Posted: May 10th, 2013 | Author: Clark Schultz
Estimize is no longer an enigma and should be used as a valuable financial tool in evaluating stocks for short-term price movements. The website lets users enter the game of forecasting what the earnings per share (EPS) and revenue for publicly-traded companies will come in at as quarterly earnings are reported and ranks the results. After testing the service for a few months – and refining the art of estimating company earnings – the following results were achieved in a very informal manner:
2013: 67% of the time estimates beat Wall Street on profit numbers and 60% of the time beat on revenue totals.
Overall: 51% of the time estimates beat Wall Street on profit numbers and 52% of the time beat on revenue totals.
1st Place Earnings Finishes: Molson Coors (TAP), DirecTV (DTV), Charter Communications (CHTR), Blue Nile (NILE), Kraft Food (KFRT)
All this with being one of the dullest blades in the Estimize.com shelf and relying on intuition as well as trend-watching above any heavy duty crunching of numbers. The actual consensus estimates on Estimize reportedly beats Wall Street projections 69.5% of the time. Could Estimize be gamed? Perhaps, in the future it will. But right now there is no evidence of that as the best contributors continue to make Wall Street analysts look silly earnings report after earnings report.
Bloomberg, Reuters, Morningstar, and sell-side analysts should be uneasy about this development.
Posted: May 3rd, 2013 | Author: Clark Schultz
Double-digit gains in April auto sales for the Big Three (GM, Ford, Chrysler) is another indication that the tables have turned in the automobile industry. The Detroit automakers increased their U.S. market share by 150 bps to 46.2% in just a year at the expense of Japanese automakers (Nissan, Honda, Toyota). The trend has become so entrenched that Nissan is cutting prices and Toyota is reeling from the realization that its powerhouse Camry is now “boring” to consumers.
Nice numbers so far, but is the best yet to come?
The bull case for automobile stocks:
1. Fresh models from GM and Ford have been well-received
2. Narrowing losses in Europe as deals are cut with unions
3. A demand rush with hundreds of thousands of vehicles needing to be replaced in the U.S. with the average age of vehicles on the road at 11.2 years.
Via Detroit Free Press, Seeking Alpha, and Autonews.com
Posted: April 10th, 2013 | Author: Clark Schultz
Alternative digital currency phenomenon Bitcoin is proving itself adept at keeping one step ahead of hackers but it’s also an investment similar to betting on a single number on a roulette wheel. Bitcoins materialize out of thin air through online mining with a value only derived by the online marketplace. Interesting for sure, but so where tulip bulbs.
Posted: April 5th, 2013 | Author: Clark Schultz
Most people want to eat fresher food and shop at organic stores, but what about investing in the sector? Though McDonald’s and Yum Brands (Taco Bell & KFC) have made a few dollars on the greasier side of the ledger, a few organic-leaning stocks look like they could capture the public’s appetite.
The Organic Food Model Stock Portfolio
Whole Foods Market (WFM) – The natural foods chain is up to 311 stores with same-store sales growth still in the 8%-9% range. Stats: P/E 31.1, Price-to-sales 1.26.
Hains Celestial Market (HAIN) – Owns a number of well-known brands sold as healthier options for consumers. Stats: P/E 24.9, Price-to-sales 1.81,
Danone (DANOY) - A French juggernaut heavy into yogurt, baby food, and cereal. Not a pure play into organic but could be a major beneficiary of the yogurt craze. Stats: P/E 19.7, Price-to-sales 2.16, shares are listed in Paris but ADRs trade on the NYSE.
Annie’s (BNNY) – Fresh off an IPO, the company is making a bigger splash in retail stores with its products now in over 25K locations. Stats: Metrics: P/E 91.1, Price-to-sales 4.12, average price target of analysts is $43.67.
The Fresh Market (TFM) – Sells a number of perishable products and prepared foods at its 113 stores. Stats: P/E 30.1, Price-to-sales 1.45, trades 39% below its all-time high
WhiteWave Foods (WWAV) – Spun off from Dean Foods, the company focuses on plant-based foods and beverage as well as dairy products. Stats: P/E 21.8, Price-to-sales 1.34, shares are down 5% since IPO.
United Natural Foods (UNFI) – Distributes a number of organic and specialty food brands. Stats: P/E 24.60, Price-to-sales 0.43, trades 19.7% below its 52-week high as revenue growth trends have slowed.
Waiting for the IPO
Trader Joe’s (Private) – The chain has the highest sales per square foot of any grocer in the U.S. and an immense private label business.
Chobani (Private) – The leading player in the Greek yogurt segment and one of Fast Company’s 50 Most Innovative Companies of 2012. Sales at Chobani have skyrocketed from $60M to over $1.5B in less than four years. What to watch: Chobani could be a target of a larger food company wanting to buy its way into organic.
Posted: February 21st, 2013 | Author: Clark Schultz
Forget about all that talk of dividends, buybacks, and preferred shares – Apple should step up and buy Disney. It’s not a an original idea, but it’s a relevant topic with the Apple growth engine sputtering just a bit.
The combination of Marvel Comics, Star Wars, classic Disney films, Pixar, Touchstone, ESPN, ABC and more make the House of Mouse a content factory which can’t be found anywhere else with the possible exception of Sony and Time Warner. Of the three, Disney has the properties with the most potential as the Avengers and Star Wars franchises look set to explode and ESPN is a ratings and advertising juggernaut.
2. Theme Parks spinoff
Though Apple is sitting on a pile of cash that exceeds the GDP of most countries, an acquisition of Disney would still be expensive (market cap + 20% premium = $116B). A spinoff of the Theme Parks segment would reward investors with an attractive dividend-payer to complement their tech/media holding.
3. Cord cutting/Apple TV
If any company could pull off the trick of taking cord-cutting mainstream if would be an Apple-Disney combination. Could you live with a TV that streamed ESPN, ABC, Netflix and any shows/movies you wanted through iTunes which would also allow you to cut out the obligatory Dish Network/Comcast/Time Warner/Verizon/DirecTV/Charter provider contract? Hmmm.
4. Disney Interactive
This is the wildcard in the mix. Currently it’s just a unit which distributes multi-platform video games and global interactive entertainment, but Disney Interactive has the potential to totally disrupt the gaming market with the arsenal of franchise characters it has at its disposal. By all accounts, the business could use a fresh infusion of creativity and talent. Surely Apple could pitch in here.
Will it happen? Probably not. Would Disney’s board even approve a buyout? Probably not. But with the Steve Jobs estate owning 8% of the company’s stock maybe the idea doesn’t get tossed off the board’s agenda entirely.
Via Bloomberg, Seeking Alpha, CNBC
Posted: February 17th, 2013 | Author: Clark Schultz
Margin pain on the menu: Restaurants could get squeezed this year from a combination of higher commodity costs and frugal consumers. Though traffic is forecast to rise 3%, the average ticket is expected to decline 4.7% with coupons, promotions, and discounts gaining favor. Chains that are expected to ride out the expected tough environment are those that can deliver healthy food fast. Chipotle (CMG), privately-held Subway, and Panera Bread (PNRA) fit the bill.
Stocks to watch: McDonald’s (MCD), Jack-in-the-Box (JACK), Sonic (SONC), Cracker Barrel (CBRL), Buffalo Wild Wings (BWLD), Wendy’s (WEN), Burger King (BKW), Chili’s & Macaroni Grill (EAT), IHOP and Applebee’s (DIN), Ruby Tuesday (RT), and Bob Evans (BOBE).
Via Reuters and Seeking Alpha.
Posted: January 11th, 2013 | Author: Clark Schultz
Anheuser-Busch InBev will introduce two beers this year with 6% alcoholic content – compared to the 5% average of its leading brands – after last year’s launch of higher-alcohol Bud Light Platinum went well. The key question from analysts over the strategy is whether the new beers – Beck’s Sapphire and Budweiser Black Crown – will steal store shelf space from rivals or cannibalize other A-B products?
State of the Industry:
Beer shipments in the U.S. rose around 1.9% in 2012 after falling in 2011. Though craft beer sales only account for 6% of the market by volume, the double-digit pace of growth from craft brewers easily outpaces major players A-B InBev, MillerCoors, Heineken, and Boston Beer Co. Latin America and China will be a focus in 2013 as will the ripple effect of the Grupo Modelo purchase by A-B InBev.
Beer stock performance (52-week return)
Anheuser-Busch InBev (BUD) +44.8%
Boston Beer (SAM) +36.5%
Diageo (DEO) +34.6%
Craft Brew Alliance +11.0%
SABMiller (SBMRY) +1.90%
Molson Coors (TAP) -4.91%
Yields on beer stocks
Molson Coors (TAP) +3.00%
Diageo (DEO) +2.39%
SABMiller (SBMRY) +1.90%
Anheuser-Busch InBev (BUD) 1.78%
Boston Beer (SAM) 0.00%
Craft Brew Alliance 0.00%
The leading brands of the major beer companies:
Anheuser-Busch InBev (BUD) – Budweiser family, Michelob, Busch, Rolling Rock, Natural
Boston Beer (SAM) – Samuel Adams: Boston Lager, Boston Ale, Black Lager, Irish Red.
Diageo (DEO) – Guinness, Red Stripe, Kilkenny, Tusker.
Craft Brew Alliance (BREW) – Redhook, Kona, Widmer Brothers, Omission
Molson Coors (TAP) – Coors Light, Blue Moon, Carling, Miller Lite, Miller High Life Molson, Keystone Light, Amstel Light, Killian’s Irish Red.
SABMiller (SBMRY) – Grolsch, Fosters, Carling Black Label, Icehouse, + Miller family under joint venture with Molson Coors
Via St Louis Post Dispatch, Seeking Alpha, Google Finance
Posted: January 4th, 2013 | Author: Clark Schultz
Disney filed a patent application that has tech and media sites buzzing with speculation. The patent covers a process to animate real videos or pictures to create an augmented reality when viewed with an enabled device. Not only are enthusiasts drooling that the move could be the first step to Disney’s mythic Toy Box gaming console, they are also quick to note the cozy relationship Disney has with another company potentially looking to dip into the gaming market – Apple.
Full speed ahead for the House of Mouse.
Via CNET.com, U.S. Patent & Trademark Office, Seeking Alpha
Posted: December 22nd, 2012 | Author: Clark Schultz
Do-it-yourself investors have more online tools than ever to help motivate them to ditch their stock broker or financial planner. Listed below are some of the best financial websites on the web – in some cases a bit below the radar – to bookmark and use in 2013.
A portfolio manager that goes beyond using algorithms to make portfolio recommendations by utilizing curated user-generated content, while still beating the other financial portals at the basics.
Website: www.wikinvest.com Twitter: @Wikinvest
An open source platform for matching wits with other traders on earnings numbers. A great way to test theories or jump on the bandwagon with members able to consistently beat sell-side analysts.
Website: www.estimize.com Twitter: @Estimize
The quickest way to cut through all the Fedspeak, rampant economic analysis, and stock market shenaningans. According to ZH, “on a long enough timeline the survival rate for everyone drops to zero.
Website: www.zerohedge.com Twitter: @ZeroHedge
A slick way to keep tabs on start-ups and emerging private technology companues.
Website: www.momentumindex.com Twitter: @MomentumIndex
Though a larger player than the rest of the names on this list, this website contains a wealth of information on real estate and mortgages to help make intelligent financial decisions. No need for a mortgage broker if Zillow is utilized correctly.
Website: www.zillow.com Twitter: @Zillow
More to watch:
Simple – A true virtual bank with cutting edge web and mobile applications. Funds held at FDIC-insured partner bank.
dealReporter – Market intelligence and breaking stories without the Bloomberg terminal.
SumZero – The collective wisdom of the hedge fund community curated online.
SmartyPig – The best online source for setting up a social savings account. 1% on savings and cash back offers as high as 11%. Funds FDIC-insured.
Seeking Alpha – Live stock market news and analysis.
MoneyRates – Updated rates on bank deposit products and personal finance advice.
Jemstep – Real-time portfolio analysis and recommendations with a cleaner platform than rivals. Still in beta, but one to watch.
Loyal3 – Buy stock directly from companies for as little as $10.Quick, clean, and note for a true buy-and-hold investor looking to make it hard to sell off a knee-jerk reaction to news or sentiment.
SavingsFive.com – A quick list of the best savings rates and ideas. A real time saver.
Insider Monkey – Rich, edgy analysis on what the insiders are doing with their money.
Posted: December 13th, 2012 | Author: Clark Schultz
Facebook bought Instagram for $1B in stock (now $715M) in a costly move for a property with no revenue. The bull case: Analysts thinks the mobile app can generate between $500M to $700M over the next three years to pay for the deal quite neatly. The bear case: Instagram is a fad for 14-year old girls lacking significant purchasing power. Just watch this video and see if a cool billion seems right:
Sources: CNET.com, CollegeHumor.com, Bloomberg