>>> K-Cup owner Keurig grabs Dr Pepper Snapple
(Reuters) - Keurig Green Mountain Inc will buy soda maker Dr Pepper Snapple Group Inc (DPS.N) in a deal worth more than $21 billion, bringing the world’s biggest single-serve coffee brand K-Cup and beverages such as 7UP, Snapple and Sunkist under one roof.
The deal marks Germany’s JAB Holding Co latest push into the U.S. beverage market, after buying Keurig owner Green Mountain Coffee Roasters in 2016 and Mondelez’s international coffee business earlier.
JAB said it would make an equity investment of $9 billion to finance the transaction for which the companies did not give an overall value. Including an $18.7 billion cash payout to Dr Pepper Snapple shareholders, Thomson Reuters calculations put the value of the deal in excess of $21 billion dollars.
Dr Pepper Snapple shareholders will receive $103.75 per share as a special cash dividend and own 13 percent of the combined company, which will be called ‘Keurig Dr Pepper’, the companies said.
Shares of Dr Pepper jumped nearly 37 percent in premarket trading to $131 on Monday and were set to open at a record high. The company had a market capitalization of $17.3 billion as of Friday’s close of $95.65.
Keurig Chief Executive Bob Gamgort will head the combined company, while its Chief Financial Officer Ozan Dokmecioglu will be the chief financial officer.
The new company expects total net debt at closing, foreseen in the second quarter of 2018, to be about $16.6 billion.
Cadbury maker Mondelez International Inc (MDLZ.O) separately said that as part of the deal, it would exchange its stake in Keurig for an equity interest in the new company.
Keurig Green Mountain was taken private by a JAB-led investor group, that included Mondelez, for about $13.9 billion in 2016. That deal created a global coffee giant that set its sights to take on industry leader Nestle NESN.VX.
Goldman Sachs was the lead financial adviser to Keurig and Credit Suisse advised Dr Pepper Snapple on the deal.
>>> Philip Morris hopes smokeless is the new smoking
By Saabira Chaudhuri
Nov 6, 2017
‘Heat not burn’ products have become an obsession for the company’s CEO
Philip Morris International is hoping smokers will prefer IQOS, which heats tobacco, instead of existing e-cigarette options that heat a nicotine-laced liquid but contain no tobacco.
Cigarette maker Philip Morris International Inc. PM, +0.55% is betting big on smokeless products with a device called IQOS that heats but doesn’t burn tobacco.
The number of cigarettes big companies sell is declining and, with regulations continuing to tighten, the companies are focused on future-proofing their business, investing in e-cigarettes and “heat not burn” products that they say are less harmful than traditional cigarettes. Philip Morris has joined with Altria Group Inc. MO, +0.79% to apply for Food and Drug Administration approval to market IQOS in the U.S. as a less risky alternative to cigarettes.
Philip Morris, spun off from Altria in 2008, sells cigarettes only outside the U.S.; Altria sells cigarettes only in the U.S. If Philip Morris’s IQOS wins FDA approval, it will be sold in the U.S. by Altria in a licensing agreement with Philip Morris, which will receive royalties from U.S. sales.
Making IQOS—pronounced eye-koss—a success has become an obsession for the company’s chief executive, André Calantzopoulos.
A tobacco industry lifer and former smoker, Calantzopoulos is a walking advertisement for his new product, puffing away on the cigarette-shaped device through the day. He’s counting on lower taxes and looser marketing restrictions than those levied on traditional cigarettes to push smokers to switch to these new, higher-margin products.
He’s also betting many smokers will prefer IQOS, which heats tobacco, to existing e-cigarette options that heat a nicotine-laced liquid but contain no tobacco, making for an experience that’s less like traditional smoking.
Philip Morris has poured money into clinical trials that have shown IQOS is safer than smoking. The company maintains that combustion, rather than the tobacco or nicotine in cigarettes, is what’s harmful. Critics say more long-term studies and independent research are needed to evaluate IQOS’s health effects.
The company in January relaunched its website, stripping away prominent mentions of big moneymakers like Marlboro and Benson & Hedges cigarettes and touting its decision to “develop, market, and sell smoke-free alternatives, and switch our adult smokers to these alternatives, as quickly as possible around the world.” In September, Philip Morris pledged $1 billion to create a foundation to encourage people to switch to smoke-free alternatives.
Critics note the company is still aggressively selling traditional cigarettes while challenging display bans and rules in some places that require plain packaging with graphic health warnings.
“I don’t see any sign at all they’re backing off the very aggressive effort to sell as many traditional Marlboros to as many people as they can,” says Matthew Myers, head of the Campaign for Tobacco-Free Kids.
In an interview with The Wall Street Journal, Calantzopoulos discussed how Philip Morris sees the future of smoking and why he thinks IQOS is the key to the company’s success. Edited excerpts follow.
Filling a gap
WSJ: With e-cigarettes already available in so many markets, why do we need IQOS?
Calantzopoulos: The problem we had with electronic cigarettes since the beginning of development was the satisfaction of the smoker. Because the taste is dramatically different and, at the initial stages, the nicotine pharmacokinetics were very slow. You could not get the satisfaction. It’s not so easy to crack this code.
The taste satisfaction is very important. The closest you are to this, the more chances you have to switch people. It’s very nice to have a zero-risk product, but if nobody uses it, you don’t have any reduction in public health risk.
Which markets are likely to be the biggest ones for these new, alternative products?
Calantzopoulos: When you look at the potential of these products you need to understand what is the readiness of smokers to switch. That relates to public-health concerns, social pressure, concern for people around you and many other more subtle things. You cannot say that Indonesia is at the same level of readiness as the U.K, Western Europe or the U.S.
The potential is in every market, because eventually I think people will switch to these products as they become available. There are two unmet needs in smokers: something that is much better for my health and something that bothers others much less or doesn’t bother them. These are things cigarettes can’t resolve. These new products are developed to address these needs.
What’s more profitable for you, IQOS or traditional cigarettes?
Calantzopoulos: Today it’s IQOS because of the lower taxes.
You say you don’t want to encourage new cigarette smokers. If that’s true, will you have a business in 40 years? What’s the long-term plan?
Calantzopoulos: First, I don’t think it’s 40 years we’re talking about here. It’s much longer. Second, we only have, if you include China, a 15.4% share of the world [cigarette market outside the U.S.] With [alternatives to traditional cigarettes] we have seen we can grow our market share even if the market reduces. Plus we’ve started introducing accessories for the product.
At over $100 for the starter kit, IQOS isn’t cheap. Can you explain your pricing strategy?
Calantzopoulos: Innovation, in the minds of people, cannot be something extremely cheap. If you are an average person and you hear that something that is much better than cigarettes comes to the market at the cheapest possible price, you’ll not trust it. This is the reason we didn’t initially manufacture in China, because you need to create that credibility.
Over time you need to make the products available and affordable to different categories of people.
The big shift
You redesigned your website recently to describe yourself as “committed to a smoke-free future” even though most of your business is still in traditional cigarettes. Why?
Calantzopoulos: We developed the website because we needed to make clear to our own stakeholders and employees here that this is the direction of the company.
This is not an easy thing, because we are entering into a territory that is very unknown. It’s not your traditional competitors.
Our industry has been a fairly linear and predictable industry. You know what’s going to happen every year. You know from time to time you are going to have a tax increase, you are going to have regulatory restriction, but, as it applies to everybody, I think we are doing very well.
But now you move to a model that from linear can become exponential for a period of time. It’s much more technology-driven, much more digital-driven. Competitors other than our traditional competitors can come in, whether legitimate or fly-by-night ones, and you have to anticipate all those things. We are the first ones to be in the category, so we anticipated quite a lot. We are learning every day. The whole organization has to gear up to this new reality and these new competitive rules around it.
There are still many regions of the world where you’re actively trying to grow revenues in your traditional cigarette business. How do you reconcile those actions with your mission statement of switching adult smokers to alternatives as quickly as possible?
Calantzopoulos: Shifting the company to these products doesn’t mean that I will give market share to my competitors free of charge. In the markets where we are not present with IQOS yet or the other reduced-risk products, you still need to defend your share of the market.
They still represent the bulk of our income, and so far they have financed the billions of dollars we have put behind these new products. But once we go national in a market, and absent capacity constraints, then you shift your resources and your focus to these new products.
But isn’t there an inherent contradiction here? Your new efforts are being funded by your traditional cigarette business, so it’s important that you keep that going.
Calantzopoulos: Take a market like Indonesia as an example. If I just take my foot off the pedal completely, nothing is going to happen to the total market except that I lose share.
The logic says you don’t do this until you go with IQOS.
We are focusing the organization much more on the new business. We will have very few new traditional product introductions, and as markets switch to IQOS we would remove resources [from the old business] completely.
Next year IQOS becomes profitable, so even the financing from these traditional businesses isn’t necessary anymore, because it becomes fully self-sustaining.
What should the regulatory environment look like for cigarettes and these new products?
Calantzopoulos: It’s pretty clear that we will need measures to accelerate the conversion to new products. Governments can either make measures even worse for cigarettes or do something different on these [new] products to show consumers they are different. I think they should do both.
I think over time the fiscal environment on cigarettes will become different, and the regulatory environment has to differentiate the products. If that is at the expense of cigarettes, so be it—it’s not a problem for me. But we need some logical forum where we don’t talk ideology but rather we talk about what can really accelerate the conversion. If you do display bans everywhere in the world on cigarettes but you can display IQOS, that’s a differentiating measure for me. Then I’m more than willing to accept these measures because they are really conducive to make people switch.
>>> Warren Buffett defends Berkshire's conglomerate structure — and fires a huge shot at private equity
by Myles Udland
Feb. 28, 2015
Berkshire Hathaway is a massive conglomerate.
With a market cap over $300 billion, the company directly owns dozens of businesses and holds huge stakes in many more, some of which include America's largest companies like Coca-Cola, IBM, Wells Fargo, and American Express.
In his 50th letter to Berkshire Hathaway shareholders, Buffett addresses this structure, which he says has a terrible reputation with investors, which it "richly deserves."
But of course, it could probably be worse: Berkshire could be a private-equity firm.
In his letter, Buffett writes that the bad reputation for conglomerates is mostly owing to the problems this structure had in the 1960s, when companies were acquiring any and all other businesses in an effort to boost per-share earnings. Eventually this scheme fell apart and the conglomerate structure — which often involved a holding company owning disparate businesses under one roof — became out of fashion.
But the conglomerate structure, Buffett argues, also gives the current iteration of Berkshire Hathaway a kind of flexibility for acquisitions that you can't get just anywhere. "To put the case simply: If the conglomerate is used judiciously, it is an ideal structure for maximizing long-term capital growth," Buffett writes.
And because Berkshire is a conglomerate, Buffett says the company doesn't have an affiliation to any particular business or line of work, with Buffett writing, "That’s important: If horses had controlled investment decisions, there would have been no auto industry."
This structure has also allowed Berkshire, in Buffett's estimation, to becomes the "home of choice for the owners and managers of many outstanding businesses."
"Families that own successful businesses have multiple options when they contemplate sale," Buffett writes. "Frequently, the best decision is to do nothing. There are worse things in life than having a prosperous business that one understands well. But sitting tight is seldom recommended by Wall Street. (Don’t ask the barber whether you need a haircut.)"
Buffett says that companies looking to sell are often then left with two types of buyers: competitors and private equity firms ("Wall Street buyers," Buffett calls them).
And it is the latter that can be most unpleasant.
For some years, these purchasers accurately called themselves "leveraged buyout firms." When that term got a bad name in the early 1990s – remember RJR and Barbarians at the Gate? – these buyers hastily relabeled themselves "private-equity."
The name may have changed but that was all: Equity is dramatically reduced and debt is piled on in virtually all private-equity purchases. Indeed, the amount that a private-equity purchaser offers to the seller is in part determined by the buyer assessing the maximum amount of debt that can be placed on the acquired company.
Later, if things go well and equity begins to build, leveraged buy-out shops will often seek to re-leverage with new borrowings. They then typically use part of the proceeds to pay a huge dividend that drives equity sharply downward, sometimes even to a negative figure.
In truth, "equity" is a dirty word for many private-equity buyers; what they love is debt. And, because debt is currently so inexpensive, these buyers can frequently pay top dollar. Later, the business will be resold, often to another leveraged buyer. In effect, the business becomes a piece of merchandise.
Berkshire offers a third choice to the business owner who wishes to sell: a permanent home, in which the company’s people and culture will be retained (though, occasionally, management changes will be needed). Beyond that, any business we acquire dramatically increases its financial strength and ability to grow. Its days of dealing with banks and Wall Street analysts are also forever ended.
Some sellers don’t care about these matters. But, when sellers do, Berkshire does not have a lot of competition.
To Buffett, Berkshire offers a third, more friendly choice for sellers.
In 2014, Berkshire contracted for 31 "bolt-on" acquisitions worth $7.8 billion in all. The company also closed on its acquisition of Van Tuyl Automotive, which has $9 billion in annual sales and brings Berkshire's ownership of companies that would be independently listed in the Fortune 500 to 9.5 (Heinz is the 0.5).
And the company seems ready to find more things to buy. As Buffett writes: "Our lines are out."
>>> Fiserv, Inc., together with its subsidiaries, provides financial services technology worldwide. The company?s Payments and Industry Products segment provides debit and credit card processing and services; electronic bill payment and presentment services; Internet and mobile banking software and services; person-to-person payment services; and other electronic payments software and services. This segment also offers card and print personalization services; investment account processing services for separately managed accounts; and fraud and risk management products and services. Its Financial Institution Services segment provides account processing services, item processing and source capture services, loan origination and servicing products, cash management and consulting services, and other products and services that support various types of financial transactions. This segment also offers a range of services, such as customization, business process outsourcing, education, consulting, and implementation services; and ACH, treasury management, source capture optimization, and enterprise cash and content management solutions, as well as case management and resolution services to the financial services industry. The company also provides document and payment card production and distribution, check processing and imaging, source capture systems, and lending and risk management products and services. Fiserv, Inc. serves banks, thrifts, credit unions, investment management firms, leasing and finance companies, retailers, merchants, mutual savings banks, and building societies. The company was founded in 1984 and is headquartered in Brookfield, Wisconsin. <<<
>>> ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers' Compensation, and Lloyd's Syndicate segments. It offers professional liability insurance for healthcare professionals and facilities; professional liability insurance for attorneys; liability insurance for medical technology and life sciences risks; and workers' compensation insurance for employers, groups, and associations. The company markets its products through independent agencies and brokers, as well as an internal sales force. ProAssurance Corporation was founded in 1976 and is headquartered in Birmingham, Alabama. <<<
>>> Syntel's Repatriation Plan For Foreign Earnings Cashes Out At $15/Share Special Dividend
September 13, 2016
SYNT's decision to give shareholders a one-time special dividend of $15 per share by repatriating cash held by its foreign subsidies isn't enough to turn Joseph Foresi of Cantor Fitzgerald bullish.
In a research report on Tuesday, Foresi noted that Syntel will repatriate approximately $1.24 billion in cash and will incur a one-time tax expense of $264 million.
The company also lowered its earnings guidance to reflect the charge and costs for the special dividend. Specifically, the company's project earnings per share range is ($0.60) to ($0.75) from a prior $2.55 to $2.70. Accordingly, the analyst lowered his third-quarter earnings per share estimate from $0.62 to ($2.60) but maintains his revenue estimate of $245.20 million.
Related Link: What Do Corporate Credit Ratings Mean For Investors?
Foresi continued that his Hold rating, which he reiterated, is based on the fact that he is looking for a catalyst to drive revenue growth above industry rates.
Looking forward, the analyst also lowered his 2017 earnings per share estimate to $2.56 from $2.70 due to a "projected reduction in annual other income." Nevertheless, his $43 price target remains unchanged and his based on a 17x multiple to his 2017 earnings per share estimate
Align Technology - >>> 3 Top Stocks You've Been Overlooking
Don't let these underappreciated businesses pass you by.
by Steve Symington, Rich Smith, and Keith Speights
Mar 8, 2017
Align Technology: Dental patients using products made by Align Technology have been smiling for years. Align's Invisalign clear aligners are practically invisible and eliminate the need to wear awkward metal braces. The company's shareholders have been smiling, too: Align Technology stock has nearly quadrupled over the last five years.
But as a mid-cap stock, Align hasn't gotten the attention that larger stocks get. It deserves consideration from investors, though. Align has consistently grown revenue and earnings. The company has made some smart acquisitions -- especially the 2011 purchase of Cadent, which brought the iTero intraoral scanner into Align's product lineup.
Align has a clear pathway for future growth. The company already receives around 35% of its revenue from international sales. Further international expansion should drive sales and earnings higher, particularly in highly populated countries with growing middle classes like China and India.
Not every example of malocclusion (misalignment of teeth) is a fit for Invisalign right now. However, Align is working hard to change that by introducing new clear aligner versions that address more complex cases.
Align has also ventured into new territory by expanding beyond the Invisalign brand. The company forged a deal with SmileDirectClub in June 2016 to supply non-Invisalign clear aligners. SmileDirectClub ships aligners directly to customers' homes. Align gained a 17% equity stake in SmileDirectClub as part of the transaction.
>>> Align Technology, Inc. designs, manufactures, and markets a system of clear aligner therapy, intra-oral scanners, and computer-aided design and computer-aided manufacturing (CAD/CAM) digital services. The company?s Clear Aligner segment offers Invisalign Full, a treatment used for a range of malocclusion; Invisalign Teen treatment that addresses orthodontic needs of teenage patients, such as compliance indicators, compensation for tooth eruption, and six free single arch replacement aligners; and Invisalign Assist treatment for anterior alignment and aesthetically-oriented cases. It also provides Invisalign Express (10 and 5) and Invisalign Lite/i7 treatments for orthodontic cases, non-comprehensive treatment relapse cases, or straightening prior to restorative or cosmetic treatments; Invisalign Go, a solution for general practitioner dentists (GPs) to identify and treat patients with mild malocclusion; SmileDirectClub aligners for minor tooth movement; custom clear aligner retainers used to maintain tooth position and correct minor relapse; and SmartTrack, a custom-engineered material that delivers force for orthodontic tooth movements. The company?s Scanners and Services segment offers iTero Scanner, a single hardware platform with software options for restorative or orthodontic procedures; and Restorative software for iTero, a software for GPs, prosthodontists, periodontists, and oral surgeons. It also provides Orthodontic software for iTero, a software for orthodontists for digital records storage, orthodontic diagnosis, Invisalign digital impression submission, and for the fabrication of printed models and retainers; CAD/CAM services, such as iTero Models and Dies, OrthoCAD iCast, and OrthoCAD iRecord; and Invisalign outcome simulator, a chair-side and cloud-based application for the iTero scanner, as well as third party scanners and digital scans for Invisalign treatment submission. The company was founded in 1997 and is headquartered in San Jose, California. <<<
>>> The Year That Was: Dr Pepper Snapple
The perpetual third behind Coca-Cola and PepsiCo in the U.S. carbonated soft drinks market, Dr Pepper Snapple had a solid 2016. Steady organic growth even in the declining segment of U.S. CSDs, coupled with a strong non-carbonated portfolio, has resulted in the company beating consensus estimates for five consecutive quarters now. Solid operating performance, leading to an increase in margins despite a decline in the top line, pushed up estimates for the full-year earnings for Dr Pepper. This occurred both after the announcement of Q2 results, and then again after the announcement of Q3 results. The company now expects full-year core EPS to be in the $4.32-$4.40 range, up from the updated estimate of $4.27-$4.35 after the second quarter results.
Dr Pepper Has Been Able To Grow Its CSD Volume
The U.S. CSD market is expected to have declined for the twelfth consecutive year in 2016. The per capita consumption was already down to 154 liters last year— the lowest since 1985. Now, Dr Pepper’s growth is heavily dependent on the U.S. CSD market, with around 82% of the company’s net volume in this category and ~90% of the company’s net revenue coming from the U.S. itself. Despite a portfolio heavily skewed towards a low-growth category, Dr Pepper has managed to grow its CSD volume in North America.
DPS Q&A 24
Dr Pepper has managed to extract growth in this segment despite both the mature nature of the U.S. CSD market and strong market position of both Coca-Cola and PepsiCo, which together hold close to 70% of the market. Why Dr Pepper has managed to grow is also because of its relatively small market share. Dr Pepper is taking away share from other companies, especially PepsiCo, which has lost share continuously in the last few years. But mostly, Dr Pepper has been able to grow its revenue per case due to positive package and price mix, which has boosted its CSD revenue in North America, which formed 92% of the company’s net sales in 2015. Favorable package and price mix helped increase CSD sales by 2% in Q3, 2.5% in Q2 and 3% in Q1. Companies are moving to single-serves, which have higher price per unit, thus boosting the revenue per case. Although Coca-Cola and PepsiCo emphasized smaller packs before Dr Pepper did, the latter is catching up, and could continue to see growth in CSDs due to the expected rise in its revenue per unit volume. The company has closed approximately 98% voids on its regular smaller CSD packages.
Allied Brands Contribute Big To Dr Pepper’s Growth
Dr Pepper is deriving high volume growth from its allied brands, which although together form roughly 5% of the company’s net volume, form ~50% of the top-line growth. The allied brands growth is included in the packaged beverage volumes for Dr Pepper, which is the distribution wing for these small but fast growing brands, such as Bai 5, Vita Coco, etc. Certain allied brands are experiencing both double- and triple-digit growth rates partially as a result of Dr Pepper’s specific focus on allied brand distribution and availability. At the gross margin line, the allied brands tend to carry lower gross margin because they have somebody else’s manufacturing profit in there, but are good contributors to Dr Pepper’s operating profitability. Allied brands are an important factor of growth, and Dr Pepper has continued to strengthen this segment.
In 2016, Dr Pepper bought Bai Brands, maker of antioxidant and other health-oriented beverages, for $1.7 billion, strengthening its portfolio of fast-growing beverage segments and moving slightly away from the slower-growth CSD category. Dr Pepper has remained formidable during tough times in the core CSD category and is also growing strongly in the faster-growing beverage categories in the non-carbonated drinks segment, which seemingly puts the company in good stead for another solid year in 2017.
Cal-Maine - >>> Brittle egg prices plague Cal-Maine on Wall Street
September 22, 2016
By Noel Randewich
SAN FRANCISCO, Sept 22 (Reuters) - Wall Street will closely watch Cal-Maine Foods' quarterly report on Monday as the largest U.S. egg producer struggles with too much production and uncertainty about consumer demand for cage-free eggs.
The Jackson, Mississippi-based company has been targeted by short sellers since 2015, when avian flu ravaged U.S. flocks and producers over-reacted to losses by adding more new hens than demand warranted, causing a slump in egg prices.
Accounting for around a quarter of U.S. egg sales, Cal-Maine is expected on average to post its second straight quarterly loss and a 53 percent drop in revenue, according to Thomson Reuters data. The company does not provide revenue projections because egg prices are typically highly unpredictable.
Part of the difficulty in predicting egg prices is that when they rise, processed food makers sometimes increase their use of substitutes and do not always switch back to eggs when prices fall, said Eric Gottlieb, analyst at D.A. Davidson.
"Maybe at this very moment it's easier to use eggs, but you can't change your formulation constantly," Gottlieb said.
Going against that trend in a bid to appeal to customers craving more authentic foods, Dunkin' Brands Group in July said it was working on higher-quality egg products, which also include soybean oil and corn starch.
Shares of Cal-Maine have fallen 25 percent in the past year. Cal-Maine rose 1.3 percent on Thursday ahead of its report on Monday.
The company has continued to lose favor on Wall Street. In the last quarter, 80 institutional investors, like hedge funds and pension funds, sold their stakes in Cal-Maine, a 74 percent increase from the previous quarter, according to Morningstar. In the same period, 58 institutional investors became new owners of Cal-Maine, a 15 percent decrease.
Short interest peaked at $900 million in February, and has since fallen to $584 million, equivalent to a quarter of Cal-Maine's market capitalization, according to S3 Partners, a financial analytics firm.
Complicating matters in the egg industry is growing demand from consumers and animal welfare groups that hens be allowed to live outside of cramped cages and given free run in barns, a change meant to reduce the animals' suffering but which increases costs.
Companies including Wal-Mart Stores, Target, McDonald's, General Mills Inc and Kellogg Co have committed to stop using eggs laid by caged hens within the next several years. But with cage-free eggs up to twice as expensive as normal eggs in supermarkets, it remains unclear how quickly consumers will make the shift.
Specialty eggs, a category including cage free, accounted for 23 percent of Cal-Maine's sales volume in the May quarter, up from 21 percent a year before. But the company also warned that low prices for regular eggs were pressuring demand for its specialty eggs.
Cal-Maine and its smaller rivals are adding cage-free hens at a pace outstripping demand for their eggs, according to CJS Securities analyst Craig Bibb.
"If you're standing in the grocery store, and the cage-free eggs are $2 and the regular eggs are 79 cents, most people are taking 79 cents," Bibb said.
>>> Scotts Miracle-Gro Company manufactures, markets, and sells consumer lawn and garden products worldwide. The company's Global Consumer segment offers lawn fertilizers, grass seed products, spreaders, other durable products, and outdoor cleaners, as well as lawn-related weed, pest, and disease control products; water soluble and continuous-release plant foods, potting mixes, garden soils, mulch and decorative groundcover products, landscape weed prevention products, plant-related pest and disease control products, organic garden products, live goods and seeding solutions, and hydroponic gardening products; and insect and rodent control products, and selective and non-selective weed control products to protect homes and maintain external home areas. This segment provides its products primarily under the Scotts, Turf Builder, EZ Seed, Water Smart, PatchMaster, EverGreen, Fertiligène, Substral, Miracle-Gro Patch Magic, Weedol, Pathclear, KB, Celaflor, EdgeGuard, Snap, Handy Green II, OxiClean, Miracle-Gro, Osmocote, Hyponex, Earthgro, SuperSoil, Ortho, Miracle-Gro Organic Choice, Nature's Care, Whitney Farms, EcoScraps, General Hydroponics, AeroGarden, Substral, ASEF, Scotts EcoSense, Naturen, Fafard, Tomcat, Roundup, Groundclear, Nexa Lotte, and Home Defence brand names. Its Scotts LawnService segment offers residential and commercial lawn care, tree and shrub care, and pest control services through the periodic applications of fertilizer and control products. As of September 30, 2015, this segment had 88 company-operated locations; and 94 independent franchisees operated locations. The company primarily serves home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, food and drug stores, and indoor gardening and hydroponic stores through a direct sales force and network of brokers and distributors. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.
Visa -- >>> Consumers win as Visa and PayPal go from enemies to ... frenemies?
By Therese Poletti
July 21, 2016
PayPal users will be able to link their account directly to a Visa debit card thanks to a deal the two companies announced Thursday.
Visa Inc. and PayPal Holdings Inc. have signed a deal that might be the perfect example of what Michael Corleone said in “The Godfather Part II”—“Keep your friends close but your enemies closer.”
One of the most important aspects of the deal Visa and PayPal announced Thursday along with their quarterly earnings is that it will now be easier for consumers to use a Visa credit or debit card when paying with PayPal PYPL, +0.20% which currently defaults to a user’s PayPal account or their bank account. Any PayPal user who has had a payment default to a checking account, as opposed to the credit card that they thought they were using, can understand a rant two months ago by the CEO of Visa V, -0.72% in which he went after PayPal.
“They drive a lot of business our way. That’s supposedly the friend part of it,” Visa Chief Executive Charles Scharf said in May at the J.P. Morgan Technology Conference. “The foe part is where ... we and our clients get disintermediated from the transaction, the entire experience, and it causes tremendous customer service problems for the bank specifically.”
He added that he would love to figure out a different model that put consumer choice first, but was willing to declare war on PayPal if needed.
“The other door is where we go full steam and compete with them in ways that people have never seen before,” he said.
Instead, PayPal appears to have reached out with an olive branch, though the former eBay Inc. EBAY, +10.89% subsidiary did mention “threats of a targeted pricing action” from Visa in a conference call Thursday. The two companies forged a deal that will make it easier for consumers to use their Visa cards for payment on PayPal. In addition, Visa debit card customers can move money instantly via PayPal and its fast-growing Venmo unit, a digital wallet service for smartphones. Previously, there has been a waiting time for funds to clear in those transactions. PayPal also joins the Visa mobile payments framework and will provide more data to credit card companies on transactions.
“It is a fantastic thing for both companies,” said Michael Moeser, director of payments at Javelin Strategy & Research in Pleasanton, Calif., adding that the recent escalation of their rivalry had an impact on PayPal’s stock in late May. “When (PayPal CEO) Dan (Schulman) responded, Wall Street didn’t buy it that it was water under the bridge.”
The effects may not all be positive, however. The deal is likely to have some impact on PayPal’s profit margins, even if it drives higher volumes with more transactions.
“We expect the agreement could drive higher payment volumes for PayPal, but with lower transaction margins (higher mix of credit-card transactions),” said Colin Sebastian, an analyst with Robert W. Baird & Co., in a note to clients.
On its call with investors, PayPal executives said there may be a short-term rise in its expenses, similar to an acquisition, but of long-term benefit. The company also said the deal also opens up the door to more “new partnerships.”
PayPal no longer has the specter of a full-frontal attack from a payments giant hanging over its head and could even see better headway in physical payments, because the deal also opens up access to Visa mobile-payment stations in stores. Meanwhile, Visa is likely to experience a boost in online transaction volume.
The deal does not make the two companies best buddies, however: Visa still has a competing option in Visa Checkout, and PayPal seems to be accepting this change to its longtime practices only after threat of a corporate assault. Neither company saw big boosts in late trading after the deal, showing investors consider the effects to be rather neutral.
The big winner, for once, is consumers, who will receive easier transactions using two things most already have: A Visa card and PayPal account.
“Consumer choice is an important point of the discussion in the press release,” Scharf said in a conference call with analysts on Thursday. “What we have done in this agreement, we have tried to work with PayPay to take away the things that discourage people from working together and take away the bad customer experience.”
American Water Works, NextEra Energy ->>> 3 Top Stocks to Buy Your Grandkids
If you want to give your grandkids a head start in life, consider giving them shares of these three stocks. Our choices might surprise you.
Apr 3, 2016
The amazing power of compounding makes it easier to grow wealth the earlier in life you start investing. So, perhaps you want to help give your grandkids the financial leg up in life that you wish someone had given you, by buying stocks for them.
We asked three of our contributors to name a stock that he or she believes would make a great investment for a child. Find out below why American Water Works (NYSE:AWK), Synaptics (NASDAQ:SYNA), and NextEra Energy (NYSE:NEE) could be tickets to your grandkids' financial head start in life.
American Water Works, the largest investor-owned water and wastewater utility in the United States, would make a great stock to buy for a child if your goals are:
•Buying an "autopilot"-type stock
•Generating superior long-term gains
•Igniting an interest in investing
American Water Works is not a stock you or your grandchild will have to closely monitor. While many things will change in the decades to come, it's a certainty that your grandkid will grow up in a world where water remains the most essential commodity on the planet.
You'll be hard-pressed to find a stock that offers this type of stability while generating superior long-term gains. Since its April 2008 IPO, American Water Works stock has returned (including dividends) 320% through March 29, crushing the S&P 500's return of 77%. Moreover, this so-called "stodgy" utility also beat the returns of many stocks commonly recommended for kids, such as Walt Disney (245%), McDonald's (173%), Mattel (144%), and Coca-Cola (96%) over this period. There are some potentially attractive stocks among this bunch (I'm partial to Disney), but none of them sell a product guaranteed to be in demand -- or even in existence -- decades from now.
American Water Works has solid future growth potential, which should lead to continued market-beating long-term returns. It's the 800-pound gorilla in a very fragmented industry, which provides it with the resources to continue to grow through acquisitions. Moreover, it has pricing power in its nonregulated business.
Choosing a stock your grandchild can relate to should go a long way in sparking his or her interest in investing. All kids can highly relate to a water company -- just turn on your tap and tell your grandchild that whenever one of an estimated 15 million people in more than 45 states and parts of Canada does the same, his or her company makes money.
A great stock to take advantage of your grandkids' long time horizon for investing, and to get in on the Internet of Things (IoT) -- a multitrillion-dollar market opportunity -- is Synaptics.
Synaptics develops displays, touchscreens, and fingerprint security solutions primarily for mobile devices. Of last quarter's record $471 million in revenue, approximately 87% was mobile-related, and the balance was from Synaptics' PC-related products. Now, Synaptics is ready to grow its mobility business via one of the fastest-growing areas of IoT: connected cars.
How big is in-car technology? According to a recent study, new car buyers are more interested in an automobile's infotainment system than actual driving performance. Synaptics boasts a suite of solutions to win the connected-car wars, and it has already inked deals with some of the world's largest auto parts manufacturers. Better still, despite Synaptics' early wins, it's only scratched the surface of a market that will become as commonplace as a radio by the time today's grandkids become adults.
Synaptics was recently the recipient of a rumored $110 buyout offer earlier this year, its second in four months. The inquiry was notable because Synaptics was trading at just $62.05 a share at the time. It may fly under many investors' radars, but pundits certainly recognize the potential Synaptics offers.
Synaptics is an absolute bargain, too. Trading at just 10 times future earnings compared to its current 23, the Street clearly expects Synaptics' impressive revenue growth to continue. The grandkids of today already live in an IoT world, and Synaptics gives them an opportunity to grow their portfolios right along with the next trillion-dollar market.
If you're looking for a "set it and forget it"-type stock for your grandchildren, my suggestion would be to consider utility giant NextEra Energy.
NextEra Energy supplies power to more than 4.8 million residents in Florida and is best known for its subsidiary Florida Power & Light Company, or FPL. What makes FPL unique is that it's one of the largest rate-regulated utilities in the country. While rate regulation might give shareholders the desire to pull their hair out from time to time since rate hikes require permission from regulators, it also means less exposure to wholesale electricity cost fluctuations, and very predictable cash flow.
More important, NextEra Energy is the United States' utility kingpin when it comes to alternative energy investments. Although investing in wind and solar isn't cheap -- through 2014, NextEra had shelled out $20 billion to develop its wind business -- the long-term rewards could be huge. As the U.S. government begins pushing cleaner emissions standards on electric utilities, NextEra looks primed to be in great shape, with 32 million megawatt-hours of wind generation and approximately 700 MW of solar-power generation in 2014. Both figures are tops in the country for electric utilities. As the cost to provide alternative energy drops, it means NextEra could have a clear cost advantage over its peers. As a bonus, it also means FPL's customers could see smaller price hikes since FPL's costs remain under control.
Despite its heavy investment in alternative energy, the company is also paying out a market-topping 3% yield. With EPS growth looking to remain steady in the 4%-7% range for the foreseeable future, and NextEra selling a basic-need product (electricity), investing in this stock could be a smart way to give your grandkids' savings accounts a jolt.
>>> Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally.
The company's SensoryEffects segment offers creamer systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice and dairy bases, chocolate systems, ice cream bases and variegates, cereals, grain based snacks, and cereal based ingredients; and microencapsulation solutions for various applications, including food, pharmaceutical, and nutritional ingredients. It also provides human grade choline nutrient products for use in wellness applications.
Its Animal Nutrition & Health segment offers microencapsulated products that enhance health and milk production in ruminant animals; chelation technology, which provides enhanced nutrient absorption for species; and choline chloride, an essential nutrient for monogastric animal health.
The company's Specialty Products segment offers ethylene oxide primarily for use in the health care industry; and single use canisters with ethylene oxide for sterilizing re-usable devices. It also sells propylene oxide, a fumigant to aid in the control of insects and microbiological spoilage; to reduce bacterial and mold contamination in shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs, and prunes; and to customers seeking smaller quantities and whose requirements include utilization in various chemical synthesis applications.
Its Industrial Products segment provides derivatives of choline chloride for use in industrial applications; and methylamines, which acts as a building block for the manufacture of choline products, as well as used in industrial applications. The company sells its products through its sales force, independent distributors, and sales agents. Balchem Corporation was founded in 1967 and is headquartered in New Hampton, New York. <<<
Sector: Basic Materials
Industry: Chemicals - Major Diversified
>>> American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada. The company offers water and wastewater services to approximately 1,600 communities in 16 states. It operates approximately 81 surface water treatment plants with approximately 500 groundwater treatment plants and 1,000 groundwater wells; 100 wastewater treatment facilities, 1,200 treated water storage facilities, 1,400 pumping stations, 81 dams, and 49,000 miles of mains and collection pipes. The company also undertakes contracts to design, build, operate, and maintain water and wastewater facilities for military bases, municipalities, the food and beverage industry, and other customers. In addition, it provides warranty-type services to homeowners and smaller commercial customers to protect against the cost of repairing broken or leaking water pipes or clogged or blocked sewer pipes, as well as interior electric line repairs; and water sourcing, transfer services, pipeline construction, water and equipment hauling, and water storage solutions for natural gas exploration and production companies. The company serves residential customers; commercial customers, such as offices, retail stores, and restaurants; industrial customers, including manufacturing and production operations; public authorities, which comprise government buildings and other public sector facilities; and other water utilities, as well as supplies water to public fire hydrants for firefighting purposes, and private fire customers for use in fire suppression systems in office buildings and other facilities, as well as to other water utilities. American Water Works Company, Inc. serves approximately 15 million people with drinking water, wastewater, and other water-related services in 47 states, the District of Columbia, and Ontario, Canada. The company was founded in 1886 and is headquartered in Voorhees, New Jersey. <<<
Industry: Water Utilities
Full Time Employees: 6,700