Finisar Corp. (NASDAQ: FNSR) saw its shares soar early on Wednesday after the firm announced that Apple Inc. (NASDAQ: AAPL) would be investing $390 million. Specifically, Apple is investing this sizable sum to increase the production of chips that power multiple iPhone X features.
This is the second investment from Apple’s $1 billion advanced manufacturing fund. The goal of this fund is to foster innovation and create jobs. The original investment was $200 million into Gorilla Glass manufacturer, Corning Inc. (NYSE: GLW) back in May.
Finisar intends to use the money to transform a previously closed plant in Sherman, Texas, to make high volumes of laser diodes, known as vertical-cavity surface-emitting lasers (VCSELs).
Back in its fourth quarter of 2017, Apple had announced that it would buy 10 times more VCSELs than were made worldwide.
According to Apple:
The 700,000-square-foot plant expects to begin shipping in the second half of 2018, and its output will make Sherman the VCSEL capital of the US. Finisar will soon start hiring 500 highly skilled workers and Armstrong, born and raised there, is busy getting the building ready.Shares of Finisar traded up about 28.7% at $24.85 Wednesday morning. The consensus analyst price target is $23.13, and a 52-week trading range is $17.20 to $36.41.
Apple traded at $173.00 a share, in a 52-week range of $114.76 to $176.24 and with a consensus price target of $187.74
0 FINANCING ON THE F-150 PICK UP
Ford Motor Co.’s (NYSE: F) F-150 pickup has been the top-selling vehicle in the United States for decades. Its sales are up 10.1% through November to 807,379. So, why is the manufacturer offering an aggressive 0% financing for 72-week deal to induce people to buy the truck? No matter what the reason, it means that Ford must have problems clearing inventory, a signal of slack demand as 2017 models make way for those for 2018.
The F-150 has crushed its competition this year. Sales of GM’s Chevy Silverado, the number two pickup, are down 0.5% this year to 518,188. Sales of Fiat Chrysler’s Ram are up only 3.2% to 455,816.
The exact F-150 incentive is 0% APR financing for 72 months. It is only available on 2017 models. The Super Duty and F-150 Raptor are excluded. Customers have to take delivery by January 2, 2018. The deal, according to Ford, was “just announced.”
The 2018 version of the F-150 is already on dealer lots. It was recently named Motor Trend “Truck of the Year.” Although the model has some new features for 2018, none are a major departure from the 2017 model.
Ford relies on the F-series for a huge portion of its total sales. Ford sold 2,334,290 cars and light trucks through November, down 1.1%. The surge in the pickup’s sales are particularly important this year, as Ford struggles for market share in an industry in which total sales have stopped growing.
Incentives are particularly painful for car companies. The industry works on modest margins for most vehicles. Even incentives erode that buffer. But Ford almost certainly cannot avoid offering consumers a special deal. The 2018 F-150 models are for sale. Ford is stuck with too much inventory from last year. Too bad.
NOVEMBER NEWSLETTER 6
GOAL IS SMOOTH
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