My Home About Me

Back in July we talked about an opportunity in Eastman Kodak (NYSE:EK) and today we are still bullish on the stock. Since our previous post, the stock continues to trade sideways but not with out direction. Some of you may have noticed the resistance around $28.50 - $29.00 but also take the series of lower lows over the past couple weeks. The stocks now forms an ascending triangle as it searches for the necessary volume needed to break the above resistance. Despite the technical setup here and bullish nature of the stock over the last year, we see reason for concern fundamentally.

Kodak Chief Executive Antonio M. Perez now dumps on digital cameras, calling them a "crappy business"? Simple: While blazing growth of camera sales has helped blunt the effects of Kodak's fast-fading film revenues, it hasn't replaced the rich profits of the film business. Even the best mass-market cameras yield slim profit margins. So, although Kodak's digital camera business was a roaring sales success, it turned out to be a crushing profit disappointment. Perez, who arrived at Kodak in 2003 and became chief executive last year, had championed a dramatic change only to find it wasn't the right model for turning the company around.

Perez now looks to change the core business that Kodak has known for the past several decades. A task that at the very least can be considered a huge challenge for the company. Kodak is looking to take same approach to photography that Apple has taken to music, that being to provide services that help consumers manage their personal libraries of images. Kodak now seeks to develop a slew of new digital photo services that will yield higher profit margins. These include online photo sharing (Kodak Gallery) to a new technology, currently nicknamed "Scan the World," that is designed to digitize old photos quickly and easily.

I personally use Kodak Gallery on a daily basis and love the service. They do a wonderful job and the site is very simple to use. It is not however without its competition. Kodak is not the first to market and competes now with Internet titans like Apple, SnapFish and Shutterfly.

While the coming years at Kodak will ultimately define how it does over the course of the next several generations, we love the chart pattern here and think the changes at Kodak are ultimately in the stock holders interest.

22Dollars - Personal Wealth Management
Stock Quotes and Growing Personal Wealth by Managing Your Own Money! 22dollars is your online source for investment ideas, stocks analysis, business and other worldly issues. Geared towards the young professional, 22Dollars is written by successful young professionals who are ambitious and driven to succeed in life, cause in the end - no body cares more about your money than you.
Article by 22Dollars | Subscribe via RSS | Join Club22 Free

Technical chart patterns   support/resistance levels   S&P 500 chart pattern   ETFs (exchange traded funds)   Deron Wagner   emini's S&P 500   earnings   economic data   Biotech HOLDR (BBH)   Emini's Nas 100   Short selling ETFs   exchange traded funds   sector rotation   etfs   corn futures   selling options   commodities   mcio   minecore   sapphire