InvestorGuide.com Stock of the Day Stock of the day from InvestorGuide.com http://www.investorguide.com InvestorGuide Stock of the Day - Johnson & Johnson Invests $1.5 Billion in Promising Alzheimer Treatment - July 2, 2009 IG logo
Johnson & Johnson (JNJ)

Johnson & Johnson Invests $1.5 Billion in Promising Alzheimer Treatment

Pharmaceuticals has always been one of those fields which seems to do really well overall, despite any overarching economic issues. Success does not come without hard work and competition, however, as the field is made up of strong corporations including Johnson & Johnson, Wyeth (WYE: Charts, News, Offers), and Pfizer (PFE: Charts, News, Offers). Each company would surely like to be the dominant player in the market, and these companies aren't afraid to make some big moves in attempts to gain control. Johnson & Johnson announced one such move this morning, and it will be interesting to see what it does to the health of the involved companies.

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Stock Analysis Johnson & Johnson announced this morning that they are about to become involved in an Alzheimer treatment project. Elan Corporation (ELN: Charts, News, Offers), a pharmaceutical company based in Ireland, has been working on the development of Bapineuzumab, a treatment for Alzheimer patients, which works by removing protein that builds up in the brain of the patients. So far, the treatment has shown to be successful, and the medicine is currently going through what should be its third and final round of testing. Furthermore, this treatment is unique compared to other current Alzheimer drugs; it appears to be the first treatment that may actually slow the progress of the disease, instead of just treating the symptoms.

Johnson & Johnson will be paying Elan $1 billion, for which they will be receiving most of the assets relating to this project, as well as the rights for the treatment. Additionally, Elan will be giving Johnson & Johnson an 18.4% stake in their company. Johnson & Johnson has also agreed to invest an additional $500 million in the project, which will be used to continue testing and to further develop the drug. Because the treatment has already been so thoroughly tested, Johnson & Johnson is investing in a drug that they think has a high chance of success, decreasing the perceived risk of the arrangement.

Elan is making out well in this deal as well. As part of the agreement, Johnson & Johnson is developing a new company to deal with this project, from which Elan will get 49.9 percent equity interest . That means almost 50% of the profits and royalties will still go directly to Elan. Furthermore, this project was originally a joint collaboration between Elan and Wyeth, and with the new agreement, this will not have to change, making the deal more agreeable to all involved parties. Elan has also been in desperate need of cash recently, and the money it's receiving from Johnson & Johnson will go a long way towards helping them pay off their debt. This news has thrilled Elan's investors, sending their shares up around 30% since the announcement.

The deal has already been approved by the boards of both companies, and it looks like there is nothing stopping this from moving forward. Both parties benefit strongly from the arrangement, and with the support of another major company, perhaps the development of a successful treatment is even more believable. And although this deal looks to be a win-win for both companies, the most hopeful outcome would be if the arrangement was able to develop the most promising Alzheimer drug so far; and in that case, the biggest winner of the whole situation just might be the patients.



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Johnson & Johnson (JNJ)

Johnson & Johnson Invests $1.5 Billion in Promising Alzheimer Treatment

Pharmaceuticals has always been one of those fields which seems to do really well overall, despite any overarching economic issues. Success does not come without hard work and competition, however, as the field is made up of strong corporations including Johnson & Johnson, Wyeth (WYE: Charts, News, Offers), and Pfizer (PFE: Charts, News, Offers). Each company would surely like to be the dominant player in the market, and these companies aren't afraid to make some big moves in attempts to gain control. Johnson & Johnson announced one such move this morning, and it will be interesting to see what it does to the health of the involved companies.

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Stock Analysis Johnson & Johnson announced this morning that they are about to become involved in an Alzheimer treatment project. Elan Corporation (ELN: Charts, News, Offers), a pharmaceutical company based in Ireland, has been working on the development of Bapineuzumab, a treatment for Alzheimer patients, which works by removing protein that builds up in the brain of the patients. So far, the treatment has shown to be successful, and the medicine is currently going through what should be its third and final round of testing. Furthermore, this treatment is unique compared to other current Alzheimer drugs; it appears to be the first treatment that may actually slow the progress of the disease, instead of just treating the symptoms.

Johnson & Johnson will be paying Elan $1 billion, for which they will be receiving most of the assets relating to this project, as well as the rights for the treatment. Additionally, Elan will be giving Johnson & Johnson an 18.4% stake in their company. Johnson & Johnson has also agreed to invest an additional $500 million in the project, which will be used to continue testing and to further develop the drug. Because the treatment has already been so thoroughly tested, Johnson & Johnson is investing in a drug that they think has a high chance of success, decreasing the perceived risk of the arrangement.

Elan is making out well in this deal as well. As part of the agreement, Johnson & Johnson is developing a new company to deal with this project, from which Elan will get 49.9 percent equity interest . That means almost 50% of the profits and royalties will still go directly to Elan. Furthermore, this project was originally a joint collaboration between Elan and Wyeth, and with the new agreement, this will not have to change, making the deal more agreeable to all involved parties. Elan has also been in desperate need of cash recently, and the money it's receiving from Johnson & Johnson will go a long way towards helping them pay off their debt. This news has thrilled Elan's investors, sending their shares up around 30% since the announcement.

The deal has already been approved by the boards of both companies, and it looks like there is nothing stopping this from moving forward. Both parties benefit strongly from the arrangement, and with the support of another major company, perhaps the development of a successful treatment is even more believable. And although this deal looks to be a win-win for both companies, the most hopeful outcome would be if the arrangement was able to develop the most promising Alzheimer drug so far; and in that case, the biggest winner of the whole situation just might be the patients.



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]]> http://www.investorguide.com/stock-archives.cgi?date=070209 http://www.investorguide.com/stock-archives.cgi?date=070209 July 02, 2009 InvestorGuide Stock of the Day - Has General Mills Found the Recipe for Success? - July 1, 2009 IG logo

General Mills (GIS)

Has General Mills Found the Recipe for Success?

You might consider recent sales of brand name food products, such as those items manufactured and sold by General Mills, as somewhat of a conundrum. On the one hand, maybe sales of brand name products are decreasing, as customers attempt to save money by purchasing store brand items. On the other hand, perhaps more people are sacrificing their frequent meals out at restaurants, and instead have returned to more frequent grocery shopping trips, and are picking up brands they are familiar with. Well, based on the earnings report announced by General Mills this morning, the answer seemed pretty clear, at least for General Mills. So, in which direction are sales trending, and why?

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Stock Analysis Fortunately for General Mills, it appears that the second situation is the case, at least when it comes to General Mills products. The company includes well-known brands such as Cheerios, Progresso, Betty Crocker, Bisquick, Pillsbury, and Yoplait. Although some other companies have pointed to a increasing trend with store brand items, many consumers have remained loyal to the brands they know and trust from General Mills.

For the fourth quarter, the company reported earnings of $358.8 million, or $1.07 per share; almost an 100% increase from the year before, when the company earned $185.2 million, or 53 cents per share. Excluding one-time items, earnings worked out to 86 cents per share, which beat expectations of 81 cents per share. For fiscal 2009, the company ended up at $3.80 per share, beating fiscal 2008's amount of $3.71 per share. Sales also jumped 8% to $14.69 billion.

Based on the good performance this year, General Mills remains optimistic that they will continue to do well next year, and in fact hopes to do even better! They announced an outlook for fiscal 2010 in the range of $4.20 to $4.25 per share. Analysts are predicting something slightly lower, at an average of $4.18 per share. The company hopes that some of the new products they have been releasing will be unique and appealing enough to attract customers who might have otherwise tended to purchase from another brand; this includes new varieties of Cheerios and Yoplait yogurt, and also products which contain important dietary features such as being high-fiber or gluten-free.

One of the biggest concerns that the company is facing is the currency exchange rate; the rates are unfavorable to General Mills, and have been calculated to have been reducing the sales values significantly. This has affected them in the past year, and it is expected that this will continue to affect them in the upcoming year. In some cases, the company has had to increase prices in order to try to counteract this. But all in all, the company remains optimistic, and even these concerns could not hold them back from forecasting a very strong upcoming year. If consumers continue to act in the same way, it may be that General Mills has found the recipe for success.



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]]> IG logo

General Mills (GIS)

Has General Mills Found the Recipe for Success?

You might consider recent sales of brand name food products, such as those items manufactured and sold by General Mills, as somewhat of a conundrum. On the one hand, maybe sales of brand name products are decreasing, as customers attempt to save money by purchasing store brand items. On the other hand, perhaps more people are sacrificing their frequent meals out at restaurants, and instead have returned to more frequent grocery shopping trips, and are picking up brands they are familiar with. Well, based on the earnings report announced by General Mills this morning, the answer seemed pretty clear, at least for General Mills. So, in which direction are sales trending, and why?

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Stock Analysis Fortunately for General Mills, it appears that the second situation is the case, at least when it comes to General Mills products. The company includes well-known brands such as Cheerios, Progresso, Betty Crocker, Bisquick, Pillsbury, and Yoplait. Although some other companies have pointed to a increasing trend with store brand items, many consumers have remained loyal to the brands they know and trust from General Mills.

For the fourth quarter, the company reported earnings of $358.8 million, or $1.07 per share; almost an 100% increase from the year before, when the company earned $185.2 million, or 53 cents per share. Excluding one-time items, earnings worked out to 86 cents per share, which beat expectations of 81 cents per share. For fiscal 2009, the company ended up at $3.80 per share, beating fiscal 2008's amount of $3.71 per share. Sales also jumped 8% to $14.69 billion.

Based on the good performance this year, General Mills remains optimistic that they will continue to do well next year, and in fact hopes to do even better! They announced an outlook for fiscal 2010 in the range of $4.20 to $4.25 per share. Analysts are predicting something slightly lower, at an average of $4.18 per share. The company hopes that some of the new products they have been releasing will be unique and appealing enough to attract customers who might have otherwise tended to purchase from another brand; this includes new varieties of Cheerios and Yoplait yogurt, and also products which contain important dietary features such as being high-fiber or gluten-free.

One of the biggest concerns that the company is facing is the currency exchange rate; the rates are unfavorable to General Mills, and have been calculated to have been reducing the sales values significantly. This has affected them in the past year, and it is expected that this will continue to affect them in the upcoming year. In some cases, the company has had to increase prices in order to try to counteract this. But all in all, the company remains optimistic, and even these concerns could not hold them back from forecasting a very strong upcoming year. If consumers continue to act in the same way, it may be that General Mills has found the recipe for success.



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]]> http://www.investorguide.com/stock-archives.cgi?date=070109 http://www.investorguide.com/stock-archives.cgi?date=070109 July 01, 2009 InvestorGuide Stock of the Day - Corning Anticipates Significant Growth in LCD Glass Sales - June 30, 2009 IG logo

Corning (GLW)

Corning Anticipates Significant Growth in LCD Glass Sales

Corning Incorporated (GLW: Charts, News, Offers) announced today that it expects second quarter LCD glass sales to be double its first quarter totals. The specialty glass maker anticipates that demand will continue to improve even into the third quarter. Corning speculated further by adding that third quarter orders will probably surpass the company's manufacturing capabilities. These forecast adjustments are after it predicted a 50% sales increase back in May. What is causing Corning's better-than-expected sales numbers?

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Stock Analysis Corning Incorporated has been gradually reducing the prices of its LCD glass. These recent price reductions seem to have sparked a surge in flat screen glass demand from manufacturers. Corning has been focused on lowering its glass prices since late last year, and it seems committed to continuing this trend. However, the world's largest maker of liquid-crystal-display glass did admit that its price adjustments this quarter were minor compared to its first quarter price cuts. Corning's latest influx in demand has allowed the company to move remnant inventory from last year's fourth quarter. Corning Incorporated has streamlined its current inventory to a more efficient capacity level now that its left over glass has been accounted for.

Corning's combination of declining glass prices and more efficient inventory forecasting has helped generate its recent boom in demand. In addition, Corning Incorporated is seeing great results from its venture business endeavor with Samsung Electronics. Samsung Corning Precision Glass Company, Ltd. is anticipating a 50% increase in sales during the second quarter, a 10% improvement from its previously expected sales numbers. Samsung's success in the consumer flat screen television market seems to be trickling down the production chain, and Corning Incorporated could not be more pleased.

Overall, Corning has experienced an extremely positive growth in LCD glass sales. The specialty glass maker appears to be headed in the right direction for a turnaround after a rocky conclusion to its 2008 fiscal year. However, the big concern for Corning is whether or not it will be able to capitalize on the anticipated high demand. In an attempt to do so, Corning is reinstating previously shut down melting tanks in order to produce more glass. Only time will tell if this effort will be enough to match the upcoming third quarter sales in a profitable and effective manner.



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]]> IG logo

Corning (GLW)

Corning Anticipates Significant Growth in LCD Glass Sales

Corning Incorporated (GLW: Charts, News, Offers) announced today that it expects second quarter LCD glass sales to be double its first quarter totals. The specialty glass maker anticipates that demand will continue to improve even into the third quarter. Corning speculated further by adding that third quarter orders will probably surpass the company's manufacturing capabilities. These forecast adjustments are after it predicted a 50% sales increase back in May. What is causing Corning's better-than-expected sales numbers?

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Stock Analysis Corning Incorporated has been gradually reducing the prices of its LCD glass. These recent price reductions seem to have sparked a surge in flat screen glass demand from manufacturers. Corning has been focused on lowering its glass prices since late last year, and it seems committed to continuing this trend. However, the world's largest maker of liquid-crystal-display glass did admit that its price adjustments this quarter were minor compared to its first quarter price cuts. Corning's latest influx in demand has allowed the company to move remnant inventory from last year's fourth quarter. Corning Incorporated has streamlined its current inventory to a more efficient capacity level now that its left over glass has been accounted for.

Corning's combination of declining glass prices and more efficient inventory forecasting has helped generate its recent boom in demand. In addition, Corning Incorporated is seeing great results from its venture business endeavor with Samsung Electronics. Samsung Corning Precision Glass Company, Ltd. is anticipating a 50% increase in sales during the second quarter, a 10% improvement from its previously expected sales numbers. Samsung's success in the consumer flat screen television market seems to be trickling down the production chain, and Corning Incorporated could not be more pleased.

Overall, Corning has experienced an extremely positive growth in LCD glass sales. The specialty glass maker appears to be headed in the right direction for a turnaround after a rocky conclusion to its 2008 fiscal year. However, the big concern for Corning is whether or not it will be able to capitalize on the anticipated high demand. In an attempt to do so, Corning is reinstating previously shut down melting tanks in order to produce more glass. Only time will tell if this effort will be enough to match the upcoming third quarter sales in a profitable and effective manner.



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]]> http://www.investorguide.com/stock-archives.cgi?date=063009 http://www.investorguide.com/stock-archives.cgi?date=063009 June 30, 2009 InvestorGuide Stock of the Day - Microsoft Seeking to Unload Razorfish - June 29, 2009 IG logo

Microsoft (MSFT)

Microsoft Seeking to Unload Razorfish

Every company fits into some sort of category. Some companies are fast-thinking, innovative, or determined. Some make wise decisions while others are considered incompetent based on consecutive poor decisions. Imitation runs rampant among companies, but sometimes it can lead a company down the wrong path. This appears to be the case with Microsoft. Reports surfaced today suggesting that Microsoft is trying to unload its advertising agency Razorfish. Microsoft has only owned Razorfish for less than two years, so why is the company looking to sell the business so soon? What possessed the company to purchase the ad agency in the first place?

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Stock Analysis The highly-competitive search engine market has propelled Microsoft and Google (GOOG: Charts, News, Offers) into an ongoing war to outdo one another. This simple fact may be one of the reasons that Microsoft held onto Razorfish for as long as it did. Another reason may be the fact that Microsoft was not really seeking to own an ad agency. In 2007, Microsoft was focused on bolstering its ad network. The company believed that it found the necessary means to do this when it purchased aQuantive. Unfortunately, for Microsoft, the $6 billion purchase included the Avenue A/ Razorfish agency. Microsoft chose to roll with the punches and hold onto the agency possibly because Google still had DoubleClick/Performics. Microsoft and Google both came under fire as many suggested that the two companies owning ad agency was definitely a conflict of interest.

Google wised up and moved quickly to divest itself from Performics. Owning Performics put Google in the uncomfortable position of providing search engine marketing and search engine optimization services. Because of this, Google acquired a list of competitors that it chose not to have. Google announced last year that it had decided to sell the unit to advertising firm Publicis. Microsoft is bumping up against similar issues with Razorfish, so the decision to sell the unit is probably the right one for the company. Although Microsoft has retained Morgan Stanley to search for buyers, the company may not have to search far. Publicis has been named as one of the primary interested parties. Razorfish was originally valued at $800 million, but during these tough economic times Microsoft may be forced to settle for less.

Microsoft hasn't issued any comments about this divestiture as of yet. Investors and critics are anxiously awaiting word from Microsoft regarding this proposed decision. Hopefully Microsoft has learned to sell off businesses that they are not currently interested in pursuing or that pose some conflict of interest with their current business. Shares of Microsoft advanced during early morning trading.



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]]> IG logo

Microsoft (MSFT)

Microsoft Seeking to Unload Razorfish

Every company fits into some sort of category. Some companies are fast-thinking, innovative, or determined. Some make wise decisions while others are considered incompetent based on consecutive poor decisions. Imitation runs rampant among companies, but sometimes it can lead a company down the wrong path. This appears to be the case with Microsoft. Reports surfaced today suggesting that Microsoft is trying to unload its advertising agency Razorfish. Microsoft has only owned Razorfish for less than two years, so why is the company looking to sell the business so soon? What possessed the company to purchase the ad agency in the first place?

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Stock Analysis The highly-competitive search engine market has propelled Microsoft and Google (GOOG: Charts, News, Offers) into an ongoing war to outdo one another. This simple fact may be one of the reasons that Microsoft held onto Razorfish for as long as it did. Another reason may be the fact that Microsoft was not really seeking to own an ad agency. In 2007, Microsoft was focused on bolstering its ad network. The company believed that it found the necessary means to do this when it purchased aQuantive. Unfortunately, for Microsoft, the $6 billion purchase included the Avenue A/ Razorfish agency. Microsoft chose to roll with the punches and hold onto the agency possibly because Google still had DoubleClick/Performics. Microsoft and Google both came under fire as many suggested that the two companies owning ad agency was definitely a conflict of interest.

Google wised up and moved quickly to divest itself from Performics. Owning Performics put Google in the uncomfortable position of providing search engine marketing and search engine optimization services. Because of this, Google acquired a list of competitors that it chose not to have. Google announced last year that it had decided to sell the unit to advertising firm Publicis. Microsoft is bumping up against similar issues with Razorfish, so the decision to sell the unit is probably the right one for the company. Although Microsoft has retained Morgan Stanley to search for buyers, the company may not have to search far. Publicis has been named as one of the primary interested parties. Razorfish was originally valued at $800 million, but during these tough economic times Microsoft may be forced to settle for less.

Microsoft hasn't issued any comments about this divestiture as of yet. Investors and critics are anxiously awaiting word from Microsoft regarding this proposed decision. Hopefully Microsoft has learned to sell off businesses that they are not currently interested in pursuing or that pose some conflict of interest with their current business. Shares of Microsoft advanced during early morning trading.



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]]> http://www.investorguide.com/stock-archives.cgi?date=062909 http://www.investorguide.com/stock-archives.cgi?date=062909 June 29, 2009 InvestorGuide Stock of the Day - Shaw Communications Rides the Success of Digital Subscribers - June 26, 2009 IG logo

Shaw Communications (SJR)

Shaw Communications Rides the Success of Digital Subscribers

Shaw Communications Incorporated (SJR: Charts, News, Offers), the Canada-based telecommunications company, announced an increase in its third quarter earnings today. Its net income jumped from $128.1 million a year ago to $131.95 million while its revenue grew to $861.4 million from $792.2 million. Shaw's quarterly performance was just about on pace with Wall Street expectations. The Thomson Reuters mean estimate was for a profit of 32 Canadian cents a share as compared to Shaw's actual 31 Canadian cents a share. How was Shaw Communications Inc. able to post such strong profit totals in today's challenging economy?

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Stock Analysis A big contributor to Shaw's quarterly performance was its increase in digital subscribers. Over the past few years, Shaw Communications has been focused on increasing the breadth of its digital offerings, and its efforts seem to be generating a positive response from consumers. Shaw set the record for a quarterly gain in digital customers as digital cable subscribers increased 110,810 users to 1.19 million total subscribers. It also saw expansion with its digital phone line and internet services. However, it was not only the digital subscribers that were on the rise.

Although Shaw's digital business was responsible for a majority of its subscriber growth, other services experienced subscription list success too. The basic cable subscribers grew 9,622 users to a grand total of 2.28 million, and Shaw also reported that its direct-to-home phone customers increased. Overall subscription service growth during the quarter accounted for almost all of Shaw's 8.7% increase in service revenue. In addition, Shaw raised the prices on a lot of its service offerings. The combination of increased service rates and total subscribers helped lead Shaw to its promising quarter performance.

Overall, Shaw has done a nice job of harvesting subscribers for its various service offerings, especially digital. The digital service business is developing at an impressive rate, and its growth has been complimented nicely by Shaw's other services. However, eventually the subscription list growth will plateau, and Shaw Communications will have to find an alternative means to increase revenue. Shaw Communications is enjoying its current success at the moment, but only time will tell how it will respond to this fast approaching dilemma.



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]]> IG logo

Shaw Communications (SJR)

Shaw Communications Rides the Success of Digital Subscribers

Shaw Communications Incorporated (SJR: Charts, News, Offers), the Canada-based telecommunications company, announced an increase in its third quarter earnings today. Its net income jumped from $128.1 million a year ago to $131.95 million while its revenue grew to $861.4 million from $792.2 million. Shaw's quarterly performance was just about on pace with Wall Street expectations. The Thomson Reuters mean estimate was for a profit of 32 Canadian cents a share as compared to Shaw's actual 31 Canadian cents a share. How was Shaw Communications Inc. able to post such strong profit totals in today's challenging economy?

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Stock Analysis A big contributor to Shaw's quarterly performance was its increase in digital subscribers. Over the past few years, Shaw Communications has been focused on increasing the breadth of its digital offerings, and its efforts seem to be generating a positive response from consumers. Shaw set the record for a quarterly gain in digital customers as digital cable subscribers increased 110,810 users to 1.19 million total subscribers. It also saw expansion with its digital phone line and internet services. However, it was not only the digital subscribers that were on the rise.

Although Shaw's digital business was responsible for a majority of its subscriber growth, other services experienced subscription list success too. The basic cable subscribers grew 9,622 users to a grand total of 2.28 million, and Shaw also reported that its direct-to-home phone customers increased. Overall subscription service growth during the quarter accounted for almost all of Shaw's 8.7% increase in service revenue. In addition, Shaw raised the prices on a lot of its service offerings. The combination of increased service rates and total subscribers helped lead Shaw to its promising quarter performance.

Overall, Shaw has done a nice job of harvesting subscribers for its various service offerings, especially digital. The digital service business is developing at an impressive rate, and its growth has been complimented nicely by Shaw's other services. However, eventually the subscription list growth will plateau, and Shaw Communications will have to find an alternative means to increase revenue. Shaw Communications is enjoying its current success at the moment, but only time will tell how it will respond to this fast approaching dilemma.



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