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Monthly Archives: May 2016

Mondelez to create more apps, online videos in advertising shift @Redbull @BuzzFeed @MDLZ @PepsiCo $MDLZ $PEP #ConnectedSociety

Mondelez to create more apps, online videos in advertising shift @Redbull @BuzzFeed @MDLZ @PepsiCo $MDLZ $PEP #ConnectedSociety

When a brand as trusted (and as yummy) as Oreo moves shifts gears to online and mobile as well as apps because traditional advertising isn’t getting it done…. kinda tells you something. To us its more Content is King and Connected Society at work. 

Massive disruption in the ad industry prompted Mondelez to switch gears as audiences have become more difficult and expensive to reach, Henderson said. “Advertising is no longer a huge part of the content consumption experience.”

Source: Mondelez to create more apps, online videos in advertising shift | Reuters

Abercrombie’s Sales Slip as Fewer Shoppers Visit Its Stores – WSJ

Abercrombie’s Sales Slip as Fewer Shoppers Visit Its Stores – WSJ

This story on Abercrombie & Fitch Co. provides yet another confirming datapoint in our Connected Society thematic and the transformation of the American-style mall, which is helping to drive our Content is King thematic as well.

Here are just a couple of excerpts . . .

Executive Chairman Arthur Martinez attributed the decline to “traffic headwinds, particularly in international markets and in our U.S. flagship and tourist stores.”

 

Same-store sales are expected to remain challenged in the second quarter and improve in the second half of the year.
Abercrombie has been hit hard by changing consumer preferences, declining mall traffic and fierce competition from fast-fashion players . . .

 

Abercrombie joins a growing list of retailers reporting a weak start to the year. Poor results at department stores and specialty retailers have illustrated consumers’ shift away from brick-and-mortar stores. . .

 

“The traffic situation is a systemic problem for the industry,” said Mr. Martinez. “Our job is to make the most of the traffic we do get.”  He said Abercrombie hasn’t ruled out the option of selling merchandise on Amazon. “As our brands come back to their status and health, we will be looking for additional channels to take our products,” he said.

Source: Abercrombie’s Sales Slip as Fewer Shoppers Visit Its Stores – WSJ

Taking the plunge with this core Connected Society holding

Taking the plunge with this core Connected Society holding

Earlier this week, in the Monday Morning Kickoff, we shared expectations for a much more subdued week, with only a few key economic data points and a slower speed of earnings reports. Talk about not getting what you expect.

Once again we’ve got conflicting views on whether the Fed will hike interest rates in June. We also saw the continued strengthening of the US dollar, and on the back of a greater than expected inventory drawdown, oil prices are nearing $50 a barrel. Combined with the late week rally we saw last week that snapped the prior 3-week losing streak in the market, the S&P 500 is up more than 2 percent over the last few days.

In this week’s edition of Tematica Investing:
  • The ping-pong game over the Fed potentially boosting rates as soon as June continues this week. We will continue to digest data and position theTematica Select List accordingly, balancing the renewed market melt up that has only served to stretch valuations. Read More >>
  • We are adding Amazon (AMZN) shares to the Tematica Select List given its pole position in our Connected Society investment theme, and note the company is also benefiting from Cash Strapped Consumer and other thematic tailwinds. Our price target is $880, and for now we will hold off with a stop loss as we look to use any weakness to scale into this core Connected Society holding. Read More >>
  • This week’s Ask Tematica focuses on whether the US economy is indeed at full employment. Read More >>
  • Rounding out the issue is Thematic Signals, which shows that once again there is no shortage of confirming data points for our thematic investing perspective. Read More >>

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FORBES: Music Publishers Continue To Seek Handouts Despite DOJ Sanctions

FORBES: Music Publishers Continue To Seek Handouts Despite DOJ Sanctions

The accessibility of music driven by the digital revolution has enabled music to pervade consumers lives more than ever. With services from Pandora , iHeartMedia , Sirius XM Radio SIRI -0.37%, Apple AAPL +0.24% and Spotify, people enjoy music in places and ways never imagined just a few short years ago. For artists, the revolution has brought new platforms to reach hundreds of millions of consumers in unprecedented ways. Scope and scale to use consulting industry lexicon.

Yet these advances seem to be under perpetual threat from big corporate interests seeking to hang on to the days when they and their allies in government held all the cards in a rigged deck.  Recently, I highlighted one such threat posed by the efforts of music publishing corporations and Performance Rights Organizations (PRO) to break free of decades old settlements with the Department of Justice known as “Consent Decrees.”

Read More  >>

Remaining loyal to our disciplined and thematic approach

Remaining loyal to our disciplined and thematic approach

The market move has turned more bearish of late, and we are not surprised Wall Street has adopted the more cautious stance we’ve had these last several weeks. A headline freak out on the April CPI report shows us just how nervous the stock market is these days. We’ll continue to be disciplined when contemplating adding each new position to the Tematica Select List.

In this week’s edition of Tematica Investing:

  • Just doing it with Nike shares. We are issuing a BUY on Nike (NKE) shares with a price target of $66. Because this is an initial recommendation we are holding off with a commensurate stop loss, as we intend to build this position size over time. We would be buyers of Nike up to $59. Read More >>
  • Remaining patient with Costco Wholesale (COST) shares
  • Adding share of EPR Properties (EPR), a Content is King company to the Tematica Contender List. Read More >>
  • Quick Updates on AT&T (T), PetMeds Express (PETS), Regal Entertainment Group (RGC) and Disney (DIS). Read More >>
  • This week’s Ask Tematica focuses on choosing between two different share classes.
  • As promised Thematic Signals returns this week, and there is no shortage of confirming data points for our thematic investing themes. Read More >>

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Brexit Vote, the Fed, Slowing Growth, Trump and Clinton . . . Oh My Says the Stock Market!

Brexit Vote, the Fed, Slowing Growth, Trump and Clinton . . . Oh My Says the Stock Market!

Currently, we are dealing with a market that is seesawing around as it attempts to come to grips with slowing growth expectations, even though oil prices have continued to inch higher. But even more uncertainty is on the horizon. Looking ahead, there are a growing number of unknowns in the market, ranging from:

  • The Brexit vote
  • Prospects of the Fed boosting rates in June
  • Aggressive growth expectations in the back half of 2016
  • And the chaos of the 2016 presidential election

Taken alone, any one of these uncertainties is enough to jostle the market around. When combined, they have enough boom to take the wind out of the sails of the recent market rally. As the stock market remains choppy, with mounting uncertainties to be had, we continue to follow our thematic strategy, adding positions prudently only when the time is right.

In this week’s edition of Tematica Investing:

  • We are issuing a Buy on Foods with Integrity play Chipotle Mexican Grill (CMG), taking the shares off the Contender list and placing them on the Tematica Select List with a $550 price target and a $390 stop loss. Read More
  • We are doubling down on Disney (DIS) shares following a solid quarter earnings report that show’s the strength underlying this Content is King company. Our price target remains $125. Read More
  • Keeping tabs on Costco Wholesale (COST) shares, with an eye to add more near $140.Read More
  • Ask Tematica: This week’s question is about buybacks. Yes, they help improve EPS comparisons, but there is a deeper dark side to these programs that we as investors must we aware of. Read More

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As earnings kick into 5th gear expected volatility has us on sidelines, for now

As earnings kick into 5th gear expected volatility has us on sidelines, for now

We are waist deep in March quarter earnings with more than 1,400 companies reporting this week — a 40% increase compared to last week. Mixed in that horde are 124 S&P 500 companies (including 2 DJIA components) reporting. By the end of the week that will mean 87% of the S&P 500 group of companies will have reported March quarter results. 

As we’ve shared with you thus far, overall earnings expectations for the S&P 500 group of companies has continued to trend lower since the end of 3Q 2015. The expected volatility has us on the sidelines from jumping on new positions . . . for now. But that doesn’t mean we’re not busy sharpening our pencils and getting ready for the right opportunity. 

In this week’s edition of Tematica Investing:

  • Ahead of its May 9 earnings report, we are adding online pet pharmacy Petmed Express (PETS) to the Tematica Contender List. 
  • Regal Entertainment (RGC) rides the strong movie box office to beat earnings expectations.
  • A Tematica Investing subscriber question opens the door for Amazon (AMZN) shares.
  • We’ve got the latest thematic supporting data points that ripped from the headlines around us.
  • What did we enjoy this week? The Big Green Egg of course.

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