Sunday, August 20, 2017 - 2:04pm
Public Domain

Analyzing the second-quarter reporting season, Wells Fargo said in a note last week that earnings and revenue beats have outpaced earnings and revenue misses.

The deduction came after 92 percent of the S&P 500 reported earnings, with the percentage going up to 94 percent if market cap was considered.

The analysis showed that the aggregate S&P 500 earnings per share surprise was 4.7 percent and the aggregate S&P 500 sales surprise was 0.9 percent.

The number of S&P 500 companies that reported EPS outperformance was 359, compared to 99 that missed expectations. Likewise, 313 S&P 500 companies beat sales estimates compared to 146 that trailed expectations.

See Also: Terms Of The Trade: Earnings Per Share

Underperforming Irrespective Of Beats/Misses

Wells Fargo noted that those companies which reported EPS beats underperformed the market (taking the S&P 500 Index as proxy) by 0.28 percent. Those reporting sales beats underperformed the market by a mere 0.07 percent.

However, companies reporting earnings misses underperformed the market by 1.78 percent compared to a 1.67 percent pullback by companies reporting sales misses.

Analyst Christopher Harvey said three days after the earnings release, companies reporting an EPS beat underperformed the market by 0.31 percent and those reporting sales beat underperformed by 0.09 percent.

Sector-Wise EPS Surprises

The biggest positive EPS surprise was posted by the IT sector, with the surprise percentage at 7.8 percent. Among the other outperformers were Healthcare (6.2 percent), Materials (4.6 percent), Consumer Discretionary (4.5 percent) and Telecom services (4 percent).

On the other hand, the energy sector posted a 2.9 percent negative surprise, with 18 S&P 500 companies belonging to the sector reporting positive surprises, while 14 reported negative surprises.

See Also: Terms Of The Trade: Market Cap

Benign Estimate Revisions

Wells Fargo noted that second-quarter S&P 500 EPS estimate has been revised down merely 0.6 percent in the quarter-to-date period and lowered by 4.5 percent in the quarter-to-date period.

Meanwhile, the 2017 annual S&P 500 EPS estimate has been upwardly revised by 0.4 percent in the quarter-to-date period but trimmed by 0.4 percent in the year-to-date period.

The energy sector had the largest downward revision to its annual EPS estimate for the quarter-to-date period, down 12.7 percent. For the year-to-date period, the revision was a steeper 17.5 percent.


Sunday, August 20, 2017 - 11:25am
Public Domain

That key cog in the supply chain, the trucking industry, is bracing for slowdowns as people pack the highways to watch the first coast-to-coast solar eclipse since 1962.

The trade journal Transport Topics matched up the states seeing the totality of the eclipse with interstates used for commerce via trucking, and expressed serious concern. This is a rare case when a cosmic event, however briefly, threatens a key component of distribution already coping with enormous change.

“Several states have adjusted their freight transportation schedules to avoid the influx of traffic bound to snarl the nation’s highways as people descend on the best viewing spots for the upcoming solar eclipse,” the trucking journal said.

Supply Chain Has Enough Issues As It Is

Trucking is integral to the chain of distribution that gets a product from some sweatshop in Taipei to the click-and-buy consumer of today.

Entrepreneur Elon Musk is among the people moving forward with self-driving trucks, part of a socio-scientific movement to take humans out of the whole vehicular equation, accelerating efficiency and eliminating the errors caused by texting and/or drunken drivers.

Supply chain disruption is even gripping old school companies such as struggling Kellogg Company (NYSE: K), which shut down its direct-to-store warehouses this year and decided to truck everything to the retailers’ distribution centers, saving millions.

The New Revolution Started In China

China began figuring out supply chain distribution a decade ago.

“You can talk about the miracle of ecommerce in China or in the world,” Jack Ma, CEO of Alibaba, said at a conference last year. “But the logistics industry is where China’s real great miracle has been over the past decade.”

And much comes down to the role that trucks play in the global equation.

Disrupting Distribution Hindered By Old Habits

Too many companies are dependent on a serpentine system of distribution that starts with overworked kids in Third World-style sweatshops and relies on the progress of DHL or United Parcel Service, Inc. (NYSE: UPS) or FedEx Corporation (NYSE: FDX) to catch up to a world that eliminates the comforting waystation of warehouses.

This is why Bill Gates and Jeff Bezos are investing millions into new distribution models like Convoy, a trucking company that aims to change the way goods get to you. In the meantime, there is a shortage of jobs in a field just waiting to be filled by robots.

What Has Changed?

The basic change in supply chain management is the fact that the consumers now dictate distribution. They want it now, they want it fast and they want it cheap.

Some companies are still learning this hard lesson, says Thomas Kull, professor of supply chain management at Arizona State University, who co-authored a study on the topic.

“Supply managers knew that customer requirements were going to be harder to predict and maintain, they saw their role as still being towards upstream supply structures and performance,” he tells Benzinga. “It is interesting they feel this way, because getting a head start on internal and external customer expectations is a great way to start building the needed supply structures.”

“The traditional ways of acting are still in place, which may be good and may be bad. We'll see.”

Related link:

Cereal Killer: Breakfast Food Makers Retool To Attract Millennials


Sunday, August 20, 2017 - 11:03am
Public Domain
  • Benzinga has featured a look at many investor favorite stocks over the past week.
  • Some of those calls focused on retail and on internet-related stocks.
  • Other calls featured a slew of smaller oil companies worth a look now.

It was a bit of a roller-coaster this past week, with all the political drama contributing to a big market sell-off on Thursday. Benzinga continues to feature looks at the prospects for many investor favorite stocks. Here are just a few of the top posts from last week, with a focus on retail, the internet and oil.

Retail

"Why Home Depot's Guidance Was 'Conservative'" by Shanthi Rexaline features a look at whether shares of big-box retailer Home Depot Inc (NYSE: HD) were hurt by guidance that was more conservative than many investors had expected, despite the solid second-quarter results. From where is continued sales growth likely to come?

In "Walmart Continues Relevancy While Other Retailers Struggle," Wayne Duggan points out that quarterly results from Wal-Mart Stores Inc (NYSE: WMT) may not have been enough to impress investors, but there were still plenty of positive takeaways from the report. Can the stock continue to grind higher from here?

Be sure to also check out Apple, Amazon, Tesla And The Changing Dynamics Of The Car Industry.

Online

Elizabeth Balboa's "Netflix To Capture ABC's Female Following With Rhimes Deal" shows how Netflix, Inc. (NASDAQ: NFLX) is fighting back after the recent announcement that Walt Disney Co (NYSE: DIS) will pull its content from the streaming service. See what this new deal with Shonda Rhimes potentially brings to Netflix.

Technology is driving growth at Alibaba Group Holding Ltd (NYSE: BABA) and strengthening its position beyond its core commerce, according to "Here's Why Baird Is Impressed With Alibaba" by Dustin Blitchok. See why this key analyst raised its price target on the stock and is recommending that investors add to positions.

Also see A Handy Guide For What The Careful CEO Should, And Shouldn't, Talk About

Energy

In Wayne Duggan's "A Batch Of Bullish Calls Just Initiated On Oil And Gas Stocks," see why at least one analyst believes now is finally the time to buy a handful of oil exploration and production stocks. Parsley Energy Inc (NYSE: PE) and RSP Permian Inc (NYSE: RSPP) are among the picks discussed.

"Imperial Initiates Coverage Of Oil & Oilfield Services Companies" by Shanthi Rexaline offers even more smaller energy plays, in this case with a focus on companies that are trimming the fat. Among the picks here are PDC Energy Inc (NASDAQ: PDCE) and Centennial Resource Development Inc (NASDAQ: CDEV).


Sunday, August 20, 2017 - 10:54am
Image: Sven (http://www.gnu.org/copyleft/fdl.html)

The retail sector can be characterized in two categories, CNBC's Jim Cramer said during his daily "Mad Money" show.

First are the retailers that Amazon.com, Inc. (NASDAQ: AMZN) can "crush." The second group consists of retailers that Amazon should at the very least admire — if not fear.

At the top of the list of companies that Amazon should fear is Wal-Mart Stores Inc (NYSE: WMT), since the online giant has a major "achilles heel" that the world's biggest retailer can capitalize on, Cramer said. Specifically, the biggest consumer product companies around may one day face a choice between doing business with Amazon's AWS cloud segment or having their products featured in Walmart's stores.

This is already happening. Amazon accused Walmart back in June of bullying its cloud clients.

"If I'm the chief technology officer of any supplier, I'm going to green-light shifting away from Amazon Web Services to the ultra-competitive Microsoft Azure or Google Web Services," Cramer said. "That way, my CEO can go to Walmart's headquarters and say, 'Hey, we know the score. We're not trading with the enemy anymore.'"

Walmart has one other major advantage over Amazon, Cramer said: Its more than 4,000 physical stores. This massive network makes it much easier for shoppers to pick up their goods in-store. Also, Walmart's footprint should be viewed as a network of "distribution centers" which will dwarf the 400 or so physical locations Amazon will take over in the Whole Foods acquisition.

Related Links:

Is Target 'Amazon-Proof'?

Steve Madden Working On A Deal With Amazon? This Analyst Thinks So

Image: Sven (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0, via Wikimedia Commons


Sunday, August 20, 2017 - 10:35am
Public Domain

Startup Angels and Techstars Mobility are hosting a workshop in Detroit Oct. 4-5 that’s intended to give both an insider’s view of startup investing and the startup climate in the Motor City.

Startup Angels, a Washington D.C.-based company designed to empower angel investors, is pairing with Techstars Mobility, a Detroit-based firm that invests in mobility-based startups and receives backing from Ford Motor Company (NYSE: F).

An 'Iconic' City

“Detroit is an iconic American city being reborn at the intersection of Detroit’s two biggest strengths: its automotive dominance and an entrepreneurial resurgence,” Ted Serbinksi, venture investor and managing director at Techstars Mobility, said in a statement.

“From self-driving cars to smart cities to reinventing logistics, startup companies around the world are coming to Detroit to work with our automotive and industrial experts and build their companies here.”

Southeast Michigan has “momentum” in its startup ecosystem, but needs early-stage investors and angel investors, Serbinski said.

The investing workshop is being held in advance of Techstars Mobility’s third annual demo day for its 2017 class of startups on Oct. 18, according to the company.

Investor Meet Startup

The concept of the Startup Angels workshop is to introduce investors to buying into tech startups, diversifying their portfolio and a guide to “choosing, managing and negotiating investments."

There’s a demand for information about startup investing across the globe, Leslie Jump, the founder and CEO of Startup Angels, said in a statement.

“We’re looking forward to being the catalyst for more startup investors in the Detroit metropolitan region — a natural community for more angel investors due to its strong startup roots and phenomenal industrial expertise.”

Speakers at the Detroit event include Jump; Serbinski; Sherwin Prior, the managing director at the General Motors Company (NYSE: GM) equity investment arm GM Ventures; Patti Glaza, the vice president and managing director at Invest Detroit; Matt Bower, partner at Varnum, LLP; TechTown Detroit Managing Director Paul Riser and Chris Thomas, founder and partner at Fontinalis Partners.

For more information, visit the Startup Angels website.

If you’re looking for cool fintech startups and access to top financial institutions, and are sick of attending stuffy corporate conferences, the Benzinga Fintech Summit is the event for you. Visit www.bzsummit.com for more details.

Connect with us on social media — use the hashtag #BZAwards and #Fintech to spread the word

Related Links:

JPMorgan Chase's $150 Million Detroit Investment: Repair, Revitalize, Reinvest

SHIFT Tech Summit In Detroit Looks At What's Next In Virtual Reality


Sunday, August 20, 2017 - 10:23am
Public Domain

U.S. Army Spc. Brian Wilhelm was stationed in the Iraqi town of Balad when a rocket-propelled grenade blew up his leg. The pain was as bad as the actual injury that would eventually claim the demolished limb.

Wilhelm was rushed to a MASH unit on the front. An Army colonel and anesthesiologist named Chester “Trip” Buckenmaier III, who had studied ground-breaking pain management techniques at Duke University, tried something different than the usual method of putting wounded soldiers on painkillers.

He administered what women who have experienced excruciating childbirths already know: a nerve-deadening, localized epidermal rather than a potentially addictive dose of morphine - named after the Greek god Morpheus - that has created a literal army of addicts since the Civil War.

The localized nerve block was the first battlefield use of a technique that Buckenmaier picked up at Duke. The colonel became a “painiac” dedicated to finding an alternative to addictive opioids that has led to an epidemic of abuse and overdoses, including a 19-percent jump in OD deaths among teens since last year.

See Also: Every Generation Has Its Drug

Colonel Blames Physicians, Drug Stores And Big Pharma

Buckenmaier is the director for the Uniformed Services University’s Defense and Veterans Center for Integrative Pain Management in Maryland -- sort of the painkiller-in-chief. He’s also a widely recognized advocate of alternative methods of pain management, which can range from nerve-deadening regional treatments to yoga to massage therapy to acupuncture.

Biofeedback and behavior modification also are essential elements in defeating chronic pain. Too much of the culture, Buckenmaier believes, is trained to have zero tolerance for pain. Sometimes, people just have to suck it up and walk it off.

The battlefield has always been a laboratory for pioneering medicine. And painkillers definitely have their place. But opioid addiction has been an issue in the U.S. military long before it became today’s headline on Main Street.

“We were recognizing a decade before the country is recognizing now that managing pain with just one drug was not the best,” says Buckenmaier. “Morphine is not bad. I would shudder to think about being deployed without it. Opioids are still part of the plan.

“When you have your leg blown off, you’re not screaming for acupuncture.”

Military Mission: Can Private Sector Be Saved?

Doctors, pharmacists and pharmaceutical companies share blame for the opioid crisis, and the illegal tangent of synthetic substitutes out on the streets, says Buckenmaier.

“I do think that there is a profit motive that is driving the current crisis,” he says. “I don’t have a profit motive. That is one of the beauties of socialized medicine, which is what the military has. Money has unfortunately corrupted the system. Military medicine can serve as a model for the rest of the country.”

The colonel’s moment of, as they say, clarity came when he needed to ease the pain of Specialist Wilhelm in a field hospital in Iraq on Oct. 7, 2003. Two lives were changed that day.

“I started out as an anesthesiologist.” he says. “I never planned on becoming a painiac.”

Coping with a certain level of pain is a viable option, he says, because the alternative can lead to something much more debilitating.


Sunday, August 20, 2017 - 10:06am
Public Domain

This weekend's Barron's cover story provides a look at how the leading coffee chain can teach Silicon Valley a lesson.

  • Other featured articles discuss a top defense contractor that should benefit from increased military spending and a radio maker whose products could be supplanted.
  • The prospects for a recent IPO and a specialty retailer are also examined.

"Starbucks Teaches Silicon Valley a Lesson in Tech" by Alex Eule is the cover story and offers a look at how coffee giant Starbucks Corporation (NASDAQ: SBUX) has changed consumer payment behavior in a way that should inspire envy in Silicon Valley. And see why, despite a recent slowdown in same-store sales, Barron's thinks shares could rise 20 percent or more over the next year.

Lawrence C. Strauss's "In a World of Danger, Lockheed Looks Like a Safe Bet" points out that Lockheed Martin Corporation (NYSE: LMT), the top defense contractor in the United States, is ramping up production of F-35s and should benefit from an expected boost in military outlays. The stock is up sharply since 2013, but could it rise another 14 percent over the next 12 months?

In "Static Ahead for Motorola Solutions?" Bill Alpert makes the case that shares of Motorola Solutions Inc (NYSE: MSI) could tumble in a few years if sales of its two-way radios used by first responders and emergency workers plummet due to a new multibillion dollar public-safety broadband network. Shares have marched higher since 2010, but should investors worry about a big downturn?

See also: Apple, Amazon, Tesla And The Changing Dynamics Of The Car Industry

Under private-equity firm KKR, Gardner Denver Holdings Inc (NYSE: GDI) retooled its compressor and pump business, according to "Don't Dump This Pump Stock" by Jack Willoughby. Now it's public again and trading above its recent IPO price. See why Barron's feels that it will use its generous cash holdings to build its portfolio of brands, and that the stock may have upside of up to 40 percent.

In Vito J. Racanelli's follow-up article, "A Fender Bender for Advance Auto," find out why Barron's recent bullish call on Advance Auto Parts, Inc. (NYSE: AAP) ran into a brick wall last week. Does the predicted turnaround remain intact? What should investors expect in the fourth quarter and beyond? In addition, another follow-up article offers suggestions for where to shop for retail stocks.

Also in this week's Barron's:

  • A mutual fund to own when the downturn comes
  • Why Warren Buffett does not own gold
  • The president's secret weapon that will make the markets cheer
  • How investors are chasing faster growth abroad
  • Happiness as a measure of economic freedom
  • Whether there is value in tech funds
  • Reasons to be wary of volatility ETFs
  • Dividends in health care other than pharmaceuticals

Sunday, August 20, 2017 - 10:00am
Public Domain

If millennials aren't interested in investing, is there any reasonable expectation for children to take up stock picking as a hobby? Savvy investors looking to teach their children a thing or two about finance should start as early as possible and not rely on the school system, CNBC's Jim Cramer argued during his daily "Mad Money" show.

"You simply cannot rely on the public schools and even these ritzy private schools to teach your kids about money," Cramer said. "If you want your children to be fluent in the language of finance — you have to do it yourself."

Fortunately, step one is simple, Cramer explained. Give kids the gift of stock in a high-quality company that resonates with young people. For example, Walt Disney Co (NYSE: DIS) resonates with both boys and girls given its blockbuster movie franchises including "Frozen" and "Star Wars." Parents should consider giving their children a "couple of shares" as soon as they are old enough to appreciate its big movie franchises.

By the time children are ready to for college their Disney shares will likely have achieved a decent return and reinforce the importance of saving and investing, Cramer continued. This is especially true when considering college students are a prime target for new credit card accounts. The opportunity cost of not investing could be large credit card debt that could take years to pay off.

"If you don't want to do this for your children, do it for yourself, because kids who can manage their own finances are kids who won't be begging you for moola even after you have gone into retirement," Cramer concluded.

Related Links:

Jim Cramer Hates ETFs

7 Reasons For Creating Your Own Trading Strategy


Saturday, August 19, 2017 - 2:57pm
Public Domain

What did you do on your summer vacation?

Well, Target Corporation (NYSE: TGT) decided to team up with Barnes & Noble Education Inc. (NYSE: BNED) to fend off major moves by Amazon.com, Inc. (NASDAQ: AMZN) to capture the coveted college campus market.

In a stunning back-to-school move, two companies with a heavy stake in the cool, college-age demo pooled their considerable presence in college communities to fend off the Godzilla-like encroachment of Amazon, which has been starting to school the competition in a figurative food fight for control.

Back-To-School Scale

Target CEO Brian Cornell, in a conference call with analysts earlier this week, said the cheap-but-hip retailer will offer products from Target.com at the BNED bookseller’s 800 college bookstore outlets serving 5 million students.

In a transcript of the conference call, he said Target is not only going after the college crowd, but those densely populated urban areas abandoned by retail for decades.

“On the way to transforming more than 600 stores over a 3-year period, nearly doubling the number of small-format stores are shared in support of our goal to open more than 100 new stores in dense urban, suburban and college campus neighborhoods over a 3-year period,” he told the analysts.

Barnes education, a spinoff of the big bookseller, has been entrenched in the college market for years. Target is one of the few big brick-and-mortar retailers successfully enduring the e-commerce juggernaut of Amazon, which is actually moving paradoxically into brick-and-mortar to meet its enemies on myriad playing fields.

What It Means

It means a war of opportunity for investors. The trade journal Retail Dive puts it this way:

“The news of Target’s tie-up with Barnes & Noble Education comes on the heels of Amazon’s announcement of a new free Instant Pickup service for Prime and Prime Student members, who can order from a selection of daily essentials for pickup in two minutes or less. Amazon also has several campus-based retail operations and pickup services, and the Target effort is an answer to that, according to Jim Fosina, CEO of Fosina Marketing Group.”

“Barnes & Noble’s education-based operations are strong and that makes this a ‘nice move’ for Target," Fosina told Retail Dive in an email.

Best Bet? Anybody’s Guess Because Wall Street

"Target partnering with Barnes & Noble stores doesn't create demand," Fosina told Retail Dive. "It provides an opportunity to build demand. The real success of the program is going to be the marketing effort here to incentivize and win over the student market. We shall see."

Related link:

Reverse Engineering: E-Commerce Behemoth Amazon Ironically Moves Into Brick-And-Mortar


Saturday, August 19, 2017 - 10:28am
https://commons.wikimedia.org/wiki/File:President_Trump%27s_First_100_Days-_76_(

CEOs walk a fine line when it comes to talking about hot-button issues like transgender rights or gun control or arming transgender people to fight for the right of immigrants to have affordable health care and equal pay without enduring global warming.

The Statista stats service has put together a handy graphic that reflects a poll by the PR firm Weber Shandwick that essentially asks: What are safe topics for CEOs to talk about, and what areas are foot-in-mouth minefields?

The online poll was taken of 1,021 adult Americans in March and April. “We concluded that CEO activism comes with both risks and rewards for CEOs and their companies,” the report said, offering priceless guidance.

The firm noted that lots of CEOs were against President Donald Trump’s travel ban on people from mostly Muslim nations, as well Trump’s decision to ditch U.S. participation in the Paris climate accord.

Again With The Millennials

“We found unmistakable signs generationally that cannot be ignored by business leaders,” the report said. “Millennials, a highly desirable employee and consumer market, are generally more positive about activist CEOs than Gen Xers (ages 37–52) and Boomers (ages 53–71).”

Obviously, Jeff Bezos and Elon Musk can say whatever they want since they’re rich enough to rocket your lame millennial carcass to Mars. But let’s just look at what the people polled consider the do’s and don’ts of what topics upon which a chief exec should assume the position.

Related Link: The Story Of Bell’s Brewery: Larry Grows From Stoner Beer Baron To Craft Beer Icon

Don’t Talk About LGBT Rights. Wait: Seriously?

Only 29 percent of those polled said CEOs should speak out about the topic. But that hasn’t stopped some from trying. Chick-Fil-A CEO Dan Cathy got his goose thoroughly cooked when he came out against gay marriage. His solution? He refused to change his mind, but promised not to broach the subject again, which seems kind of (ahem) chicken.

Don’t Talk About Gun Control

Chip Bergh, CEO at Levi Strauss & Co., which makes jeans that seem like they were designed for hip-slung holsters, took a fusillade of shots on Twitter Inc (NYSE: TWTR) when he outlawed open-carry guns at the retailer’s outlets. The CEO of Sturm Ruger & Company Inc (NYSE: RGR) can no doubt expound endlessly on stopping power. Only 26 percent of respondents believe CEOs should go there.

Don’t Talk About Refugees?

Melinda Gates, the force of nature behind the Bill and Melinda Gates Foundation, would probably blow her cool if a CEO scurried away from the topic of asylum seekers, people who by definition are fleeing war, famine and unfathomable disaster.

The foundation works toward providing clean water and sanitary, cholera-fighting bathroom facilities in some of the most horrible situations on the planet, an unglamorous yet vital role not often embraced by other humanitarian groups. And look how she tamed a ruthless CEO like Bill.

Yet it tied for last with gun control, with only 26 percent of people polled saying CEOs should talk about this vast problem.

Do Talk About Job Training

Boring. It goes without saying. Job training? Good. No job training? Bad. Yet the reluctance of Congress to provide affordable education — whether it be college tuition or valuable skills learned at trade schools — there isn’t much action on that front. Yet 70 percent of those polled said it needs to be addressed.

Do Talk About Equal Pay

Bingo! The American economy’s Achilles heel and a serious problem with the frat boy CEOs who seem to stagger and swagger around Silicon Valley. Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) is under investigation by the Labor Department for wage disparity. Uber is considered a cesspool of sexism. Equal pay for women is such a hot topic that 67 percent of respondents said CEOs need to openly discuss it.

Do Talk Health Care

What is there to say? Corporate America has been slicing away health benefits that once were common for decades, and the GOP-controlled Congress seems torn between continuing that trend — even cutting Medicaid to the bone — while others consider it political dynamite to remove the flawed but life-saving benefits of the Affordable Care Act. Sixty-two (62) percent of Americans think CEOs should join the health care debate.

Be Careful!

The PR firm ultimately concludes that CEOs expressing opinions is a “slippery slope,” but millennials like when they do. As long as they agree. And even if they do, there are those folks on the board of directors.

“Discuss the pros and cons with the board,” the report recommends. “Boards do not like surprises.”

______

Image Credit: By The White House from Washington, DC (President Trump's First 100 Days: 76) [Public domain], via Wikimedia Commons