Under Armour gets a taste of March Madness

Posted: March 23rd, 2015 | Author:

Under Armour (UA) is drawing praise for its increased presence in college basketball.


“It’s really important from an athletic credibility point of view to have the teams that win or do well in college sports,” notes NPD Group’s Matt Powell.



The company is having some decent exposure in this year’s NCAA college basketball tournament with Maryland, Notre Dame, and four other teams wearing its uniforms – but things get really interesting next year when Michigan, Texas, Michigan State, Indiana, Wisconsin, and Virginia all have their apparel contracts expire. Nike (NKE) found out with the race for Kevin Durant’s shoe contract that the presence of Under Armour in the bidding can drive up the contract value. Some analysts see the risk on the UA side as it goes up against the battle-tested Swoosh over shoe and uniform deals.


Last year, Under Armour grew its footwear sales by 44% to $431M.


Shares of Under Armour are +36% over the last year.


Previously: NCAA tournament: Under Armour a bigger player, Nike with 71% logo share (Mar. 17 2015)


Via Seeking Alpha



Crafty M&A in Beer, Coffee, and Soda

Posted: February 14th, 2015 | Author:

Craft soda is starting to become a trend to watch closely, according to industry insiders. Though still accounting for only ~1% of the total U.S. soda market, major retail chains have increasingly been willing to bet on local craft brands in store aisles. The craft craze is old news for the beer industry where coming-of-age millennials buy craft/local beers at a 50% higher rate than brand-loyal older generations. Fading stars such as Budweiser and Bud Light are testament to the impact of the millennial paradigm. The craft influence in coffee hasn’t been lost on Starbucks which has strategically deployed trucks on college campuses in an effort to win over students. Despite the progressive reputation of Starbucks, analysts think new upstarts such as Craft (subscription) and Cups (app) have a shot of gaining influence with the Indie-minded millennial crowd on “customization” and pricing.


What to watch: An increase in M&A activity in the beverage sector is expected as major companies strategically pick off more local craft brands to incubate.


Craft beer watch: [[BUD]], [[SBMRY]], [[TAP]], [[HEINY]], [[SAM]], [[BREW]], [[STZ]], [[BIBLF]], [[BRBMF]].

Craft coffee watch: [[GMCR]], [[SBUX]], [[JVA]], [[SJM]], [[KRFT]], [[DNKN]], [[QSR]], [[MCD]].

Craft soda watch: [[PEP]], [[KO]], [[MNST]], [[COT]], [[DPS]], [[JSDA]], [[REED]], [[SODA]],  [[FIZZ]].


Via Seeking Alpha and CNBC



Apple: The Sun Also Rises

Posted: February 13th, 2015 | Author:

When a tech company with a market capitalization of over $700B makes a mega-investment in energy it’s a big deal. Enter Apple and solar.


It’s the biggest-ever solar procurement deal for a company that isn’t a utility, and it nearly triples Apple’s stake in solar –  Bloomberg New Energy Finance on Apple’s $850M solar deal with First Solar


Apple’s large bet on solar is based in part on economics. The price of solar power has fallen more sharply than many other energy alternatives (see graph below). Some analysts see a break-even date on the deal in less than 10 years. The Cupertino company joins Google, Microsoft, Wal-Mart, and Amazon in pushing solar initiatives.



Via Bloomberg and Seeking Alpha



Car Wars: Hydrogen vs. Electric Vehicles

Posted: January 22nd, 2015 | Author:

The automobile industry is about to get interesting with governments and automakers aligning behind different technologies. Google with the self-driving car. Ford and GM producing next-gen versions of popular models. And now this:


“It’s time to introduce a hydrogen era,”


That was Japanese Prime Minister Shinzo Abe in Tokyo as he announced a government initiative to build out a self-service hydrogen network of stations.

The development comes only two days after Tesla Motors (TSLA) CEO Elon Musk called hydrogen a “dumb” energy storage system.

Toyota (TM) is the pioneer in the FCV field and is building 1.5K Mirai vehicles for the Japanese government. Though taking a cautious approach to rolling out production, the world’s top-selling automaker isn’t ruling out selling hydrogen cars in all markets eventually.


Review: Car and Driver’s deep dive into the Toyota Mirai FCV.

Related: Toyota opens up 5680 patents on fuel-cell technology to other automakers.


What to watch: Abe has endorsed larger fuel-cell subsidies than those offered for electric vehicles in China, Europe, and the U.S. Will more governments take a side in the hydrogen vs electric battle setting up in the automobile industry?

Also in the EV/hybrid game: Ford, General Motors, Nissan, BMW, Daimler, Honda, Mazda, Suzuki, Subaru, Mitsubishi.


Via Seeking Alpha and Reuters



Retailers need a good algorithm

Posted: November 11th, 2014 | Author:

A snap this buy that concept is coming to retail.


Macy’s will announce a visual search app shortly, according to Women’s Wear Daily. The visual search concept has become a major topic in retail. Apps like the one about to be introduced by Macy’s will allow users to upload pictures of outfits they like and receive matches from a retailer’s existing inventory.

Via Seeking Alpha and Women’s Wear Daily


The ability to shop via image search inside an app is a trend that will arrive in time for the 2014 holiday season. The retailer that works out the best algorithm for photo searches just might find itself with a boost in sales.




Meet the new Netflix

Posted: October 11th, 2014 | Author:

There’s no slowdown in Netflix, despite growing competition from Amazon, Hulu, and Apple. If anything the streaming giant has become more aggressive than ever with its international growth and content deals continuing to disrupt the media landscape. Though consumers have seen some changes with the Netflix user interface which have been notable, it’s behind the scenes where the company has taken dead aim at cracking the bundled content model of the pay-TV industry.


What’s new

– Push for Ultra-HD TVs a factor Netflix

– Redbox Instant by Verizon bites the dust

– Netflix and IMAX look to disrupt the Hollywood model

– New international launches for Netflix

via Seeking Alpha


What to watch

– Valuation on Netflix continues to factor in enormous global subscriber growth and margin expansion. With the company’s content acquisition costs always a bit of a mystery, a bet on Netflix factors in the service penetrating even further into digital/mobile/household viewing habits to become a standard.

– NFLX +3.09% over the last 90 days, +22.8% YTD, +38.1% over the last year, P/E ratio 135.9, market cap $27.2B.



U2 is Smart as a Whip

Posted: September 12th, 2014 | Author:

The love-fest between Apple and U2 appears to have had some economic benefit for the boys from Dublin. After giving away its current album for free on iTunes, a quick check of the iTunes best-selling charts reveals 17 U2 titles in the top 100 albums. Even 1987 release The Joshua Tree is throwing its weight around at number 12 on the list.


Those streets without a name are paved with gold.


Via Re/Code and Slashdot.org



Tesla Motors and Toyota to Tangle in 2015

Posted: September 12th, 2014 | Author:

Toyota says it has no new or pending battery projects under discussion with Tesla Motors .The announcement is the Japanese automaker’s first official response to a statement from Elon Musk earlier this week that a fresh Tesla-Toyota partnership could happen within a few years.

What to watch: The development could ratchet up the dialogue in the electric car vs. hydrogen fuel cell debate as both automakers have aggressive plans for 2015 for their preferred technology and have been known to take swipes at each other. In the U.S., Tesla’s Model X is expected to outsell the Toyota FCV, while heavy subsidies by the Japanese government could favor the FVC on its home turf.

Tesla vs Toyota

Via The Wall Street Journal and Seeking Alpha



Why the Fed will raise interest rates

Posted: August 22nd, 2014 | Author:

The Federal Reserve will raise interest rates sooner rather than later. Adjust accordingly.

Source: Bloomberg News



Wal-Mart pounces on Amazon DVD stumble

Posted: August 17th, 2014 | Author:

Amazon’s move to pull Disney DVD titles from its website could be backfiring as Wal-Mart aggressively moves into the distribution void.


Pre-orders for Captain America: The Winter Soldier soared 90% after Wal-Mart offered a price cut on the Marvel film to $14.96 vs. the list price of $14.99 on Amazon where consumers can only sign up for an e-mail notification on availability. Analysts note that although DVD sales are only a small piece of the e-commerce pie, any development that levels out the playing field is a boost to Wal-Mart’s online brand.  Global e-commerce sales rose 24% at Wal-Mart in Q2, led by double-digit growth in the U.S. and China.

Via Seeking Alpha


Looking ahead: DVD sales typically peak during the holiday shopping season giving Disney even more leverage in ongoing negotiations with Amazon over pricing. The development also highlights the trouble Amazon may have extracting margin gains easily from retail partners with the Bentonville giant looking over its shoulder.



HBO vs. the Netflix ‘Albanian’ Army: Now it Gets Real

Posted: August 9th, 2014 | Author:

The battle between Netflix (NFLX) and HBO Go appears to be just beginning as HBO hires more software engineers and aggressively looks toward international growth opportunities. Despite active user growth of 35% in Q2 for HBO Go, it’s Netflix (NFLX) which has been the most aggressive streaming content player. CEO Reed Hastings took to Facebook to call attention to what he calls the milestone achievement of the company passing HBO in subscriber revenue:


“HBO rocks, and we are honored to be in the same league,”


During Time Warner’s (TWX) earnings call earlier this week, CEO Jeff Bewkes was spared any direct questions about the Netflix factor. Perhaps just as well after Bewkes in 2010 famously likened the metamorphosis of Netflix into a streaming giant to the Albanian army trying to take over the world.

The growing war for streaming content could help boost studios with a sizable portfolio of titles. Lion’s Gate (LGF) and AMC Networks (AMCX) come to mind.


Sources: Seeking Alpha, Facebook, TWX earnings call transcript




Starbucks is Invading a Grocery Store Near You

Posted: August 3rd, 2014 | Author:


The Starbucks Growth Engine: Eventually Starbucks (SBUX) will saturate the markets in the U.S., Europe, and China with its store footprint, which could bring into the investment matrix the question of growth as pricing and comp sales level out. The rich valuation on SBUX factors in growth from new areas – one of which could be consumer packaged goods.


Starbucks 2.0: There’s something major brewing in grocery stores this summer and it’s a direct result of the forward-looking strategy of the coffee giant from Seattle. The company’s consumer packaged goods are grabbing prime real estate in grocery stores at the end caps and in sections where energy drinks, coffee, and milk products are sold. Reported results from Starbucks for FQ2 and FQ3 – as well as some anecdotal evidence from retail shopping in Florida, Missouri, and Illinois – suggest sales for the CPG channel are accelerating.


Channel Development: Starbucks grew sales 13% and widened margins by 800 bps to 37.1% last quarter in a sector where growth was on the sluggish side. The company forecasts growing margins another 600 bps in FQ4. Early results from the segment indicate the brand is powerful enough to command premium pricing and allow Starbucks to dip into new categories.


Source: Starbucks FQ3 report