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Fang

How close are Google and China?

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Let’s put it this way… not close at all. Okay, that is not the cleverest wording, but at least you get the point. Google CEO Sundar Pichai announced that the company is nowhere close to launching a censored app for China. This is the first time we have heard a peep from Google since reports that a censored search engine was something the company may be working toward.

 

It could never happen… because Google may not be open to creating a censored app for China. However, they are in the “exploration stage” and are seeing if this is even doable. The website would need to comply with Chinese government censorship, which is unfortunate for those that live in China because I don’t think any of us could imagine life without Google.

 

As you can imagine… China represents a massive market for Google that cannot be ignored. At the same time, Google would look hypocritical agreeing to censored terms when the company advocates for free and open internet. But, then again, the amount of money at stake would get many to change their tune…

Mid caps

Will BodyArmor become the new hangover beverage of choice?

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Coke or Pepsi… which do you prefer? Well, now there is a less senseless debate you can participate in – Gatorade or BodyArmor? The clear choice [to me] is Gatorade. However, Pepsi is joined with Gatorade, and Coca-Cola just became the second-largest shareholder in BodyArmor. The third largest shareholder is Kobe Bryant. Good enough for Kobe? Now I am listening…

 

With their list of shareholders… it is possible that BodyArmor is going to become a player in the sports drink industry. The US market has been dominated by Gatorade forever, and they hold about 75% of the $8 billion market. It is possible we are all ready for a change.

 

Coca-Cola is already friends with… Mike Repole, BodyArmor’s largest shareholder. Repole co-founded Smartwater and Vitamin Water which were both purchased by Coke. We don’t know what Coke paid for this, but it was probably a lot. However, we do know that BodyArmor will remain its own brand and utilize Coca-Cola’s bottling facilities. It’s about time Gatorade saw some competition.

Mid caps

JCPenney is edging closer to trading for an actual ‘penny’

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Okay, okay… they’re still trading for $2 per share, but that is pretty frickin’ crappy for a company that was once at the top of the retail game. However, the company hit a new all-time low after releasing earnings on Thursday, as the stock dropped 25% – below $2 per share. Stores are closing, sales are dropping, and the CEO is missing-in-action (actually they don’t have one). Getting a CEO is tops on JCPenney’s to-do list because companies need one of those.

 

See what Amazon is doing… JCPenney should do more of that. Oh wait, it actually may be too late to jump on that bandwagon. Companies like Walmart and Best Buy have poured money into digital operations, and their investments are paying dividends.

 

Here’s what they will do… the company will also be focusing on women’s and children’s apparel which were the company’s top-selling categories in the second quarter. JCPenney will follow the money and purchase inventory as-needed to follow sales trends. However, the situation is dire – look at the earnings of other retailers. If JCPenney can’t make money when the economy is set to ‘easy mode’ for retailers, what will it take?

Blue Chip

Corona’s massive “growth” opportunity

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You want more than booze and beer… and Corona wants to make sure you are getting that. Constellation Brands, the maker of Corona, is dropping $4 billion to increase its stake in Canopy Growth, a marijuana company. Their stake increased from 10% to 38%, and they still have the option to purchase a controlling share of over 50%.

 

Good news for Canopy… because this news sent shares upward by 25%. And yes, this is a legit company listed on the New York Stock Exchange – not just a guy that grows in his backyard shed. However, shares of Constellation Brands were down 6% following the announcement. Nevertheless, Constellation CEO Rob Sands sees this deal as possibly the company’s “most significant growth opportunity” over the next decade (pun intended?).

 

Not just for smoking… and Constellation will be looking to launch cannabis-based alcoholic beverages. Canopy Growth CEO Bruce Linton envisions cannabis, no-calorie drinks that can fight depression – so a drink that makes you skinny and happy. Regardless, it is widely anticipated that marijuana will eventually be legalized in the United States. With this expectation, Constellation and Canopy will be getting to work now to fuel our bad habits later..

snoop dog

Blue Chip

Now you CAN have breakfast at Tiffany’s

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Tiffany’s is changing things up… and spending millions to renovate its flagship store in New York City. The purpose of this renovation is to appeal to the younger crowd of customers – mostly millennials. Getting millennials in the door is essential, of course, because many of them are at the age where people get married and can sorta, kinda, but not really, afford an engagement ring from Tiffany.

 

You can also have breakfast at Tiffany’s… because last year, the company opened up the Blue Box Café. The restaurant is on the fourth floor of the 10-story flagship store. The café has been a big hit – and probably elicits at least one IG post per visit.

 

Fitting in with the youngins… is working for Tiffany and the company’s stock is up 25% this year. Investors are enjoying the renovations, restaurant, and endorsements by young stars like A$AP Ferg. However, we’ll have to wait until 2021 for the flagship store to be ready – but the anticipation is killing us!

Mid caps

Chipotle is fixing their people

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Here is how Chipotle will fix… poisoning their customers in hoards. CEO Brian Niccol announced that the company will be retraining every Chipotle employee on food safety. If you are wondering how many people will be receiving this training, it is in the ballpark of 70,000.

 

Food safety will be on the final exam… because Chipotle will also be testing employees to make sure they know what they need to know. This is good news because in 2016 the company quietly shut down all stores for a few hours to talk about food safety. In 2018, rather than a short discussion, employees will be trained not to poison you.

 

A zero-tolerance policy… is what Niccol is instituting and that may be the company’s only option at this point. The policy means employees that do not follow food safety standards will be terminated immediately. And if you are a real risk-taker, consider visiting Chipotle once again – we hear that the company has added bacon and nachos to the menu. Also, please let us know how you are feeling

Mid caps

Nordstrom is raking in the ‘racks’

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Since everyone gets compared to Amazon… here is another Seattle-based company that can move merch online. That company is Nordstrom, and their second-quarter results beat Wall Street expectation by a long shot. Online sales led the surge and accounted for one-third of the company’s overall sales. Overall, digital sales were up 23%.

 

Everything is going great… because online sales are booming and brick-and-mortar sales are also doing well on their own. Overall revenue for the retailer jumped more than 7%. These results are worth bragging about, and the company must be happy that they decided against going private last March. After the earnings release, shares of Nordstrom were up 10% in after-hours trading.

 

Here’s how everyone else is doing… including Macy’s which had lackluster sales growth and brought Nordstrom down with them after the announcement. However, similar to Nordstrom, Walmart reported strong digital growth. Is it possible that digital sales and brick-and-mortar presence are the paths to the promise land?

Blue Chip

Kroger is really going to China

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Now that they’re doing online groceries… Kroger wants to be in China’s online grocery market, too. The company will start by selling its Simple Truth-brand products on Alibaba’s Tmall Global site. FYI, Tmall is Alibaba’s e-commerce platform for foreign brands. And yes, I said ‘FYI’ like a smug douchebag – but I promise, I didn’t know what Tmall was either.

 

Expanding is excellent for Kroger… because now, not only is Kroger expanding their online presence, they will also be going overseas for the first time.  Thanks to technology, companies like Kroger no longer need a physical presence to have a presence in China or any other coveted markets. Expanding to a new market should better allow them to compete with the likes of Amazon and Walmart in the never-ending war of online groceries.

 

Joining forces with Alibaba… gives Kroger access to China’s massive markets. However, Kroger is not the first to get this idea – we have seen companies like Starbucks and Walmart do similar things. It looks like North America is old news…just kidding, we are still a huge deal to everyone who is anyone (am I right!?).

Fang

Some alternative stocks to sink your ‘FAANGs’ into

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FAANG stocks are all good bets… and they include Facebook, Amazon, Apple, Netflix, and Google, in case you didn’t know. And although these stocks have been getting hammered lately, they will probably be okay in the long run. However, there is life outside of FAANG people…including small and mid-cap stocks which include promising future technologies like artificial intelligence and self-driving cars.

 

Also, if you can stomach crypto… maybe you should consider buying now while the price is far below its $20,000 glory days. Blockchain technology could have an impact on business for many years to come. Although cryptocurrency may be going through a rough patch, you can’t introduce a new currency and expect a seamless transition.

 

Think about Tesla… because Elon Musk doesn’t seem to be joking about taking his company private. Moreover, the $420 per share price tag seems like a good deal for whoever will ultimately provide the funding. Just a few ideas to get you out of the FAANG bandwagon.

IA

Start-up

This company is doing ‘Uber’ well

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Uber killed it… in the second quarter. The ride-share company’s quarterly revenue was up 63% compared to last year. Gross bookings also increased by 41% to nearly $12 billion. With such an impressive rate of growth, it is no wonder why this private company continues to release results when they are not even required to.

 

Investing in the future… and in case you haven’t noticed, the company is moving way beyond cars. Uber is delving into the bike-share and scooter-share markets, as well. The company also operates UberEATS and is investing heavily in the Middle East and India.

 

Pay attention closely… because Uber could be going public as soon as 2019 and begin profit-sharing for the first time. However, for everything great the company is doing, they still have their fair share of issues. These issues include regulatory hurdles, such as New York City limiting the number of ride-share vehicles allowed in the city. Why does the “man” always gotta bring us down?