50% of the smartphone market share. Canaccord Genuity technology analyst Michael Walkly calculated that the two enjoy a combined 99% of the operating profit for the handset industry as a whole.
Starbucks (NYSE:SBUX) will invest $100 million to acquire San Francisco bakery chain Bay Bread from the Next World Group. The deal is expected to be closed during SBUX’s fiscal fourth quarter. Through the purchase of Bay Bread, Starbuck will roll out new products at its stores based on the Bay Bread’s La Boulange recipes. Starbucks also plans to expand La Boulange from 19 cafes into a national chain. The bakery will continue to supply its existing restaurant, hotel and specialty grocery store customers. In the short run, however, the deal may reduce second half EPS by around 2 cents for fiscal 2012. I have always felt that food quality is Starbuck’s greatest weakness, and this acquisition might be able to fix that.
Baidu (NASDAQ:BIDU) plans to generate revenue from non-search services by doing online marketing through its popular Baidu Tieba online forum. Xiang Hailong, Baidu’s Vice President of Commercial Operations, said the company may make money by allowing its clients to market products and services on Baidu Tieba (literally “Baidu Paste Bar”–a reference to the way the forums are created by users online). The communication platform, which is Baidu’s biggest, has more than 2 million “bars,” or opinion forums.
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