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Posted
Apr 23 2008, 11:03 AM
by
Anthony Mirhaydari
Rating:
Yesterday's miserable existing home sales data did little to change perceptions that the housing sector is accelerating its slide down the slippery slope of broken dreams, falling prices, and bloated inventories. Investors have rightly punished the shares of those involved in the financing, building, renovating, and furnishing of American homes.
But they've also inflicted collateral damage to companies that help maintain homes, grouping them in the same category as home-improvement stocks suffering from a drop-off in remodeling activity -- a distinction that leads to two lucrative trading ideas:
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Posted
Apr 18 2008, 01:05 PM
by
Robert Walberg
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Hard to believe but there's actually something uglier than Crocs' shoes -- the performance of its stock. This one-time fave of momentum traders has seen its share price plunge by 86% over the last six months alone. The most recent bloodbath came earlier this week when the company guided sales and earnings estimates sharply lower.
For investors the question is simple -- were Crocs merely a fad, or is the company and the brand merely experiencing some very nasty growing pains? How you answer that question will determine if you think the freefall represents an interesting long-term growth opportunity, or if there's simply more room to short the stock on its way to fad junk heap along with Snapple, Krispy Kreme and Zubaz (no they aren't making a comeback!!).
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Posted
Apr 10 2008, 09:44 AM
by
Anthony Mirhaydari
Rating:
Pity Howard Shultz. Even after retaking the reins of his global latté-brewing behemoth, vowing to return the company to its roots and launching a six-point plan of attack, his Starbucks shares continue their sickening slide. With this week's launch of the new Pike Place Roast, he's now busily touting efforts to "reinvent brewed coffee across America." Unfortunately, brewed coffee isn’t exciting, and with a much lower-selling price than Starbucks' espresso-based drinks, its promotion will surely erode margins.
The other growth initiatives are similarly lackluster: New coffee machines, a customer rewards program, a stronger focus on environmental initiatives, and a dedicated web portal to accept new ideas from anyone who cares. The last smacks of desperation. So, being a native Seattleite, I feel obligated to offer a simple, four-point rescue plan:
1. Stop focusing exclusively on coffee: Yes, Starbucks needs to do everything it can to improve its image as a purveyor of premium coffee. The move towards pre-ground beans and automatic espresso makers left it vulnerable. This is especially true now that McDonald’s and others are offering vastly improved and in some cases superior coffee, mitigating the company’s claims to quality.
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Posted
Apr 09 2008, 11:08 AM
by
Kim Peterson
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Walk into the Circuit City in my town, and you'll suddenly get a strange sensation. Look around...you're the only person there. Wait, someone must work here. Hello? Anyone? Then head over to Best Buy, which is packed with customers and ringing up sales.
Why is Circuit City struggling while Best Buy shines? There are many reasons: prices, marketing and sales strategy top the list. Look at the stock prices of the two: Circuit City shares have fallen from nearly $19 a year ago to $4.30 today, while Best Buy shares have stayed in the $40 to $50 range all year.
Circuit City might see some big changes soon. BusinessWeek reports that the retailer may have hired Goldman Sachs to look into sale possibilities. This comes after the company's turnaround plan has failed. Analysts say one of the worst decisions executives made was to fire 3,400 of the most experienced workers and replace them with lower-paid ones, according to Business Week. Customer service went out the window.
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Posted
Apr 03 2008, 12:32 PM
by
Kim Peterson
Rating:
Apple has become the top music seller in the U.S. The company made the announcement today after Ars Technica leaked an internal e-mail with details. Just a couple of months ago, Apple passed Best Buy to become the #2 music retailer. Now, the company is topping the charts.
Apple had 19% of the market in January, and Wal-Mart was in second place with 15%, according to the leaked e-mail. It's worth noting an obvious difference between the two: Apple is an all-digital music seller, while most of Wal-Mart's sales are physical CDs. Best Buy, Amazon and Target rounded out the top five spots. Some tech blogs thought that January's numbers were skewed due to people redeeming iTunes gift cards recieved over the holidays. But it looks like Apple stayed on top in February as well.
Shares of the company rose nearly 3% today to close at $151.61. Here's what others had to say about the news:
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Posted
Apr 02 2008, 08:34 AM
by
Anthony Mirhaydari
Rating:
After fighting all the way to the Supreme Court, retailing behemoth Wal-Mart announced yesterday it would drop its claim to the settlement a former employee received after a horrific traffic accident. The change of heart came just as the funds, all $270,000 that remained, were being prepped for transfer to the company’s coffers. Unfortunately, it comes way too late to save any shred of goodwill in the minds of consumers.
The case involves 52-year-old Deborah Shank, who worked as a night-shift shelf stocker until a run-in with a tractor-trailer left her permanently brain-damaged and wheelchair bound. Although the story has been in and out of the news since December, things picked up when Wal-Mart won its suit against the family a few weeks ago.
This spurred MSNBC’s Keith Olbermann to award the company his “Worst Person in the World” award for four straight nights—starting with this tirade last Thursday. The blogosphere absolutely erupted over the story’s injustice. No wonder, given that this stokes all those passionate anti-corporatism and anti-globalization feelings bloggers often harbor.
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Posted
Mar 21 2008, 12:26 PM
by
Robert Walberg
Rating:
Perhaps David Batchelder, a director of Home Depot, was inspired by the Easter theme of the resurrection when he decided earlier this week to spend more than $28 million to purchase 1.1 million shares of the home improvement retailer's stock. Batchelder now owns 1.9% of Home Depot. Not surprisingly news of the transaction sent shares of the beleaguered retailer sharply higher in Thursday's trading.
But should you follow the lead of this insider and start accumulating Home Depot stock? Investors often perceive insider buying as a strong (re)entry signal for beaten down stocks. Home Depot definitely fits that description, as the company has seen its share price tumble by 27% over the past year. Nevertheless, there is no reason to hurry back into the stock -- despite the bold action taken by Mr. Batchelder.
First of all, the housing market isn't getting any better as evidenced by the weakness in the most recent housing starts data. Fewer homes being built means less commercial business for granite countertops, kitchen cabinets, floor tile, etc. Meanwhile, the lifeblood of home remodeling projects -- home equity loans -- are increasingly difficult to come by these days. Toss in the slumping economy and reduced consumer spending into the mix and it's safe to assume that the pace of remodeling efforts will remain slow for the balance of 2008 and into 2009.
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Posted
Mar 21 2008, 11:20 AM
by
Anthony Mirhaydari
Rating:
Conventional wisdom says McDonald’s should continue to have great success as the economy slows and consumers trade down restaurants just as they’ve been trading down to Wal-Mart for their shopping needs. Sounds great, except that the company's insiders beg to differ: Over the last six months, nearly 760,000 shares worth some $43 million have been sold.
A significant amount by any measure, this works out to roughly a 20% liquidation of the insiders according to Thomson Financial. CEO James Skinner sold 35% of his stake. Gloria Santona, the general counsel, parted with more than half of her shares. Jose Armario, responsible for Canada and Latin America, traded away 80% of his holdings.
My guess is that they’re less than confident about the big McCafé push. Better drip coffee is one thing, and McDonald’s definitely has good drip coffee. But going head-to-head with Starbucks is another. Don’t kid yourself: McDonald’s will never be Starbucks -- and by the look of things it probably doesn’t want to be Starbucks anyway. There just isn’t any synergy between burgers, fries, and cappuccinos.
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Posted
Mar 19 2008, 09:32 AM
by
Anthony Mirhaydari
Rating:
The real reason Wall Street is downright giddy over the historic $18 billion Visa IPO this morning isn’t because the banks that own it are in for a big payday or that it represents a safe haven in a time of market turmoil. Instead, investors want to profit from the slow death of physical money. Cash is no longer king; Long live the charge card!
Already, a majority of retail transactions are done with a card instead of cash. This is up from less than 30% a decade ago. People love the convenience: Visa estimates that contactless card transactions are twice as fast as cash. For all their complaining about interchange fees, retailers love the fact people tend to spend 20% more when using plastic. Americans alone now possess some 1.5 billion credit cards.
The demise of paper notes and coins will only continue. The last refuge of cash has been small transactions like paying a bus fare. Now, even this is threatened. Interchange rates continue to fall. Card terminals are becoming less expensive and more ubiquitous. It’s only a matter of time before just about any purchase can be settled electronically.
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Posted
Mar 17 2008, 09:10 AM
by
Anthony Mirhaydari
Rating:
Women have long squeezed, squished, and shimmied into sculpting undergarments. From corsets to pushups bras, all manners of implements have been used to defy gravity and genetics. Well ladies, the injustice is over: It’s the men’s turn now.
The front page of Saturday’s Wall Street Journal (subscription required) prominently featured a story on how today’s man is embracing body-enhancing underwear. Easing the transition has been the popularity of compression shorts and snug-fit athletic gear amongst professional athletes. Plus, the latest fashions out of Europe emphasize slim cuts. From “waist eliminators” to “support boxers,” men are becoming much more open to the idea of strategically placed elastics in their boxers and briefs.
Although U.S. sales of women’s intimates still outpaces that of men’s, at $1.5 billion to $1.1 billion respectively according to the NPD Group, the men are quickly catching up. Last year, men’s sales increased 7.8% versus a meager 2.3% for the women.
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