Perhaps I was a bit hasty a couple of weeks ago in declaring that a new IPO plan by online real-estate company E-House for its Leju unit looked like the recycling of an old listing that flopped and was eventually privatized. Since that initial announcement, E-House has followed with a couple of new plans for Leju, both involving collaboration with Tencent, China's biggest Internet company. In the latest of those, E-House has just announced that Tencent will become a strategic investor in Leju, paying $180 million for 15% of the unit.

From this latest development, it's clear that E-House is trying to sell Leju as Tencent's new real estate play, an assessment that looks reasonable enough. Tencent has been rapidly diversifying outside its core social networking and online-games businesses, typically by buying this kind of major strategic stake in an outside specialist. In a similar move, Tencent two weeks ago purchased 15% of JD.com, China's second largest e-commerce firm. That pair now plan to combine their e-commerce operations to create a new major player with about a quarter of the market.

Leju first splashed into the headlines earlier this month when E-House announced it would spin off the portal with an aim to list it separately with a New York IPO.  I commented at the time that the plan had a strong element of deja vu, since Leju was previously listed when it was part of CRIC, a real estate joint venture between E-House and leading Web portal Sina . That partnership ultimately dissolved due to disappointing performance, and CRIC was ultimately delisted and E-House bought out Sina from the joint venture.

Prudent change of partners
The new IPO plan initially looked like E-House's way of trying again with Leju, even though the listing was an underperformer the first time. But this substitution of Tencent for Sina as the venture's partner certainly adds an interesting and potentially exciting new element to the equation. According to the latest announcement, Tencent will also purchase shares in Leju's upcoming IPO to maintain its 15% stake in the company, demonstrating its longer term commitment to the partnership.

Sina has a reputation as a strong portal operator and is one of the most respected third-party news providers in China. But the company also has a reputation for its inability to develop new businesses, and is highly dependent on advertising from its core portal operations for much of its money. By comparison, Tencent has a much stronger reputation for developing new businesses, and has used its original strength in social networking to become China's biggest game operator.

Tencent is also moving rapidly to develop e-commerce and other paid services on its highly popular WeChat mobile instant-messaging platform. That's clearly an area where E-House could benefit, since many people who use WeChat might also consider using the platform for Leju's real-estate services. In their new tie-up announcement, Tencent and E-House actually mention collaboration over WeChat, known as Weixin in Chinese, which boasts more than 500 million registered users.

All this brings us back to the bigger question of what this new tie-up really means for E-House. The company itself is a perennial runner-up in China's real estate services market, behind industry leader SouFun. But that said, it is still the second largest player and could get an important competitive advantage over SouFun with this new tie-up. At the end of the day, the Leju IPO will probably be the biggest beneficiary of this new equity tie-up, and the listing could perform reasonably well if it makes it to market by the middle of the year.

Retailers are indeed having a tough time trying to overcome various obstacles keeping customers away from its stores. In addition to lower consumer spending, severe weather conditions have been a cause of concern. Also, the growing importance of online sales has marred foot traffic in malls and stand-alone stores. People now find it easier to buy items online and get them delivered to their doorstep rather than take the pains of going out.

However, department store retailer Macy's  managed to overcome all of these hurdles and shine brightly when it posted its fourth-quarter results. Its earnings beat investors' expectations, sending its stock price higher.

The details of the quarter
Weak sales in January and one less week this year resulted in a revenue drop of 1.6% compared to last year, clocking in at $9.2 billion. However, the retailer managed to post same-store sales growth of 1.4% since sales during the holiday season.

Macy's promoted its products heavily during the holiday seasons and provided heavy discounts in order to attract more customers. Despite providing steep discounts the retailer managed to keep its gross margin strong. Its margin remained at 40.6% -- par with the year-ago quarter.

Adjusted earnings for the quarter stood at $2.31 per share, much higher than analysts' estimates of $2.17 per share and last year's EPS of $2.05. As indicated by fellow Fool Adam Levine-Weinberg, even if we get rid of the gain on sale of assets, which boosted the bottom line by $0.10 per share, earnings stood at $2.21 per share. Hence, the company did a commendable job of managing its expenses, resulting in earnings growth.

Snapshot of the past
If we look at Macy's stock price performance as against its peers, Kohl's and J.C. Penney , Macy's comes out a leader, as reflected in the chart below:

M data by YCharts.

Macy's has provided the highest return of 39.3% in the last one year, whereas Kohl's is at 12.8%. On the other hand, J.C. Penney's stock price has decreased 44% during the same period.

Macy's has been performing well, with a focus on driving its numbers higher, especially e-commerce numbers. The company has been making efforts to strengthen and expand its online operations. On the other hand, J.C. Penney's e-commerce efforts were not up to the mark, resulting in an online sales decline of 33% in 2012 compared to $1.52 billion in 2011. In fact, revenue from online operations now accounts for 8% of total revenue for J.C. Penney as against the revenue composition of 15% a decade ago.

Nonetheless, the company is trying to revive its e-commerce business by bringing in more merchandise that was removed from online stores. Also, Penney plans to rebuild its customer loyalty program, which should be beneficial. These efforts have started paying off, as evident from the 26% increase in e-commerce sales during Penney's holiday quarter. However, these efforts, along with higher discounts and promotions, hurt the retailer's margins as well as its bottom line in the recently ended quarter. 

Kohl's is also having a tough time with a decline in same store sales from the last few quarters. The metric declined 2% in the fourth quarter and 1.6% in the third quarter. However, the company has been taking initiatives to grow its sales, both online and in-store. It plans to follow Macy's Omni-channel strategy, wherein it will be capable of fulfilling online orders through its stores. All of its stores will have all of the merchandise, so online orders can be picked up by customers. Also, it plans to revamp its mobile app after it's done with the IT upgrades on its website. 

Road ahead
Although both peers are trying to replicate Macy's strategy, they are unable to outperform Macy's. While it has been strengthening its e-commerce business, it has also remodeled its stores in order to make them more attractive. The benefits of these efforts are yet to be seen.

Moreover, the company has been increasingly promoting its products, which have lured customers. Macy's also witnessed sales growth in February, especially on Valentine's Day, which shows customers are getting back to stores after severe weather conditions.

In fact, the company expects demand to pick up as the weather returns to normal and spring sets in. Macy's spring collection, which will be launched in the months to come, will give customers more reason to visit its stores. Hence, winter woes were short-lived and the retailer will soon return to normal condition in the coming months. Also, the company stuck to its comp sales growth forecast of 2.5% to 3% despite undergoing a difficult winter  season.

Bottom line
In addition to the above mentioned factors, the retailer's restructuring plan should save overhead costs of around $100 million. Therefore, its bottom line should benefit further. The new spring collection, increased marketing and a growing e-commerce business are reasons enough to invest in this company. Macy's is definitely worth a look.

Dividend stocks outperform non-dividend-paying stocks over the long run. It happens in good markets and bad, and the benefit of dividends can be quite striking -- dividend payments have made up about 40% of the market's average annual return from 1936 to the present day.

But few of us can invest in every single dividend-paying stock on the market, and even if we could, we're likely to find better gains by being selective. Today, the world's two largest hard disk drive manufacturers (forming an effective duopoly), will square off in a head-to-head battle to determine which offers a better dividend for your portfolio.

Tale of the tape
Founded in 1979, Seagate Technology PLC , originally known as Shugart Technology, is the world's largest maker of hard disk drives (HDDs) and data storage solutions. Seagate developed the first 5.25-inch HDD in 1980 and has remained a dominant supplier to the PC industry ever since. Headquartered in Cupertino, Calif., Seagate currently employs more than 50,000 people working round the clock to produce HDDs for PC manufacturers and independent distributors around the world. The company generates 70% of its revenues from PC makers, and around three-quarters of its sales are made outside the U.S. due to the high concentration of PC manufacturing capacity in Southeast Asia.

Established in 1970, Western Digital Corp. , formerly known as General Digital, is the second-largest hard disk drive manufacturer in the world. The company nearly vanished in the 1970s before striking gold with its early microchip products, a success that allowed it to expand into data storage by providing controller components for disk drives. Western Digital has aggressively expanded its R&D and manufacturing capabilities, products portfolio, and geographical footprints with the acquisition of Hitachi Global Storage Technologies, and today, the company generates roughly 60% of its revenue from PC manufacturers and more than half of its sales from the Asia-Pacific region.

Source: Morningstar and YCharts.
* Free cash flow margin is free cash flow divided by revenue for the trailing 12 months.

Round 1: Endurance (dividend-paying streak)
According to Dividata, Seagate began paying quarterly shareholder distributions in 2003, but it ceased payments from mid-2009 to early 2011, which gives it a mere three-year dividend-paying streak. That's still an easy win for Seagate over Western Digital, which only began paying quarterly dividends in mid-2012.

Winner: Seagate, 1-0.

Round 2: Stability (dividend-raising streak)
Seagate's halted dividend payments resumed with a vengeance in 2011, and the company has boosted payouts each year, which is still enough to snatch away the stability crown from Western Digital, which first raised payouts over its initial rate late last year.

Winner: Seagate, 2-0.

Round 3: Power (dividend yield)
Some dividends are enticing, but others are merely tokens that barely affect an investor's decision. Have our two companies sustained strong yields over time? Let's take a look:

STX Dividend Yield (TTM) data by YCharts.

Winner: Seagate, 3-0.

Round 4: Strength (recent dividend growth)
A stock's yield can stay high without much effort if its share price doesn't budge, so let's take a look at the growth in payouts over the past five years.

STX Dividend data by YCharts.

Winner: Seagate, 4-0.

Round 5: Flexibility (free cash flow payout ratio)
A company that pays out too much of its free cash flow in dividends could be at risk of a cutback, particularly if business weakens. We want to see sustainable payouts, so lower is better:

STX Cash Dividend Payout Ratio (TTM) data by YCharts.

Winner: Western Digital, 1-4.

Bonus round: Opportunities and threats
Seagate may have won the best-of-five on the basis of its history, but investors should never base their decisions on past performance alone. Tomorrow might bring a far different business environment, so it's important to also examine each company's potential, whether it happens to be nearly boundless or constrained too tightly for growth.

Seagate opportunities

• Seagate gives back roughly 70% of its operating cash flow in dividends and share buybacks.
• A shift toward 3D NAND in the flash memory industry could add another growth avenue to Seagate's product lines.
• Seagate's products can remain relevant against with the growth of cloud computing and "big data."
• The 3D NAND market is poised to grow at an annualized rate of 181% until 2018.

Western Digital opportunities

• Western Digital has increased its market share despite weakness in the PC market.
• Western's gross margins increased 140 basis points year over year in its latest quarter.
• IDC recently reported a 2.4% year-over-year increase in sales of external disk storage systems.

Seagate threats

• Seagate's profit margins have plummeted due to weakness in the PC market.
• Seagate could face tough competition from solid-state drives.
• Samsung began mass-producing its own 3D NAND modules, which is likely to push prices down.

Western Digital threats

• Seagate's acquisition of hard-drive testing specialist Xyratex turned Western Digital into one of its major customers.
• Western Digital has no plans to produce 3D NAND despite a booming market.

One dividend to rule them all
In this writer's humble opinion, it seems that Seagate has a better shot at long-term outperformance, thanks to a long-term product strategy that includes cloud and big-data uses as well as the explosively growing 3D NAND flash memory market. However, Western Digital's ability to grow its market share is a worrisome indicator for Seagate shareholders, who should keep a close eye on Western Digital's product portfolio and sales strategies. The beleaguered PC market will continue to trouble both manufacturers in the near future, so the ultimate victor is bound to be the one that best transitions toward a post-PC world. You might disagree, and if so, you're encouraged to share your viewpoint in the comments below. No dividend is completely perfect, but some are bound to produce better results than others. Keep your eyes open -- you never know where you might find the next great dividend stock!

Despite the economy and weather, Chipotle Mexican Grill , Panera Bread , and Einstein Noah Restaurant Group make it look easy to rake in profits in the fast-casual space. People enjoy having fresh sandwiches made in front of them, in increasing numbers. As such, the growing popularity of this newer style of dining is evidenced by the failure of a more traditional chain.

Source: Quiznos.

The latest casualty
On March 15, Subway competitor Quiznos filed for Chapter 11 bankruptcy protection. The company listed more than $500 million in debt that it hopes to slash down to $100 million during the restructuring. This is the second time in recent history that Quiznos found itself in trouble and looked for a lifeline. Back in 2012 it negotiated a deal that eliminated $300 million in debt. Perhaps if the company was able to just simply make and sell more sandwiches profitably, none of this would be necessary.

As it is, the chain once had more than 5,000 locations and is down to just around 2,100. Subway is, of course, a major competitor with 40,000 locations, so there is certainly still a strong market for sub-style sandwiches. But the competition is fiercer than ever, as consumers have many more choices.

The Chipotle way
The fast-casual model tends to be consistently structured no matter what is on the menu. You start out at one end, cafeteria style, and slide past the ingredients and verbally give your preferences until your freshly made sandwich is complete. Chipotle Mexican Grill uses this concept but with burritos, salads, tacos, etc. It's largely the same thing, only instead of choosing a type of bread, you're choosing a type of shell or a bowl and loading it with a choice of ingredients.

And it's working. Hungry consumers are flocking to Chipotle in record numbers, inevitably pulling patrons away from other chains such as Quiznos. In short, Chipotle seems to be eating Quiznos' lunch. Last quarter, revenue jumped 21%, same-store sales soared 9.3%, and net income leaped 30%. Chipotle ended the quarter with 1,595 locations and plans to open between 180 and 195 more this year alone. Based on the trend, it may not be long before Chipotle surpasses Quiznos in terms of number of locations.

Source: Panera Bread.

The Panera way
Panera Bread too is gaining on Quiznos in terms of number of locations. It ended last quarter with 1,777 restaurants. The company plans to add 115 to 125 new locations this year, with each new one threatening to take more and more market share away from Quiznos. Last year, Panera Bread saw a 12% increase in revenue with systemwide same-store sales popping 2.3%.

While Quiznos is busy with a bankruptcy filing, Panera Bread is busy making investments for continued growth. CEO Ron Shaich stated, "While we expect these investments will result in modest earnings growth in the near term, we believe they will lead to expanded transactions, comparable store sales, and ultimately earnings growth, well into the future."

The bagel way
Einstein Noah Restaurant Group is yet another competitor fighting for the afternoon crowd. Last quarter it saw revenue pop 3.2% and same-store sales make a tiny blip up of 0.1%, which was still well ahead of industry traffic trends.

While Einstein Noah Restaurant Group currently has only 852 locations, that number is about to rise. Last year the bagel-sandwich chain grew its locations by 7.7%, and this year it's slated to tack on another 8.8% to 10% growth. Einstein is finding that, on average, new restaurants have 15% higher sales than existing ones due to the company's improved skills in the area of site selection. Each of these locations that were opened anywhere near a Quiznos would have likely contributed to its bankruptcy.

Foolish final thoughts
Look for Chipotle Mexican Grill, Panera Bread, and Einstein Noah to continue to grow as more competitors fall. Perhaps those guys may even take over former Quiznos locations. All three have enjoyed years of fantastic growth.

Fools should take a closer look at all three as growth stories, especially if the stocks pull back enough. Chipotle and Panera trade with forward P/E ratios in the 30s and 20s, respectively, based on analyst estimates, and may be a bit pricey for now. Einstein Noah trades at a more reasonable-looking P/E of 15 despite having equal or more ambitious growth plans on a percentage basis.

When Intel issued its full-year 2014 revenue and operating profit guidance, investors weren't all too pleased. To provide some perspective, Intel generated $12.9 billion of net income during 2012, $11 billion in 2012, and a mere $9.6 billion during 2013. While 2014 hasn't been written yet, investors are bracing for yet another year well below both 2011 and 2012 levels. The question now is whether Intel can deliver an upside surprise to put a bit of a spark back into its share price.

What is Wall Street expecting?
The first thing to keep in mind is what the analysts covering the stock expect for the year. Now, for a company like Intel, which actually issues full-year guidance, the analyst estimate spread is usually pretty tight (i.e., within the range that Intel gave). This means "consensus" usually works out to something very close to the midpoint of management's guidance.

For the full year, consensus is $53.14 billion in sales (+0.80% year over year) and earnings per share of $1.85 (-2.11% year over year). This suggests that, on the whole, investors are expecting the company to perform in line with management's expectations. This leaves Intel valued at about 13.5 times the current year's earnings and about 12.5 times the analyst consensus for 2015 -- so the stock is actually pretty cheap.

Could Intel beat?
Management's expectation (and therefore consensus) is based on the following critical assumptions:

• PC Client Group sees revenue down "mid-single digits" (this usually means 5%-7%), operating profit flat to 2013.
• Datacenter group revenues up 10%-15%, with the bottom line growing faster than the top line.
• Other IA revenues roughly flat with operating profit down (due to increased tablet contra-revenue and a down modem business).

So, given that the PC Client Group made up about $33 billion of the company's $52.7 billion revenue base achieved in 2013, this is very clearly the biggest "lever" that could influence an earnings beat. The next largest one, the datacenter group, was worth $11.24 billion during 2013, with growth estimates in the 10%-15% range. Following enterprise weakness in Q4, CFO Stacy Smith seemed to be fairly pessimistic on the call, setting investor expectations for the low end of that range.

If you do the math on the top line and assume a 6% PC decline year over year for Intel (so from $33 billion to about $31 billion), Intel will be making up the difference of $2 billion in aggregate from its other businesses to get to flat. If the datacenter group grows 12%, this would make up $1.35 billion of the $2 billion difference. Intel indicted that directionally, software and services and NAND would be up during 2014, suggesting that these make up the remainder of that roughly $650 million deficit.

What happens if PCs are only down 3%?
The current forecast from Intel and the various third parties is that the PC market will be down 6%. However, let's assume Intel is able to:

• Drive a richer mix (particularly in desktop and high-end notebook).
• Take share from AMD , particularly in the low end (Intel's Bay Trail-M will get the ball rolling; future generations could really drive the point home).
• Since Intel puts full "Core" processors inside of higher-end convertibles/laptops (and since the revenues are booked under the PC Client Group), Haswell/Broadwell based tablets could also drive upside.

Let's assume that all of this rolled together leads to a revenue picture in which PC Client Group is down only 3% year over year. Further, let's do a little math to figure out the impact this would have on Intel's operating profit:

Assuming these results, Intel could actually come in over $1 billion ahead on the top line against consensus and -- assuming a tax rate of 27% -- beat current EPS estimates by about $0.07 and register mild year-over-year growth. Of course, assuming such a revenue beat wouldn't be a one-time thing (i.e., the PC refresh cycle is near its peak as Windows XP end-of-life is in full-swing) and that the PC market could eventually return to growth, Intel's shares could be repriced to command a much richer multiple than it does today.

Foolish bottom line
Investing based on hope is foolish (not Foolish), but given that Q4 already gave investors a positive PC data-point, and that PC sales in developed markets appear to have stabilized, it may not be out of the realm of possibility for Intel to beat the current PC market consensus and deliver meaningfully better results on the top line than is currently expected. When the Q1 results are in, on April 15, we'll be able to get a much better grip on the current Intel picture. 

Walk into a Starbucks and no one minds sporting the same smartphone. But that's not the case for every consumer market. Imagine this scenario: A week before your new car is delivered your neighbor buys the same vehicle with the same specs -- ouch. Even worse, imagine one-third of the people in Starbucks wearing the exact same wristwatch. This dilemma poses a question: What is Apple's solution for meeting the demands of fashion for its alleged iWatch?

Apple's product design engineers, led by the renowned Jony Ive, have undoubtedly considered the implications of this dilemma. But since the wearables market is still in such an early stage, it is worth wondering whether Apple will be able to fully and accurately encapsulate the effects of a long history of fashion and unique designs for the wrist on smartwatch purchasing choices.

An advantage for Android?
Google's open software development kit for its Android Wear platform, which allows other manufacturers to adapt the operating system for their design, is one way to address consumers' demand for unique fashion. Could the open approach be the superior method in a fashion-stricken market?

Android Wear device from Google's Android Wear developer preview video.

Google director of engineering for Android, David Singleton, acknowledged the company's effort to solve this problem in a video describing Android Wear:

To bring this vision to life, we're working with consumer electronics manufacturers, chipmakers, and fashion brands, who are committed to fostering an ecosystem of watches in a variety of styles, shapes, and sizes.

Historically, Apple has kept its product line small, with limited designs. If Apple continues down this road, will consumers change the way they think about distinctive fashion on their wrist? Or does Apple have a unique solution?

PCs, MP3 players, smartphones, or tablets were never known for personalized fashion before Apple entered the categories. Even today, consumers across the globe seem completely unmoved when strangers next to them are using the same gadget.

Could this be Apple's plan?
One designer has come up with an interesting concept that Apple could implement to address fashion while only manufacturing one form factor for the iWatch. Argentine design student Tomas Moyano imagines a round device with grooves that allow for unique bands or other accessories like clips or necklaces. Using induction charging technology and wireless syncing, Apple could use the grooves without blocking any ports.

There's nothing entirely innovative about the underlying approach behind Moyano's design. In fact, a device called the Shine from Misfit Wearables already boasts a similar approach to solving demands for unique style. Nevertheless, the tactic does effectively address styling issues beyond the circular iWatch display.

But will differing bands be enough for consumers? Given Jony Ive's track record, investors shouldn't fret over Apple's method to solve this dilemma. Chances are, the company has an eloquent and innovative solution. But even if Apple's answer proves to be a success, will Android's likely broader range of styling solutions make its devices more competitive with the Apple in wearables than it is in smartphones?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Nu Skin Enterprises were looking impressive today, gaining as much as 30% and finishing up 18% after receiving a fine in China that was not nearly as bad as feared.

So what: Back in January, Nu Skin shares lost nearly 40% in two days when an official Chinese government newspaper called the company a "pyramid scheme" and regulatory agencies announced an investigation against the beauty-products seller. Today, Nu Skin revealed that it was fined just $540,000 for selling products through individual sellers that were meant for retail, and for product claims that lacked sufficient supporting evidence. The regulatory agencies also asked Nu Skin to "enhance the education and supervision of sales representatives."

Now what: Investors had feared much greater consequences from the Chinese investigation as Nu Skin had suspended business promotional meetings and new sales-rep hiring in the wake of the investigation. Considering that the concerns in China seem essentially gone after the fine, it's surprising to see shares still trading close to 40% lower than they were just before the investigation. Nu Skin said it would look to the Chinese government for "direction on resuming normal business activities," and that it believed in "the potential of China's large and growing market." China has been a crucial growth market for Nu Skin as sales grew 248% there in its most recent quarter, making up nearly half of total sales. With an opportunity like that, shares look cheap at a P/E of just 15.

Once regarded as a solid blue-chip company, Eastman Kodak began to struggle financially in the late 1990s due to a continuous decline in sales of photographic film. Kodak's management failed to identify digital photography as a disruptive technology, and the company eventually ended up filing for Chapter 11 bankruptcy protection in January 2012, and had to sell its photographic film, patents, commercial scanners and even kiosk operations in order to survive.

In September 2013, the company emerged from bankruptcy after exiting several failed businesses. Now, the company has a new business plan, which focuses on commercial imaging and printing, a space where competitors Hewlett-Packard and Fujifilm Holdings are quite strong. Has Kodak learned its lesson? How exactly does the company plan to turn losses into profits, and become a leader in commercial imaging?

Source: Eastman Kodak Investor Relations

A narrow focus
The new Kodak plans to focus on commercial imaging and graphics, together with providing digital printing solutions to businesses. In the past few quarters, the company exited, divested, or harvested most of its non-core businesses and assets. This allowed the company to eliminate various legacy liabilities, including losses related to Kodak Gallery, which was once the company's consumer online digital photography website and served more than 60 million users at its peak. 

Competitors
The commercial imaging space is dominated by Hewlett-Packard, which owns a wide portfolio of industrial printing solutions. Hewlett-Packard's Indigo Division has several years of experience developing and marketing digital, offset printing presses, consumables and workflow solutions.

Fujifilm Holdings is another important name in the commercial printing space. The company is a leading manufacturer of computer-to-plate systems, which allows printing companies to make printing plates directly from computer data, skipping the film stage. Fujifilm manufacturers offset printing plates in China, Japan, the United States, and the Netherlands.

Innovation and branding
To compete against these giants, Kodak will have to put innovation first. As Forbes contributor John Kotter notes, the company must encourage and welcome pie-in-the-sky ideas.

Note that most of Kodak's patent portfolio has been sold off. However, the company still retains great technology and engineers. For example, a team of more than 100 engineers have worked for more than five years to create Kodak Stream Inkjet Technology, which delivers offset-class output with the ability to perform high-speed, variable-data printing at low cost. More important, Kodak is still a highly recognizable brand. 

Early results
It's too early to know if Kodak's new business plan will succeed. The company ended 2013 still in the red. Kodak's overall sales for 2013 came in at $2.35 billion. Revenue for the most recent quarter came in at $607 million, down from $739 million a year earlier. Sales, which fell 12% at the company's graphics, entertainment, and commercial films business, were not enough to prevent a net loss of $63 million.

On the bright side, net loss is down from $402 million a year ago. 2014 will certainly be a key year for the company, and investors should monitor both revenue and profitability figures in detail. The company is not forecasting a major turnaround, and it forecasts sales volume for 2014 in the $2.1 billion-$2.3 billion range.

Final Foolish takeaway
Kodak, once a powerful player in the imaging and photography industry, is trying to recover by narrowing its business focus. The new Kodak plans to gradually become a leader in the commercial imaging industry, a space currently dominated by Hewlett-Packard and Fujifilm. Although the company has made some progress in reducing its net loss per quarter, it's too early to know if Kodak's new business plan will succeed.

Although stocks opened higher this morning, but that didn't last beyond the first half-hour of the session and the benchmark S&P 500 ended Monday's session down a half-percent. The narrower Dow Jones Industrial Average fell just 0.2%, but it was the technology-heavy Nasdaq Composite Index which had the roughest time of it, losing 1.2%. Some high-profile growth names fared even worse, as Facebook , Tesla Motors and Netflix lost 4.7%, 3.8% and 6.7%, respectively. The three are some of the market's best-performing shares over the past 12 months -- the vanguard of a rally that has certain segments of the technology sector looking overheated ... and rather precariously perched. Does today's action forebode a more serious correction in these shares?

Ukraine as an excuse
Pity the financial journalist who is tasked with finding an explanation for the market's movements on a daily (or hourly!) basis. "Tech leads Wall Street lower as Ukraine casts a shadow," reads the Reuters headline this afternoon, with the article explaining that "concerns that the crisis in Ukraine could escalate gave investors a reason to drop some of the market's biggest trading favorites."

Perhaps "investors" did sell growth names in reaction to today's news out of Crimea; but if they did, that action has little or nothing to do with a fundamental case for these businesses. Ask yourself: What is the business exposure of Facebook or Tesla Motors to Ukraine or Russia?

For traders and momentum chasers, there is a better case for selling on raised global macroeconomic and political risks -- if the markets experience a broad reversal in risk appetite (remember "risk on/risk off"?), high-flying shares are the most exposed. However, it's not clear that this is what happened today; after all, the VIX , the most widely followed gauge of fear, hardly budged at all, gaining just 0.6% to close at 15.09 -- significantly below its long-term historical average.

Watch out for the sharp end of the spear!
Instead, it looks like the reversal in risk appetite was concentrated at the tip of the spear -- technology shares that have had huge run-ups with resulting valuations that look disconnected from their fundamentals. At 50 times the next 12 months' earnings per share, Facebook is the most reasonably priced (on traditional metrics) of the three stocks I mentioned in the opening paragraph, but it also sports the highest market capitalization -- 50 times forward earnings is a heck of a price tag for a business that's already worth more than $160 billion. As for Netflix and Tesla Motors, even their CEOs have expressed concern that their shares are overpriced.

Is biotech an early warning?
Another high-flying sector, biotechnology, appears to be experiencing the same phenomenon, only more so. The Nasdaq biotechnology index, which rose by two-thirds last year, lost 3% today -- its fourth consecutive daily loss. Today's loss puts the index's cumulative decline from its Feb. 25 peak at 12.4%, which means it's already in correction territory. While short-term predictions are a mug's game, it's clear the same thing could easily happen to other technology shares that have put up outsized gains over the past year (or less -- some of the names haven't even been public for 12 months).

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Varonis Systems Inc. jumped 20% Tuesday after no less than five analyst firms simultaneously assumed coverage on the stock.

So what: Three of those firms assigned a "buy" equivalent to Varonis shares, including per share price targets of $45 from Jefferies, $48 from Needham, and $50 from RBC Capital. All represent fair premiums not only from Varonis' $22 per share IPO last month, but also over today's closing price at $43.78 per share.

Morgan Stanley and Barclays also chimed in today, with both rating the stock the equivalent of a "hold." Barclays opted to set a price target at $42 per share.

Now what: The timing of the calls isn't coincidence, but rather the result of today marking the end of a mandatory 25-day "quiet period" imposed by the SEC following Varonis' IPO. The expiration means its underwriters are now free to release their respective research reports on the company. It's also worth noting even after today's pop, shares of Varonis are still trading roughly 23% below their post-IPO high set three weeks ago.

However, while I agree Varonis could enjoy potentially mouthwatering top line growth thanks to its market leading solution to help companies map human-generated data -- think spreadsheets, word processing documents, emails, text messages and the like -- I'm in no particular hurry to dive into shares of this yet-to-be-profitable company just yet. Instead, I think investors would be wise to let the dust settle and put Varonis on their watchlists to keep tabs on its progress over the next few quarters.

Source: Walgreen.

Walgreen was rising by nearly 3.3% on Tuesday after reporting solid earnings for the second quarter of fiscal 2014. The drugstore leader operates a solid business in a defensive industry, and the stock is fairly valued in comparison with competitors such as CVS Caremark and Rite Aid . Is Walgreen a buy, hold, or sell after reporting earnings?

Healthy performance
Sales came in at $19.6 billion during the quarter, a 5.1% increase versus the same period in the prior year and marginally above analysts' estimations of $19.5 billion. Total comparable-store sales increased by 4.3% during the quarter, and front-end comparable store sales grew 2%, while customer traffic in comparable stores decreased by 1.4% during the period, and basket size increased by 3.4% versus the prior year.

Prescription sales accounted for a big 62.2% of sales during the quarter, increasing by 7% versus the prior year on the back of a 5.8% growth rate in prescription sales at comparable stores. According to management, Walgreen increased its retail prescription market share by 20 basis points to 19%, based on data from IMS Health.

Revenues were quite strong on several fronts, but earnings per share came in below expectations at $0.91, versus an average Wall Street analyst estimate of $0.93.

Margins during the quarter were negatively affected by multiple factors, such as slower generic-drug introduction, a less severe flu season, a notoriously harsh winter with negative implications on customer traffic, and aggressive promotions hurting margins on front-end sales.

Solid fundamentals
With almost 8,700 locations in all 50 states, Walgreen is a leading player in the pharmacy industry, and the company's wide geographical presence provides a valuable competitive strength. Opportunities for differentiation are minimal in the industry, so consumers tend to go to the drugstore offering the most convenient location, and Walgreen is well positioned from that point of view.

The company's business is supported by secular tailwinds, as demand is expected to grow strongly over the coming years because of factors like an aging population, broadening health-care insurance coverage, and technical advancements in the health-care industry.

Walgreen plans to increase its store base by between 55 and 75 new locations in fiscal 2014, and store base expansion will likely remain at moderate levels in the future. On the other hand, a maturing store base usually generates growing profit margins because of enhanced efficiencies over time.

Competitive landscape 
With more than 7,600 stores, CVS is Walgreen's main competitor, and the company has interesting scale advantages by combining its pharmacy retail operations with its position as one of the biggest pharmacy benefit managers in the United States.

CVS reported a total increase of 4.6% in sales during the fourth quarter of 2013, with the pharmacy services segment growing by 5.2% and retail pharmacy operations expanding by 5.6% during the quarter. Retail pharmacy same-store sales increased by 4% during the period, so Walgreen and CVS are generating similar financial performance lately.

With less than 4,600 stores, Rite Aid is materially smaller than Walgreen and CVS, but management seems to be taking the company in the right direction, as Rite Aid has been leading an impressive turnaround over the past several quarters by improving profitability and stabilizing sales trends.

On the other hand, Rite Aid is still underperforming its bigger competitors. Same-store sales increased by 1.5% during the five weeks ended on March 1, and pharmacy same-store sales increased by 3.1%, but front-end same-store sales declined by 1.8% during the period.

Fair valuation
When comparing valuation ratios for Walgreen versus CVS and Rite Aid, the company looks fairly valued. Walgreen is a bit more expensive than CVS in terms of P/E and forward P/E ratios, but the dividend yield is more attractive at 1.9% for Walgreen, versus 1.5% for CVS.

Data source: FinViz.

Rite Aid trades at a premium P/E versus both Walgreen and CVS, which is probably a reflection that investors expect the company to continue on the road to recovery over the coming years, and the company pays no dividends.

Speaking of dividends, that's one of the main advantages of a position in Walgreen. The company has paid recurrent dividends for 81 consecutive years, and it has raised those distributions for the past 38 years in a row, including a big increase of 14.5% announced last July.

With a safe payout ratio in the neighborhood of 36% of earnings estimates for fiscal 2014 and a sound business generating reliable cash flows, investors have valid reasons to expect growing dividends from Walgreen in 2014 and beyond.

Bottom line
Walgreen is a market leader in a mature industry, so growth rates will probably remain at moderate levels in the coming years. The business is supported by strong secular tailwinds, and the stock trades at a reasonable valuation. If you are looking for a reliable company distributing consistently growing dividends over the years, then Walgreen may be just what the doctor ordered.

Tuesday started out looking a lot like Monday did, with early gains giving way to greater nervousness. Yet unlike yesterday, the stock market managed to recapture those early gains and post a solid advance for the session, bolstered by positive news on the consumer front. Yet even the Dow's nearly 100-point rise was modest compared to the advances that FuelCell Energy , Atlantic Power , and Sonic managed to give their shareholders today.

FuelCell technology used at a Dominion Resources plant in Bridgeport, Conn. Source: Dominion Resources.

FuelCell Energy jumped 20%, yet in some ways, that was actually disappointing to some shareholders in light of the action elsewhere in the space. After having whipsawed in both directions lately, the CEO of Plug Power said that the fuel-cell maker had gotten an order from a global automaker. Despite CEO Andy Marsh's failure to elaborate on the potential deal, traders chose to take the news as a sign of huge optimism, sending Plug shares up almost 50% on the day. That optimism spread throughout the sector, as Ballard Power Systems also posted a sharp gain of 32% on Plug's news. At this point, speculative fervor has taken over the fuel-cell industry, making it difficult for long-term investors to get a solid read on the sector. When even hints of positive news can send stocks soaring, the risk level in a particular stock is almost always higher than ordinary investors should take without being fully prepared to suffer potentially catastrophic losses.

Atlantic Power gained almost 10% after the utility company said that it would boost the size of its tender offer to repurchase some of its outstanding debt. The company said that in addition to its original $150 million offer, private negotiations had led to another $140 million in repurchases of Atlantic Power's 9% senior notes maturing in 2018. The company has managed to sustain a dividend that currently yields about 12% at present share prices, but debt remains a big issue for the company. As a result, though, refinancing efforts could allow Atlantic Power to take maximum advantage of current low rates and put itself in the best position to profit in the future.

Sonic climbed 12% after the restaurant chain reported solid earnings last night. Adjusted earnings beat expectations by a penny per share, overcoming sluggish revenue growth that might well have come from weather-related issues for the drive-in-themed chain. Even with weather considerations, same-store sales rose 1.4%. Moreover, the company believes that the second half of its fiscal year could look even brighter, as its novel approach to the business draws customers. Interestingly, although several analysts made positive comments about Sonic's results, they nevertheless are unsure about the chance for further share-price appreciation, with some price targets actually below the current price of the stock.

Apple hasn't released a major new product in more than four years. Sure, there have been been plenty of revisions -- new features, faster processors, different screen sizes -- but nothing that fundamentally altered the tech landscape.

That was supposed to change this year. CEO Tim Cook has repeatedly promised new product categories in 2014. According to sell-side analysts, one of those products could be a revolutionary new Apple TV. If it takes the living room seriously in 2014, Apple could pressure existing players including Sony and even Comcast .

But investors may need to temper their expectations. Recent reports have called Apple's television plans into question, suggesting that 2014 might not be as big for TV as investors had hoped.

Analysts have big expectations
For years, analysts have called for an Apple-made TV -- not just a revision to its current miniature set-top box, but a full-fledged, integrated television set. As imagined, this device would serve up paid-TV content in an entirely new way, perhaps including a revolutionary new interface and deep integration with Apple's Web services. This speculation has been fueled by comments from Cook and the late Steve Jobs, who told biographer Walter Isaacson several years ago that he had "cracked" the TV interface problem.

While it seems obvious that Apple is interested in the TV space, nothing definitive has emerged. Still, that hasn't stopped bullish analysts from factoring an Apple TV into their projections. Morgan Stanley argued more than a year ago that a forthcoming, $1,000+ Apple-made TV could boost company earnings per share by $4.50. More recently, Wedge Partners' Brian Blair included the TV in a list of other rumored Apple products that could elevate the stock by as much as 20%.

Apple will have to deal with the cable companies
But a revolutionary TV product in 2014 is starting to look less likely. According to The Wall Street Journal, Apple has only now entered preliminary talks with Comcast, which is soon to become the nation's largest paid-TV provider. Apple is reportedly working on a Web-based TV service, which it wants Comcast to distribute to its subscribers on a preferential basis.

While Comcast, perhaps looking to gain an edge over its satellite rivals, could decide to play ball with Apple, there are many reasons to remain skeptical. As I've previously noted, Comcast has been working to make itself a de facto Apple competitor, adding apps to its set-top boxes and selling movies and TV shows through the Xfinity media store. Even if it agrees to Apple's demands, it could take some time to make the necessary network enhancements.

The TV business is terrible
Meanwhile, Yukari Kane, in her new book Haunted Empire, reported that Steve Jobs had no interest in entering the TV market. According to Kane, Jobs characterized the business as "terrible," noting that TVs are at best a low-margin business, with infrequent sales.

Jobs' observation is undeniably spot-on: just consider what has happened to the Japanese giants that once dominated the TV business. Last year, much to the chagrin of enthusiasts, Panasonic shuttered its plasma TV business. Although Panasonic's models offered unparalleled picture quality, most consumers just weren't keen on shelling out thousands of dollars for the company's high-end sets.

The same is largely true for Sony, whose TV business has basically been unprofitable for most of the last decade, though the company has been a bit more stubborn in its efforts. Earlier this year, Sony put its TV business in a separate subsidiary, making it easier to spin off, sell, or even shutter should the segment continue to struggle.

Growth in the TV industry has come largely at the low end, with companies such as Vizio besting larger rivals like Sony by offering cheap, mostly Chinese-manufactured panels. As a company, Apple isn't known for targeting the low end, calling into question the possible success of an Apple-made TV set.

Expanding the ecosystem
What seems much more likely, at least in 2014, is a vastly improved Apple TV set-top box. Cook has referenced the growth in that part of Apple's business, and though the numbers still pale in comparison to the company's other segments, there's growing demand for smart TV solutions.

9to5Mac reported that the company was testing a new version of the Apple TV operating system, one that would open the device to third-party apps. This software would ship in a new box, but would also be available to existing owners of older models. Paired with a bluetooth controller, the Apple TV could emerge as a low-cost alternative to traditional video game consoles and could help Apple continue expanding its iTunes revenue. That could help Apple lock customers deeper into its ecosystem, particularly as Google and other rivals set their own sights on the living room. But it wouldn't be the sort of revolutionary product many seem to expect

Certainly, an expensive iTV in 2014 is still possible, but based on recent reports, investors should be skeptical.

Amazon's  core focus has always been to grab market share and provide great value to customers at a great price. But, after years of focusing on only top-line revenue growth, the company is now finally leaning toward earnings growth. The recent price hike of Amazon Prime, and the uptick in the minimum threshold for free shipping, represent its desire to finally ramp up operating earnings.

Price hikes
After years of grabbing market share in the e-commerce space, Amazon is now setting its sights on profitability and free cash flow growth. The company's recent pricing actions will go a long way in helping to ramp up earnings per share. 

In late 2013, the company hiked the minimum threshold for free regular shipping from $25 to $35. Recently, Amazon also increased the price of Prime from $79 per year to $99 per year. Since Amazon earns most of its profit by selling in large volume, these recent pricing actions will go a long way in enabling the company to control shipping costs, which have been enormous in the last couple of years. 

As a percentage of revenue, Amazon's shipping costs have been constant over the last two years at 4.7%, and the recent price hike should help the company keep costs reasonably low. With more than 20 million Prime members, the company will be able to earn more than $400 million in incremental revenue from the Prime price increase. 

Additionally, this price increase will enable the company to invest more heavily in Prime Video. Amazon's lead competitor in the online video space, Netflix , has been rapidly adding subscribers and now has more than 44 million users. Netflix has been able to build such a large customer base by investing heavily in high-quality original shows, increasing the moat of its business. Similarly, Amazon should be able to grow its Prime subscriber base by adding more high-quality video content. 

Growth in earnings
For a company with $74 billion in annual sales, Amazon is still growing at a much higher pace relative to its e-commerce peers. In 2013, Amazon's top line grew at 22%, twice as fast as the growth of the overall e-commerce market. The company is focused on growing its higher-margin businesses, which justifies its pricey stock.

The company's third-party unit sales saw same-store-sales growth of 23%, while eBay's  growth stood at 15% in the last month, according to ChannelAdvisor. eBay's same-store-sales growth was the highest since September 2013, and the company should continue to do well in this category. The marketplaces business is eBay's bread-and-butter, and is increasingly becoming a larger portion of Amazon. Over time, this will aid Amazon in growing its gross margins from its 2013 levels of 27.2%. 

Amazon's operating income margin is still very slim at just 1%, but should expand once the company's higher-margin businesses (including third-party business and Amazon Web Services) make up a larger portion of the revenue pie. As Amazon's heavy investment cycle comes to an end, EPS should see healthy growth in 2014 and beyond. Pricing actions, like the increase in minimum threshold for free shipping and the Prime rate increase, should substantially aid this endeavor.  

Going forward
The company's moat in most of its business categories is gigantic. It is growing at a faster pace relative to other e-commerce players and will continue to gain market share at the expense of numerous brick-and-mortar retailers. The company's long-term growth potential is well in place, as the company is a relatively small player in numerous emerging markets including Brazil, China, and India. Earnings growth will enable the company to reinvest more into its business and gain more market share in the long-run.

Most stocks advanced on Tuesday, reversing the bearish trend of the last several days, a trend driven by worry over high-growth stocks and biotechnology companies. But with consumer confidence hitting six-year highs this month, investors couldn't keep selling, and all three major indexes rose. There were some notable exceptions to today's bullishness: Akamai Technologies , Whole Foods Market , and MasterCard Incorporated all ended toward the bottom of the S&P 500 Index as it tacked on 8 points, or 0.4%, to finish at 1,865. 

Akamai Technologies, which offers cloud-based content management solutions, lost 2.9% on Tuesday. The company teamed up with Telefonica today to form a global business alliance aimed at offering telecom solutions and content delivery to enterprises. Today's drop is somewhat puzzling, and considering Akamai hasn't posted declining revenue or net income in the past four years, it's a "Steady Eddie" in an industry that won't be slowing down anytime soon. 

Whole Foods' wares. Source: Flickr

Shares of Whole Foods Market shed 2.8% Tuesday, although it also lacked a definite catalyst to blame for its decline. But it doesn't take a financial Sherlock Holmes to notice when sales and income growth start to decelerate quickly, and that's precisely what's happening with Whole Foods. Revenue grew at a 33% slower pace in 2013 than it did in 2012; net income growth nearly halved -- going from about 36% a year to about 18% a year -- in the same period. People want to eat healthy, but they also want to be able to afford a table to eat on. As health foods make a resurgence, Whole Foods and its absurd margins will have to suffer as a result.

Finally, MasterCard dropped 2.7% today, as financials were one of only two sectors to finish the day in the red. MasterCard's global presence as a payment option has made it the enormous $90 billion corporate titan it is today. But the company could lose an important part of its international business -- unless significant geopolitical changes come out of the blue -- and soon. Mastercard has been forced by sanctions on Russia to stop processing transactions with some Russian banks, a move that may inspire the country to ban foreign payment systems completely. 

Consumers make up a vital component of the health of the U.S. economy, and today, signs of strength among consumers helped send the stock market higher. The Conference Board's Consumer Confidence Index rose today, indicating the belief among consumers that conditions six months into the future are poised to improve. Yet even though the stock market managed to climb significantly based on that overall positive sentiment, Lions Gate Entertainment , Carnival , and Himax Technologies all sank considerably on Tuesday.

Lions Gate fell almost 7%, more than wiping out all of its gains from Monday in the aftermath of the release of its new Divergent movie. Investors had high hopes for the young-adult movie, with some shareholders expecting it to spawn another highly profitable multi-part franchise. Opening-weekend figures were solid but fell short of blockbuster status, and the real question for Lions Gate going forward is whether the movie-production studio will be able to secure the talent it needs to move forward with future installments of the franchise while keeping costs down enough to clear a strong profit for the overall series.

Carnival sank 5% as the cruise-ship operator warned that it might not be able to make a profit for the quarter. Ordinarily, the winter season is a huge one for Carnival and its cruise peers, but a bad reputation from previous incidents has forced the company to offer substantial discounts to would-be customers in order to entice them onto Carnival ships. With rivals adding to the number of total cruise ships available, it takes even more aggressive promotional activity in order to keep those ships full, and Carnival expects to spend an extra $100 million or more on advertising in 2014 than it did two years ago. By marking down profit estimates for the full year, Carnival is suggesting that the entire industry could be in for a long-term struggle to keep growing.

Source: Google.

Himax plunged 11% on a downgrade from Bank of America, which argued that the flat-panel chip producer faces a tough competitive environment that will weigh on earnings both this year and next. Given the stock's high valuation, counting on Himax to grow into its share price through capacity growth could be risky, especially if the company can't manage to find customers to meet higher supply with greater demand. Moreover, many investors are looking at the company's relationship with Google and its Google Glass product, pointing to Luxottica's deal with Google to help design a more widely distributed Google Glass through its Ray-Ban and Oakley brands. Yet Google Glass' future is uncertain, both in terms of how popular the product might be and when it would be available.

Apple has been spending some big money -- more in the last 12 months than in any year before. Going forward, it has more plans to continue spending big. This spending could be one of the best indicators the Apple doom-and-gloom storyline often sported in media headlines may be overrated.

It begins with a spaceship 
In November 2013, Apple finally received the final approval for its spaceship-looking Apple Campus 2 project from the Cupertino City Council. The planned headquarters is monstrous. The first phase of construction includes the ring-shaped main building, which is about 2.8 million square feet. It will sport an underground parking facility big enough for 2,400 vehicles, a 100,000 square foot fitness center, and a 120,000 square foot auditorium. It will house 13,000 employees.

Apple's main building: 2.8 million square feet with room for 13,000 employees. As a fun aside, Facebook could have built three of these spaceships with the value of the deal for its recently announced acquisition of WhatsApp. Image source: City of Cupertino.

The massive headquarters comes at a steep cost, of course. Businessweek pegged Apple's budget for the project at $5 billion and growing -- far more than Apple has spent on any acquisition.

Today, the construction is officially under way. AppleInsider discovered footage of the demolition of the old Hewlett-Packard campus on YouTube yesterday. The video was posted by an unknown user going by the name of Apple Internal. The demolition itself likely occurred last year when Apple received approval to build the campus. The video has been removed due to an Apple copyright claim.

Image source: Image from YouTube video posted by "Apple Internal" (via AppleInsider).

Apple's $40 billion investment
But Apple's biggest spending ever is on itself. In the past 12 months, Apple has bought back more than $40 billion worth of its shares, according to comments by CEO Tim Cook in a February interview with The Wall Street Journal.

"It means that we are betting on Apple. It means that we are really confident on what we are doing and what we plan to do," Cook told WSJ after explaining that Apple bought $14 billion of its own shares in the two weeks after it reported first-quarter results. "We're not just saying that. We're showing that with our actions."

The company has essentially taken about 8.5% of its shares outstanding off the market in the past 12 months. This is why Apple's earnings per share were able to grow 5% from the year-ago quarter in Apple's fiscal 2014 first quarter despite zero growth in net income.

With big spending like this, Apple management undoubtedly believes the company has a bright future. Why wouldn't they? There's no meaningful evidence Apple is facing the beginning of decline anytime soon.

It's a great time to own Apple stock. Not only is there very little (if any) growth priced into the valuation today but Apple is putting its money where its mouth is, buying itself a spaceship and repurchasing shares at an unprecedented scale. But even though short-term catalysts loom, Apple investors are in the fortunate position of knowing that Apple is introducing products in new categories this year.

It's full-steam ahead for giants like Apple and Google in the next phase of their race to help create -- and then cash-in on -- the next major trend in consumer tech.

Exactly what the "next big thing" will be in tech is one of the most hotly debated topics out there. Recently, I argued that the global smart-watch market will be the next major industry to undergo a major technological renaissance.

Undoubtedly, there are still those that'll look dubiously on my opinion. And in those instances, many will argue instead that the global TV market is perhaps more ripe for reinvention. And to be sure, infusing the TV viewing experience with software more closely resembling that of today's tablets or smartphones would represent a drastically improved consumer experience. Now, there are also some rather unfortunate economic realities that could make this possible paradigm harder than many realize to get off the ground, at least as many envisioned it.

Source: Apple

But recent reports highlighting talks between Apple and cable behemoth Comcast  showed that Apple's smart TV ambitions might still be alive and well, albeit in slightly different form than many originally envisioned.

Taking Apple TV to the next level
According to reports from a number of sources, Apple and Comcast are fast at work discussing a possible partnership that would help push the cable industry toward the more user-friendly interface for which many have long clamored.

Apparently, these talks remain in their early phases, and given all entrenched factions and preexisting vested interests that drive the current structure of the global TV market, there's still plenty that could derail an Apple-Comcast deal. In terms of its exact mechanics, it appears the service would involve Apple creating some kind of advanced TV service that would flow through Apple's already available Apple TV set-top boxes and be distributed to Comcast subscribers over Comcast's own cable-network infrastructure.

This deal could certainly prove mutually beneficial for both companies. For Apple, it would access a possible new growth driver as the global smartphone and tablet markets slowly inch toward maturity. In turn, Comcast also stands to benefit from integrating a company with Apple's deep mobile expertise. Falling cable subscriptions have operators like Comcast fearing that the rise of viable streaming alternatives like Netflix could lead to cord cutting becoming a more widespread trend than it already is, especially among millennials. 

Could Apple's new network be a Netflix killer?
There's also another angle at work with Apple's potential Comcast deal that could hold some negative implications for the likes of Netflix as well.

Partnering with a cable operator like Comcast would allow Apple to deploy its new service across Comcast's cable network, rather than over the Internet as streaming companies like Netflix and Hulu do today. This could give Apple's new service a potential leg up in terms of delivery quality over these streaming companies. As we've seen with the recent FCC ruling's on net neutrality, Internet-based services like Netflix now must pay to ensure their data-intensive services receive enough bandwidth to maintain satisfactory quality. By delivering its service over Comcast's cable network instead, Apple would be able to largely skirt the issue of delivery quality by effectively making its service on par with Comcast's current on-demand viewing options.

By all accounts, this story line is still in its infancy and there's plenty that could go wrong. But with Comcast and Apple each addressing growing needs by joining forces, the potential for these two companies to create a service to be reckoned with makes this a must-watch story for anyone interested in investing in this space.

Apple has been accused of being short on innovation since Tim Cooke took the leadership reins. Examining a transcript of the company's recent earnings call, the ratio of the word "revenue" to "innovation" shows up in the prepared remarks at a measure of 22:1. This is likely due to a management transition that required innovation be pushed to the individual product silos. This development transition simply took multiple years, and the innovation lag is coming to an end.

Apple's internally built CDN
A few weeks back, Dan Rayburn, independent industry analyst and entrepreneur, published an article discussing how Apple is building its own external Content Delivery Network to provide electronic entertainment to consumers. This is a step away from Apple's traditional modus operandi of using third parties externally. This could have both negative and positive implications for Apple's partners such as Akamai Technologies and Fusion-io , who provide CDN services and data center infrastructure.

Apple appears to be putting effort into both delivering content independently and partnering with the pipe owners who deliver content, attacking the problem from multiple angles. According to AppleInsider, Apple is considering offering on-demand music on other platforms besides iOS in what would be a break from tying its services to its hardware. The company also appears to be in discussions with Comcast to offer a streaming set top box that will have premium Internet access and ensure the seamless distribution of video content for movies. Regardless of how this plays out, this effort shows that Apple is pushing development of the iTunes business, which generates $4.4 billion in revenue and is growing at 19% year-over-year.

Innovation dormancy may be over
The combination of internal infrastructure development, partnerships on multiple fronts, and embracing of third party operating systems could signify that Apple is coming out of its innovation dormancy like a rocket. The problem with having a single person leading all of the great innovations is that the company is limited by that person's abilities, even if the vision is near limitless. As Tim Cook said on the fourth-quarter earnings call, "We have zero issue coming up with things we want to do that we think we can disrupt in a major way. The challenge is always to focus to the very few that deserve all of our energy."

iTunes is a business in itself
Clearly, both consumers and investors can benefit from improved content speeds and better, cheaper content access. At $4.4 billion, iTunes represents 8% of revenue, and it is growing at three times the overall revenue growth rate. However, this is primarily due to App Store sales, as opposed to content such as music or video. If Apple has found a way to make iTunes the go-to place for content streaming, there could be an inflection point coming up in this growth rate.

Partners benefit as well
Fusion-io could be a derivative play on the expansion of iTunes as well. As a supplier of flash caching to improve server performance, and an existing Apple partner in its data centers, the slowdown in equipment purchasing could be reversing. Fusion-io has been called One of the Great Turnarounds of 2014, and Apple's data center expansion would be a key growth driver for the company.

Telecom companies face a highly competitive market amid the global establishment of 4G, the new generation of mobile ultra-broadband Internet access. The most powerful organizations in this business form a sort of oligopoly, and these currently employ aggressive pricing strategies and acquisitions in order to expand their own market share.

In this difficult context, the world's second largest mobile telecommunications company, Vodafone , is not falling behind. Early this year, it sold 45% of its stake of Verizon for $130 billion. This transaction gave the company a huge amount of cash to invest in acquisitions and other expansion strategies to improve competitiveness. Now, it plans to buy Grupo Corporativo Ono, the largest cable operator in Spain, for $10 billion. The acquisition would allow Vodafone to gain approximately 1.9 million customers in Spain. This could also trigger a wave of merger and acquisition activity across Europe. So, why is Vodafone making this move?

Source: Vodafone

Full expansion
Last year, Vodafone started Project Spring, an investment program designed to improve the quality of its network and services in Europe and emerging markets such as India and Africa. To carry out this project, Vodafone partnered with tech companies such as Huawei, Ericsson, and NSN. The company also acquired a controlling stake in Kabel Deutscheland Holding, the largest cable television operator in Germany, for more than $10 billion, and will use the company as its central fixed-business in Germany.

So, buying Ono is just another expansion move in Europe. The acquisition will allow Vodafone to strengthen its presence in Spain, which is experiencing fast macroeconomic recovery; in the final quarter of 2013, Spain's economy grew at its fastest pace in almost six years. Note that Ono's acquisition is in line with Vodafone's agreement with French-based telecom Orange to build fiber networks in Spain.

Great stand-alone business
As a stand-alone business, Ono is quite attractive. As Spain's largest next-generation network, Ono's network is available across 13 of Spain's 17 regions. Significant scale advantages allowed Ono to enjoy a 42.6% EBITDA margin in 2013.

But, Ono is not only big, it is also one of the most modern networks in Europe. The company started building its next-generation network in 1998 and has, so far, invested roughly $9.6 billion in developing a future-proof network covering 41% of Spanish homes. Ono's scale and technological advantages should allow Vodafone to benefit from various cross-selling and up-selling opportunities. 

Competitors
Through its planned acquisition of Ono, Vodafone will inevitably face the Spanish telecom giant Telefonica SA . This company has a strong presence in both Latin America and Spain. However, it has gone through difficult times since Spain's 2011 crisis.

Recently, it seems like Telefonica is recovering. A few weeks ago, the company revealed that its net profits have grown by 17% and it is surpassing its debt reduction objectives. Its 2013 revenue showed a year-over-year 0.7% growth in organic terms, plus 1.8% yearly increase in the fourth quarter.

In Germany, Vodafone will confront another giant, Deutsche Telekom . The German company, owner of T-Mobile, saw profit in 2013 after a period of net losses. Most of its sales came from the U.S.

Final foolish takeaway
To continue expanding its European operations, Vodafone is buying Ono for roughly $10 billion. As the largest next-generation network in Spain -- which is quickly recovering after the country's 2011 crisis -- Ono will provide Vodafone with scale and technological advantages. Note that Vodafone's latest acquisitions also expose the company to huge competitors such as Telefonica in Spain or Deutsche Telekom in Germany. Finally, the move could trigger a wave of merger and acquisition activity across European telecoms interested in gaining scale advantages to remain competitive.