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>>> 3 Ways to Earn Big Returns Without the Shaky Stock Market
Don't limit yourself to the stock market. These alternatives can trounce the S&P 500.
MoneyWise
by Rona RichardsonBy Rona Richardson
Oct. 28, 2021
https://moneywise.com/investing/investing-basics/3-ways-to-invest-outside-of-the-stock-market?utm_source=syn_oath_mon&utm_medium=B&utm_campaign=19414&utm_content=oath_mon_19414_new+investing+platform
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
Investment ideas are plentiful — but most of them involve the stock market or flipping homes.
If you’re looking for a way to invest without the violent swings of stocks or the headaches of being a landlord, this article is for you.
While most of these ideas can have big profit potential, please remember to always do your due diligence.
1. Invest in farmland and help drive agriculture towards sustainability on a massive scale
You can now invest in one of human civilization’s oldest and most reliable sources of wealth: U.S. farmland.
Unlike many other types of investments, farmland is intrinsically valuable — whether boom or bust, people still need to eat.
And with the global population poised to hit 10 billion by 2050, there will be no shortage of mouths to feed.
Between 1992 and 2020, farmland returned an average of 11% per year. Over the same time frame, the S&P 500 returned only 8%. And when considered on a risk-adjusted basis, farmland outperforms the stock market by a wide margin.
FarmTogether is an all-in-one investment platform that lets accredited investors buy stakes in U.S. farmland.
You can get a cut from both the leasing fees and crop sales, providing you with an income stream. And you can also benefit from the long-term appreciation of the land.
Start by opening a FarmTogether account free of charge. Review their past offerings, visit their extensive learning center, and review a sampling of the data and tools that active investors have access to prior to making your first investment.
2. Build a real estate empire without being a landlord
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Investing in real estate is another money move that might seem out of reach unless you’re already wealthy.
But Fundrise makes it easy for anyone to get into the real estate game, no matter how big (or small) your budget is.
Using Fundrise is a lot like buying stocks, only instead of getting a piece of a company, you get a share of real estate.
And Fundrise lets you invest in all sorts of properties across the country, from single-family homes in rural Texas to high rise apartments in New York City.
There are no transaction fees or sales commissions, and the standard fees are just 1% a year.
Set up an account in a few minutes, and you can start building your real estate empire with as little as ten bucks.
3. Jump into the crypto boom starting with $1
Once considered a niche asset, Bitcoin has entered the mainstream.
Even big names like Elon Musk and Mark Cuban now hold millions of dollars worth of it in their portfolios.
Here's the main allure of cryptocurrencies: Unlike fiat money, most cryptos have a limited supply of tokens specified by mathematical algorithms. So no matter how much money the Fed prints, cryptos don’t get diluted through inflation.
Some even call cryptos “digital gold.”
At the time of this writing, Bitcoin has returned an astronomical 8,667% over the past five years. Had you invested just $500 in Bitcoin five years ago, you'd be sitting on more than $43,000 today.
Thanks to Robinhood, investing in cryptocurrencies is easier (and cheaper) than ever.
Other big crypto exchanges charge up to 4% per transaction when buying or selling crypto.
Robinhood, on the other hand, charges 0%. And it allows you to trade not only Bitcoin, but also Ethereum, Dogecoin, Litecoin, Ethereum classic, Bitcoin Cash, and Bitcoin SV.
There’s no need to buy a whole coin. You can start with as little as $1. So set up an account and start investing today.
Final Thoughts
You don’t need to limit yourself to the stock market in order to invest successfully.
These three investment ideas aren’t typical, but nonetheless real. Maybe reading about these alternatives will inspire you to think outside of the box when looking for interesting places to invest your own money.
Always remember to consult with a financial advisor to discuss the merits of your ideas and associated risks.
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>>> In a market full of wild valuations, Bill Gates holds these stocks for the stable income growth
by Clayton Jarvis
October 28, 2021
https://finance.yahoo.com/news/market-full-wild-valuations-bill-172300805.html
In a market full of wild valuations, Bill Gates holds these stocks for the stable income growth
Having sold most of his shares in Microsoft, Bill Gates doesn’t stand to gain nearly as much from the company’s market-topping Q2 as some of the other big shareholders.
But it’s safe to say that both Gates and his well-known charity will be just fine.
Gates is still worth more than $135 billion, according to Forbes, while the Bill & Melinda Gates Foundation Trust remains loaded with winning dividend stocks.
Dividend stocks are a solid way to diversify a portfolio that may be chasing growth a little too fervently. They generate income in both good times and bad, and tend to outdo the S&P 500 over the long-run.
Here are three dividend stocks that occupy significant space in the Bill & Melinda Gates Foundation Trust. It might make sense to follow in its footsteps with some of your spare change.
FedEx Corporation (FDX)
At a time when the global supply chain is bogged down from end-to-end, FedEx’s expertise in providing logistics solutions is more valuable than ever.
And with consumers getting used to having their products delivered to their doors, FedEx has been able to increase both shipping volumes and prices.
After increasing its dividend by almost 37% over the past three years, FedEx now pays investors an annual dividend of $3.00 per share.
The foundation’s portfolio included almost 1.5 million shares of FedEx in the second quarter of 2021. The shares have slipped since then, but Gates’ stake in the company is still worth about $354 million. They’re in line for a roughly $4.5 million dividend payout this year.
FedEx currently offers a dividend yield of 1.3%.
Walmart Inc. (WMT)
With grocery stores deemed essential businesses, Walmart was able to keep its more than 4,700 stores in the U.S. largely open throughout the pandemic.
Not only has the company increased both profits and market share since COVID coughed its way across the country, it has also established itself as a safe bet for investors come the next planet-wide catastrophe.
Gates owns a pile of Walmart shares — about 7.6 million of them. That accounts for about 4.5% of the foundation’s entire stock portfolio.
Walmart has steadily increased its dividends over the past 45 years. Its annual payout is currently $2.20 per share, so the foundation can expect a payment in the neighborhood of $16.7 million from the company in 2021.
Walmart currently trades at roughly $148 per share after a strong rally over the past month. But if you’re on the fence about jumping at such a high price, some investing apps might give you a free share of Walmart just for signing up.
Canadian National Railway Company
Canadian National Railway, or CN, has a 20,000-mile-plus rail network that spans from Canada to Central America. The company has access to all three North American coastlines — the Pacific and Atlantic Oceans and the Gulf of Mexico — making it unique among North American rail companies.
It’s been a very good 2021 for CN.
In Q2, operating income rose by 76% year over year to $1.1 billion. Meanwhile, revenue reached $2.9 billion.
The Gates foundation owns almost 14 million shares of CN. The company’s quarterly dividend is 61.5 cents, 7% higher than it was last year.
CN shares currently sport a dividend yield of 1.5%.
Gates’ secret weapon
In January of 2021, Bill and Melinda Gates owned more U.S. farmland than anyone else in America. And it’s not hard to see why.
Between 1992 and 2020, farmland returned an average of 11% per year. Over the same time frame, the S&P 500 returned only 8%. And with the global population poised to hit 10 billion by 2050, there will be no shortage of mouths to feed.
Farmland used to be off-limits to the average investor. That’s no longer the case.
A new investing platform can help you plant your money in a variety of thriving U.S. farmland opportunities and watch it grow.
No green thumb required.
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>>> Bill Gates is hanging on to these stocks for steady income — you can too
MoneyWise
by Brian Pacampara
September 23, 2021
https://finance.yahoo.com/news/bill-gates-hanging-stocks-steady-205400370.html
In a world of historically low interest rates, investors would be wise to look out for dividend stocks offering solid — but stable — dividend yields.
Bill Gates is hanging on to these stocks for steady income — you can too
Healthy dividend stocks have the potential to:
Offer a plump income stream in both good times and bad times.
Provide much-needed diversification to growth-oriented portfolios.
Outperform the S&P 500 over the long haul.
Today, let’s take a look at three dividend plays that represent sizeable positions in the Bill & Melinda Gates Foundation Trust.
After all, investment legend and BIll’s good pal Warren Buffett is a trustee of the foundation, so it might make sense to follow along — maybe with some of your spare change.
1. Caterpillar (CAT)
With a healthy dividend yield of 2.3%, Caterpillar leads off our list.
According to its most recent 13F filing with the Securities and Exchange Commission, the Gates Foundation owns more than 18.6 million shares of the construction equipment giant representing 9.3% of the portfolio.
Caterpillar shares have slumped in recent months, down more than 25% from their 52-week highs, but now might be an opportune time for bargain hunters to jump in. Competitors like John Deere and Cummins have also been punished.
Despite the bearish sentiment surrounding heavy machinery stocks, Caterpillar’s dividend continues to be backed by unmatched brand credibility, scale advantages, and massive free cash flow generation.
In the most recent quarter, Caterpillar’s revenue jumped 29% to $12.9 billion. More importantly, management returned $800 million to shareholders through dividends and share repurchases.
2. United Parcel Service (UPS)
Next up, we have UPS, which currently offers a dividend yield of 2.2%.
The Gates Foundation owns about 2.8 million shares of the small-parcel delivery leader, accounting for 2.4% of its total portfolio. Gates also owns 1.5 million shares of rival FedEx, so it’s clear that he’s fond of the space.
UPS’ dividend, in particular, is supported by a massive air and delivery fleet that allows the company to earn above-average margins. In fiscal 2020, UPS handled 21.1 million average parcels daily.
More recently, operating profit spiked 47% in Q2 to $3.3 billion as revenue increased 14.5%. And year-to-date, free cash flow clocked in at $6.8 billion representing a jump of 75% from the year-ago period.
With e-commerce tailwinds continuing to blow heavily in UPS’ favor, the stock’s forward P/E of 15 seems reasonable.
To be sure, UPS trades at $187 per share. But you can get a piece of UPS using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.
3. Crown Castle International (CCI)
Rounding out our list is cell tower REIT Crown Castle International, which currently offers a solid dividend yield of 2.8%.
Crown Castle leases its more than 40,000 cell towers to major wireless carriers including Verizon, AT&T, and T-Mobile, so its dividend is backed by a highly reliable revenue stream and still-very attractive mobile data usage trends.
In the company’s latest quarter, management saw its “highest level of tower activity in history” fueled by a robust 5G leasing environment. Adjusted funds from operations — a key metric in the real estate industry — increased 18%.
Thanks to that momentum, Crown Castle paid common stock dividends of roughly $575 million, an increase of 11% over the year-ago period.
Crown Castle shares are down 6% in September.
Bill's preferred personal investment
There you have it: three attractive dividend stocks sitting in the Gates Foundation portfolio.
While growth stocks make most of the financial headlines, generating steady returns with stable assets should be a top priority for risk-averse investors.
Of course, you don’t have to limit yourself to the stock market to do that.
In fact, Bill Gates is partial to investing in U.S. farmland with his own personal money.
Gates is America's largest private owner of farmland and for good reason: Over the years, agriculture has been shown to offer higher risk-adjusted returns than both stocks and real estate.
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Downside targets to watch for the S+P 500 -
5% correction = 4310. Today it dropped to 4306 intraday, so a 5% correction before bouncing in the last half hour.
10% correction = 4083, which is very close to the 200 MA (4106 and rising). So 4100 is a key target area to watch in the months ahead.
20% correction = 3630, which would also correspond to a 38.2% Fibonacci retracement (3644)
(numbers are approximate)
>>> The Taper That Will Really Bite Into U.S. Growth Isn’t the Fed’s
Bloomberg
By Rich Miller
September 19, 2021
https://www.bloomberg.com/news/articles/2021-09-19/the-taper-that-will-really-bite-into-u-s-growth-isn-t-the-fed-s?srnd=premium
Pullback of budget aid could drive sharp slowdown in late 2022
At least some stimulus got stashed away, limiting fiscal drag
In the coming Year of the Taper, it’s the fiscal version that will really bite.
The chatter in U.S. financial markets is all about the Federal Reserve’s yet-to-be-announced reduction of its bond purchases. That’s obscuring something important: the already-under-way cutback of the federal government’s budgetary support -- which is likely to have a much bigger impact on economic growth next year.
Becoming a Drag
The U.S. government spent historic sums to support the economy in the pandemic. Its withdrawal will create an unusually big fiscal cliff
The U.S. expansion looks set to slow sharply in the second half of 2022 as measures that propped up the economy during the pandemic -- from stimulus checks for households to no-cost financing for small companies -- fade from view.
That will be the case even if President Joe Biden manages to win Congressional approval for the bulk of his $3.5 trillion Build Back Better agenda. The spending will stretch over years, with limited impact in 2022. It will also be at least partly paid for by tax increases that slow the economy down rather than speed it up.
‘Moves Sideways’
“We’re in for some very low growth rates” in late 2022 and into 2023, said Wendy Edelberg, director of the Brookings Institution’s Hamilton Project. “It wouldn’t surprise me if there’s a quarter here or there where the economy basically moves sideways.”
She’s not alone in forecasting a steep slowdown. Jan Hatzius, chief economist at Goldman Sachs Group Inc., expects the U.S. to be expanding at a 1.5% pace by the end of next year, down from 5.7% over the course of 2021.
The coming deceleration would be unwelcome news for investors, who have bid up stock prices to record levels.
It could also spell trouble for Biden and his fellow Democrats in Congress, as they seek to retain slim majorities in November 2022’s mid-term elections -- especially if it’s accompanied by a rise in unemployment, though most economists don’t expect one.
There is a potential benefit: lower inflation. Prices have surged this year on the back of snarled supply chains and fiscally-fueled consumer demand. “We’ll need to come off the boil,” Edelberg said, because the rapid U.S. rebound will push the labor market and the economy to their limits by the middle of next year.
‘Wildly Overstated’
Fed Chair Jerome Powell and his colleagues are expected to discuss taper plans at this week’s policy meeting. Powell has said they could begin scaling back bond-buying this year. The central bank will still be providing the economy and financial markets with stimulus until the purchase program ends, likely sometime in 2022.
Not so with fiscal policy, which has already begun to act as a drag. The Brookings Institution’s Hutchins Center calculates that the economic impact from federal, state and local-government taxes and spending turned negative in the second quarter and will remain that way into 2023.
And even if Biden gets all the additional expenditures he’s seeking, the contractionary swing in the federal government’s budget balance over the coming year will still be one of the largest on record, White House figures show.
Biggest Cliffs
The coming budget retrenchment will be among the sharpest in history
There are some mitigating factors.
U.S. households boosted their savings in the pandemic by some $2 trillion or more. That “cushions any so-called fiscal drag that might appear to be on the books,” said former CBO Director Douglas Holtz-Eakin, who is now president of the American Action Forum. He’s skeptical that budget swings will slow the economy dramatically, calling the idea “wildly overstated.”
State and local governments also have been slow to spend some of the help they’ve gotten from Washington, leaving them with firepower for the future.
‘Running for the Door’
But none of that is likely to fully offset the contractionary impact from fading budget support.
“The tailwind from fiscal policy is now beginning to turn into a headwind that is going to blow very hard by spring of next year,” said Moody’s Analytics chief economist Mark Zandi. “Without any additional fiscal support the economy will feel a bit fragile toward election day 2022.”
Investors, for their part, are starting to fret about a coming slowdown. They turned markedly less optimistic about the economic outlook in Bank of America’s latest global fund-manager survey, entitled “Fiscal Frenzy Flips to Fiscal Flop.”
At the same time, they’ve remained all-in on equities. That disconnect leaves stock prices vulnerable, said David Jones, director of global investment strategy for BofA Securities.
“The longer this dissonance between the fundamentals and the positioning lasts, the more it raises the specter of a violent, disorderly market event in which everyone is running for the door,” he said.
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>>> Big investors are starting to get worried: BofA survey
Yahoo Finance
by Brian Sozzi
September 14, 2021
https://finance.yahoo.com/news/big-investors-are-starting-to-get-worried-bof-a-survey-105901320.html
Big investors are beginning to worry about several key fundamentals that underpin the stock market.
Global growth expectations have continued to "fall markedly" in September, according to the latest survey of fund managers out of Bank of America. The survey found that economic growth expectations are at their lowest level since April 2020.
Expectations for economic growth plunged 14 percentage points from BofA's August survey. BofA said in the report that macroeconomic optimism is "tanking."
The sharp month-to-month decline comes on the heels of a lackluster August jobs report and an increase in earnings warnings from corporate America as the likes of 3M Company and others contend with the impact of the Delta variant on demand and costs.
The dimming outlook for growth has raised concerns among fund managers on corporate bottom lines.
Profit expectations appear to be dimming among those on Wall Street.
BofA points out that global profit expectations have also fallen "markedly" this month. Profit expectations are at their lowest level since May 2020. The September survey marked a 29 percentage point drop in profit expectations compared to August.
Further, a net 22% of those surveyed by BofA expect profit margins of companies to continue to worsen in coming months. That is up from 15% in August.
Amid the gloomier outlook for economic growth and profits, Wall Street handicappers are beginning to voice fresh worries about the path for stocks in the near-term.
“The bottom line for us... is the risk reward is not particularly great at the index level from here, no matter what the outcome is. That’s why we don’t have any upside to the S&P for the rest of the year," said Mike Wilson, Morgan Stanley chief investment officer, on Yahoo Finance Live.
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>>> When the Fed finally steps back, can the U.S. stock and bond markets stand on their own legs?
Market Watch
9-11-21
By Joy Wiltermuth
https://www.marketwatch.com/story/when-the-fed-finally-steps-back-can-the-u-s-stock-and-bond-markets-stand-on-their-own-legs-11631321996?mod=mw_more_headlines
“I think concerns around tapering are a little overplayed,” says U.S. Bank’s co-head of the credit fixed income
The Federal Reserve is expected to follow the ECB and begin reducing its arsenal of support for markets during the pandemic.
Financial markets have staged a dramatic turnaround in the roughly 18 months since global central banks sent in the cavalry, with U.S. stocks climbing to dizzying heights and corporations raking in record profit.
The big question heading into this fall is whether markets can stand on their own legs once the Federal Reserve starts to pull back its pandemic firepower.
For its part, the European Central Bank this week announced plans to recall some of its pandemic monetary support for financial markets, raising expectations for the Fed to soon follow in its footsteps.
While ECB President Christine Lagarde said the pullback didn’t amount to a “tapering,” but was instead a mere recalibration of stimulus efforts, the decision was still viewed as a significant step.
When the pandemic struck the global economy in 2020 central banks embarked on large-scale asset purchases and vowed to keep interest rates near historically low levels to help heal their economies and keep credit flowing during the COVID crisis.
“The ECB has throwing down the gauntlet,” said Phil Orlando, chief equity market strategist at Federated Hermes, in a phone interview. “We are expecting a Fed taper announcement this year.”
“To narrow it down, we are suggesting it is going to come on Nov. 3, which is the conclusion of the Fed’s two-day November meeting.”
He also expects a quick tapering process that ends by June of 2022, followed by a 75 basis point increase in the Fed’s benchmark interest rate by the end of 2023, up from the current 0% to 0.25% range.
Vaccines, jobs, free markets
Fed Chairman Powell often has tied the pace of the U.S. economic recovery, and levels of central bank support, to the coronavirus, vaccinations and labor market conditions.
As a result Federated Hermes’ Orlando expects no decision on tapering the Fed’s $120 billion in monthly asset purchases at the central bank’s Sept. 21-22 policy meeting. “The reason for that is that the August jobs report was terrible. It missed by a half million jobs relative to consensus,” he said.
Labor market conditions are expected to improve in the next few months, given the expiration of the extra $300 a week in unemployment benefits and record job openings.
BofA Global summed up “perhaps the most underappreciated statistic in the jobs market” in this Friday chart, showing how job openings now outpace people seeing work.
“The Fed is pointing to the labor market statistics as a reason to delay tapering,” Ethan Harris and BofA’s global rates and currencies research team wrote. “We don’t agree.”
“If demand is red hot, their job is to lean against it regardless of whether it shows up as surging payrolls or surging excess demand for labor.”
The recent bullishness in the U.S. stock market has come as the U.S. faces its highest daily death count from COVID in six months, with nearly a quarter of the U.S. population still refusing to get vaccinated despite widespread availability in America.
In a renewed push to halt COVID’s toll, President Joe Biden in a Thursday White House speech unveiled a 6-part plan to defeat “the pandemic of the unvaccinated,” which has been filling up hospital emergency rooms and leaving others without access to medical care.
Rough patch
While it has been smooth sailing for investors this year, with the S&P 500 index up almost 19%, a rough patch likely lies ahead.
The Dow Jones Industrial Average DJIA, -0.78% shed 2.2% for the week, while the S&P 500 Index SPX ended the week down 1.7%, booking the ugliest weekly declines since June 18. The Nasdaq Composite Index COMP retreated by 1.6%.
With stock-market valuations at “historically extreme” levels, a Deutsche Bank analyst said on Friday that the risk of a “hard” correction is growing.
In addition, there could be several waves of the coronavirus’ delta variant and the threat of other strains to follow, but also the potential for a significant leadership change when Chairman Powell’s term expires in January.
Since August, Orlando has been bracing for a 5% to 10% pullback in stocks through October, something which has not happened since November 2020 and which could take the S&P 500 down below its 200-day moving average of about 4,000. However, after that clears, he expects the index to top 4,800 around year-end, with a 5,300 forecast for 2022.
Debt test
Another test of U.S. financial conditions has been playing out in real time for borrowers in the near $11 trillion corporate bond market, where the first part of a September financing blitz has been going off without a hitch.
The week of the U.S. Labor Day holiday smashed daily records for the number of investment-grade companies LQD, -0.29% borrowing in the bond market, mainly with an eye to lock in cheap funding ahead of any volatility before year-end.
“It really speaks to the resilience of the market in terms of its ability to digest this volume of corporate credit transactions, despite the deluge,” said U.S. Bank’s James Whang, co-head of the credit fixed income and the municipal product group.
Spreads in both the U.S. investment-grade and high-yield, or “junk bond,” market have been hovering near all-time lows, even as the Fed sells the remainder of its pandemic holdings of corporate bonds.
“I think concerns around tapering are a little overplayed,” Whang told MarketWatch. “I don’t think the Fed would do anything to constrain economic growth, when there still is a fair amount of uncertainty around delta.”
In the week ahead, U.S. economic data will be focused on Tuesday’s cost of living reading via the Consumer Price Index and Core CPI for August. Then, it is more jobs data on Thursday, while Friday brings the preliminary University of Michigan’s consumer sentiment index for Sept.
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Procter + Gamble, Pepsico, Garmin - >>> 3 Shockingly Cheap Dividend Stocks
They pay cash to investors, and have trailed the market in recent months.
Motley Fool
by Demitri Kalogeropoulos
Aug 19, 2021
https://www.fool.com/investing/2021/08/19/3-shockingly-cheap-dividend-stocks/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Values can be hard to find on the stock market, especially after the rally we've had since early 2020. But a few niches have been left out of that surge as Wall Street chases seemingly more exciting growth in areas like cloud computing and e-commerce.
That preference has created some surprising deals for income investors willing to buy an unloved, but still impressive, dividend stock. And a few of the best discounts in that arena today are Procter & Gamble (NYSE:PG), PepsiCo (NASDAQ:PEP), and Garmin (NASDAQ:GRMN).
1. Procter & Gamble
Procter & Gamble was a strong business before the pandemic struck, and it has only boosted its value since then. The owner of several blockbuster consumer staples brands added billions to its sales footprint in 2020 by extending its market share lead in niches like laundry care, skin care, and baby care. And P&G's early 2021 has been a softer landing than that of rivals like Kimberly Clark (NYSE: KMB), with sales rising 6% through late June. Kimberly Clark's fell 3% in the same period.
Despite industry-leading growth and profitability, plus a dividend yield currently over 2.3%, P&G's stock has dramatically underperformed the market over the last year. Income investors might consider capitalizing on that (likely temporary) situation by adding the blue-chip giant to their watch lists.
2. PepsiCo
You wouldn't know it by looking at its stock price chart, but PepsiCo is stronger than it has ever been. Organic sales were up by double digits in its most recent report, which trounced expectations thanks to booming demand across its snack food and beverage portfolio. Profitability is steady, and gushing cash flow is allowing CEO Ramon Laguarta and his team to direct resources into high-return areas like the supply and manufacturing chains, advertising, and innovation.
That elevated spending has many investors looking elsewhere for growth, but that's a mistake. Capital investments Pepsi is making now should lay the groundwork for even faster gains than the roughly 4.5% annual sales uptick it has managed in each of the past two years. Toss in dividend reinvestments and expanding margins, and you have a recipe for market-beating returns over time.
3. Garmin
Garmin's stock has almost doubled the market's performance so far in 2021, but it has more room to run. The GPS navigation device giant just hiked its annual outlook across the board, with sales on track to reach $4.9 billion compared to $4.2 billion in 2020. Garmin's latest product introductions demonstrate a knack for wowing customers, whether it's with consumer fitness trackers, smartwatches, aviation, or boat navigation platforms.
Unlike other companies on this list, Garmin hasn't been left out of the recent stock market rally. Its dividend yield is relatively low for that reason, at below 2%. But investors who want to add more growth into their dividend-heavy portfolios might want to consider this stellar business.
Operating margins have been expanding for several years and should continue climbing thanks to growth in areas like aviation and boating. Its wider portfolio, meanwhile, protects against the types of sales slumps that have plagued less diversified consumer tech peers. These factors make Garmin seem cheap, considering its expanding earnings power.
You might want to watch this stock in hopes of scoring a discount as part of a wider market correction. Or you could establish a smaller position now and simply look to dollar-cost-average into the stock over time.
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>>> More Strategists Say a Storm Is Brewing in the U.S. Stock Market
Bloomberg
by Ksenia Galouchko and Joanna Ossinger
September 10, 2021
https://finance.yahoo.com/news/deutsche-team-sees-risk-hard-025920070.html
(Bloomberg) -- Strategists from almost all the top Wall Street banks have come out this week with a nervous message about the U.S. stock market.
The latest views hail from Deutsche Bank AG and Goldman Sachs Group Inc., and echo earlier pronouncements from Morgan Stanley, Citigroup Inc. and Bank of America Corp.
While investment banks tend to be measured in their outlooks, there are common threads that underpin their predictions that the market is vulnerable. Valuations are at historical extremes, stocks have rallied non-stop for seven months, the economy looks soft and the Federal Reserve is preparing to taper stimulus.
“The risk that the correction is hard is growing,” wrote Deutsche Bank equity strategists including Binky Chadha. “Valuation corrections don’t always require market pullbacks, but they do constrain returns.”
Wall Street Braces for Stumble in U.S. Stocks on Relentless Tear
Some of the market strain is already showing up. The S&P 500 has fallen about 1% in the past three sessions, though U.S. futures were indicated higher on Friday morning. The index has soared 100% since the March 2020 lows.
Here’s a rundown of commentary this week:
Binky Chadha, equity strategist at Deutsche Bank
“Equity valuations at the market level are historically extreme on almost any metric.” Trailing and forward price-earnings ratios, as well as valuation metrics based on enterprise value and cash flow, are all in the 90th percentiles, he said.
James Congdon, co-head of Canaccord Genuity’s research division Quest
“Global stock markets may be entering a period of turmoil.” He added that investors should favor stronger businesses with robust cash flows over weaker and more speculative companies.
Dominic Wilson, strategist in economics research at Goldman Sachs
“While the broad U.S. market outlook is solid in our central case, we think peak cyclical optimism in the U.S. may be behind us.” The strategists said hedges look attractive, especially on a shorter time horizon.
Andrew Sheets, cross-asset strategist at Morgan Stanley
“We are going to have a period where data is going to be weak in September at the time when you have a heightened risk of delta variant and school reopening.” The bank cut U.S. equities to underweight and global stocks to equal-weight on Tuesday.
Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America
“The S&P 500 has essentially turned into a 36-year, zero-coupon bond,” she said. “If you look at the duration of the market today, it’s basically longer duration than it’s ever been. This is what scares me.”
The threat is that “any move higher in the cost of capital via interest rates, credit spreads, equity risk premia, that’s basically going to be a huge knock on the market relative to the sensitivity we’ve seen in the past,” she said.
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>>> Farmland Partners Inc. (FPI) is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns approximately 155,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.
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>>> Founded in 1997, Gladstone Land (LAND) is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 127 farms, comprised of approximately 94,000 acres in 13 different states, valued at approximately $1.0 billion.
Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, figs, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually.
The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. The Company pays monthly distributions to its stockholders and has paid 93 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 20 times over the prior 23 quarters, and the current per-share distribution on its common stock is $0.0449 per month, or $0.5388 per year.
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https://finance.yahoo.com/quote/LAND/profile?p=LAND
>>> How to Invest In Farming Without Owning a Farm
Investopedia
By JOHN LINTON
Jan 11, 2021
https://www.investopedia.com/articles/investing/091615/how-invest-farming-without-owning-farm.asp
TABLE OF CONTENTS -
Farm REITs
Agriculture Stocks
Ag ETFs
Ag Mutual Funds
Soft Commodities
The Bottom Line
Investing in farming can seem like a good strategic move. After all, whether the overall economy's in a recession or booming, people still have to eat. Because of this, many investors regard agriculture and farming investments as being recession-proof. Further, as the world's population increases, farming will play an increasingly important role in sustaining global societies.
That said, literally buying a farm isn't a feasible strategy for the average investor. Buying a farm can require a large capital commitment and the time and costs of operating or leasing a farm are often substantial. Fortunately, investors have many other means to gain exposure to the sector beyond sinking money into a farm.
KEY TAKEAWAYS
Investing in agriculture means putting your money behind food and crop production, processing, and distribution.
As the world needs to feed a growing population and with less land, interest in agriculture production as an investment has grown right along with the world population.
There are several ways to invest indirectly in agriculture, from farm REITs to agricultural ETFs to the commodities markets.
Farm REITs
The closest that an investor can get to owning a farm without actually doing so is by investing in a farming-focused real estate investment trust (REIT). Some examples include Farmland Partners Inc. (FPI) and Gladstone Land Corporation (LAND).
These REITs typically purchase farmland and then lease it to farmers. Farmland REITs offer many benefits. For one thing, they provide much more diversification than buying a single farm, as they allow an investor to have interests in multiple farms across a wide geographic area.
Farmland REITs also offer greater liquidity than does owning physical farmland, as shares in most of these REITs can be quickly sold on stock exchanges. And farmland REITs also decrease the amount of capital needed to invest in farmland, as a minimum investment is just the price of one REIT share.
Agriculture Stocks
Investors also have access to an assortment of publicly-traded companies that operate in the farming sector. These companies range from those that directly grow and produce crops to those working in a variety of industries that support farmers.
Crop Production
One potential investment opportunity is in firms that plant, grow, and harvest crops. Many of these firms also engage in such supporting activities as distribution, processing, and packaging. Unfortunately, there are a limited number of publicly-traded crop production firms, which include Fresh Del Monte Produce Inc. (FDP), Adecoagro S.A. (AGRO), and Cresud (CRESY).
Supporting Industries
Investors can also buy shares in a variety of industries that support farming. Three of the largest industries are companies that sell fertilizer and seeds, farm equipment manufacturers, and crop distributors and processors.
Fertilizer and seeds.
Many firms are involved in the production and sale of fertilizer and seeds, and investors will want to determine how much of each firm's revenue is actually derived from agriculture, as some also service a number of other sectors. Among the publicly-traded companies selling fertilizer or seeds are Nutrien Limited (NTR) and The Mosaic Co. (MOS).
Equipment
Farming's an equipment-intensive activity, so investors can gain exposure to the sector by making investments in equipment manufacturers with an agricultural focus. Two firms heavily involved in farming equipment are Deere & Co. (DE) and AGCO Corp. (AGCO).
Distribution and processing. Many companies provide the infrastructure that moves crops from the farm to the local grocery store. Among those that transport, process, and distribute crops are Archer Daniels Midland Co. (ADM) and Bunge Limited (BG). As with equipment manufacturers, some of these distributors only derive a portion of their revenues from agriculture-related activities.
Ag ETFs
Exchange traded funds (ETFs) are a good tool for investors to gain diversified exposure to the agriculture sector. The Market Vectors Agribusiness ETF (MOO), for example, offers access to a diversified set of businesses, investing in companies that derive at least 50% of their revenues from agriculture. The best-performing agricultural commodity ETF, based on performance over the 2020 performance is the Teucrium Soybean ETF (SOYB).
Like investing in any type of ETF, investors should carefully consider each ETF's management fees and the performance of the index that the fund tracks.
Ag Mutual Funds
There are also mutual funds that invest in the farming and agriculture industries. If this sounds appealing, you should first determine whether the fund invests in agriculture-related firms or invests in commodities. Also, keep in mind that many of these funds have exposure to other sectors along with agriculture. So if you're more interested in making a pure farming or agriculture investment, you're likely better off going with other types of asset classes.
When investing in mutual funds, investors need to consider fees and past performance, and compare these to those of ETFs, for example. Mutual funds with exposure to agricultural firms or commodities include the Fidelity Global Commodity Stock Fund (FFGCX) and the North Square Oak Ridge Global Resources & Infrastructure Fund (INNAX).
Soft Commodities
More speculative investors may be intrigued by the idea of directly investing in commodities, hoping to take advantage of price changes in the marketplace. While you can gain exposure to commodities just by purchasing futures contracts, there are also a number of ETFs and exchange traded notes (ETNs) that provide more diverse access to commodities.
While some ETFs and ETNs give investors exposure to a specific commodity (such as corn (CORN), livestock (COW), coffee (JO), grains (GRU), cocoa (NIB), and sugar (SGG)), others offer a basket of commodities. As an example of the latter, the Invesco DB Agriculture ETF (DBA) invests in corn, wheat, soybeans, and sugar futures contracts.
There's also the iPath Bloomberg Agriculture Subindex ETN (JJA), which invests in corn, wheat, soybeans, sugar, coffee, and cotton futures contracts, and the Rogers International Commodity Agriculture ETN (RJA), which invests in a basket of 20 agricultural commodity futures contracts.
The Bottom Line
Investors looking to invest in the farming sector have plenty of alternatives to actually purchasing a farm. Investors who hope to most closely replicate the returns of owning farmland can purchase a farmland REIT. For those looking for wider exposure to the agriculture sector, making equity investments in crop producers, supporting firms or ETFs could be their best option. And those looking to profit from price changes in agricultural commodities have a range of futures contracts, ETFs, and ETNs at their disposal. With all of these options, investors should be able to find an investment vehicle and strategy that fits their needs.
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>>> The 3 Best Low Volatility ETFs
Optimized Portfolio
https://www.optimizedportfolio.com/best-low-volatility-etfs/
Below are the 3 best low volatility ETFs for conservative investors to participate in stock returns while limiting downside risk.
USMV – iShares MSCI USA Min Vol Factor ETF
The iShares MSCI USA Min Vol Factor ETF (USMV) is the most popular fund in this space with over $34 billion in assets. This ETF is unique in that it uses a special algorithmic optimization to hold a basket of low-volatility stocks in aggregate while also attempting to keep factor and sector exposure diversified. The fund seeks to track the MSCI USA Minimum Volatility Index. It has over 194 holdings and an expense ratio of 0.15%.
SPLV – Invesco S&P 500 Low Volatility ETF
The Invesco S&P 500 Low Volatility ETF (SPLV) holds the 100 least volatile stocks of the S&P 500 that comprise the S&P 500 Low Volatility Index. Compared to USMV above, SPLV provides a basket of individual low-volatility stocks as opposed to a low-volatility portfolio in aggregate. SPLV does not run any sort of optimization like USMV does. As such, SPLV’s holdings and sector exposure are considerably different than those of USMV. Historically, USMV has delivered greater returns and lower volatility than SPLV. SPLV has over $8 billion in assets and an expense ratio of 0.25%.
EFAV – iShares Edge MSCI Min Vol EAFE ETF
Those seeking international exposure can use the iShares Edge MSCI Min Vol EAFE ETF (EFAV) to capture low volatility stocks in developed markets outside of North America. The fund seeks to track the MSCI EAFE Minimum Volatility Index. It has over $10 billion in assets and an expense ratio of 0.20%.
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Bill Gates - Investment portfolio -
Microsoft -------------------------- (26.6 Bil)
Republic Services -------------- (11.9 Bil)
Deere ------------------------------- (10.2 Bil)
Canadian Natl Railroad -------- (9.6 Bil)
Ecolab ------------------------------ (6.5 Bil)
Fomento Economico ----------- (2.4 Bil)
Waste Management ------------- (2.3 Bil)
Diageo ------------------------------ (1.8 Bil)
AutoNation ------------------------ (1.5 Bil)
Sika ---------------------------------- (1.4 Bil)
Arch Capital ----------------------- (1.3 Bil)
Grupo Televisa -------------------- (446 mil)
Liberty Global --------------------- (241 mil)
Fomento de Construcy Contra - (200 mil)
Western Assets Infl-link OPPS - (177 mil)
Otter Tail ------------------------------ (172 mil)
Coca Cola ---------------------------- (133 mil)
Orascom Construction ---------- (33 mil)
Coca Cola Femsa - (130 mil) (All went to Melinda)
Private Companies -
************************
Convoy Inc
Ginkgo Bioworks
Delos Living LLC
CoGen Lyondell Power Generation Facility
Signature Aviation PLC
268,984 Acres of land (largest private farmland owner in the US)
Four Seasons - (3.4 Bil) (47.5% stake bought in 2007, Saudi prince owns the rest)
https://www.bloomberg.com/graphics/2021-bill-gates-melinda-french-gates-divorce-fortune-split/?srnd=premium
>>> Why women investors outperform men in the long run
Yahoo Finance
Jared Blikre
March 12, 2021
https://finance.yahoo.com/news/why-women-investors-outperform-men-in-the-long-run-trader-205931074.html
When it comes to investing, women tend to outperform men over time, according to several studies.
"We're wired differently. Women have strong activity in planning and self-control. I think that lends themselves to be better traders," says Kathy Donnelly, proprietary trader and co-author of "The Lifecycle Trade."
Donnelly cites a 2017 Fidelity Investments study that concluded women earn higher returns than men when investing — to the tune of 40 basis points, or 0.4% — and that women save more. Over time, these small differences add up, notes Fidelity.
Of the findings, Donnelly says, "[The study] basically tied to trading less, saving more and willing to learn — I think that fits me to a T."
A separate study in the U.K. found that men outperform the country's benchmark FTSE 100 (^FTSE) index by 0.14%, but women tend to beat it by 1.94% — a difference of 1.8 percentage points. Warwick Business School conducted the study with the assistance of Barclays and found that men trade more often than women — 13 times per year versus nine times over the same period.
The Warwick study also found men are more likely to take profits on winning trades while holding onto the losers — concluding that female investors tend to avoid "lottery style" speculation. Men are more likely to buy lower-priced shares, which helps explain the modern meme stock phenomenon. Many of the targeted stocks like GameStop (GME) and AMC Entertainment (AMC) are considered to be penny stocks (or at least they used to be when they traded at lower prices).
A Nasdaq report adds: "Generally speaking, women are more patient and allow their investments to grow. This is important because frequently trading and acting on short term fluctuations cultivate negative outcomes. In this regard, men could borrow a page from women."
When asked about her experience as a female investor, Alissa Coram, multimedia content editor at Investor’s Business Daily, says, "I think that the market doesn't really care what I look like, where I'm from, my age. I look at it as being optimistic ... [T]here are endless opportunities out there, as long as you have a great set of rules and strategies that you are abiding by when you're investing, and making sure you don't blow up your account. I think that the opportunity out there is for everyone, and that females out there should just go for it, and not let stereotypes of Wall Street or the financial world get in their way."
Trading in stocks has historically been male-dominated, but there are signs that cryptocurrencies are helping to disrupt that hegemony. Robinhood recently reported that among its customers, the number of female crypto traders has grown seven-fold this year — with 40% of their active women customers trading in crypto assets, such as bitcoin (BTC-USD), ethereum (ETH-USD) and dogecoin (DOGE-USD). “These figures are encouraging and prove that crypto can be a powerful tool in decentralizing power in finance," Robinhood says.
Donnelly wraps it all up, saying, "It’s all in the brain: Men are on a mission, women are on a journey."
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>>> New York’s MTA Poised for Fare Hike Debate Amid Ridership Drop
Bloomberg
By Michelle Kaske
January 5, 2021
https://www.bloomberg.com/news/articles/2021-01-05/new-york-s-mta-poised-for-fare-hike-debate-amid-ridership-drop?srnd=premium
Agency faces estimated $500 million gap even with federal aid
Board set to meet Jan. 21 to discuss, and maybe vote on, hike
New York’s Metropolitan Transportation Authority faces a showdown on Jan. 21 on whether or not the debt-ridden agency should boost fares as riders struggle during the coronavirus pandemic.
The nation’s largest mass-transit system is set to discuss, and potentially vote on, anticipated fare and toll increases at its next board meeting after Congress last month agreed to send the MTA another $4 billion of aid as part of the latest federal coronavirus relief package.
Even with additional federal money, the MTA’s $17 billion budget for 2021 assumes a 4% increase in fares and tolls that the agency implements every two years. But that jump still requires board approval. Several board members have pushed back against raising those fees this year as New York City’s jobless rate more than tripled to 12.1% in November from 3.6% the year before, according to New York’s Department of Labor.
“This is not the time to raise fares because our riders can’t afford it,” board member Neal Zuckerman, a senior partner and managing director at Boston Consulting Group, said during the MTA’s last board meeting on Dec. 16. “And there’s no way we’re going to close the gap on ridership whether with a 4% increase or a 40% increase.”
While making subways, buses and commuter trains more expensive during the pandemic places stress on riders, the MTA needs additional revenue. It still estimates a budget deficit this year of nearly $500 million, with an $8 billion shortfall through 2024 even after the $4 billion of federal funds and factoring in planned 4% increases on fares and tolls in 2021 and 2023.
A 4% fare hike would bring in a projected $48 million of additional revenue in 2021. The MTA would need to find that money elsewhere if the board chose to delay fare increases this year.
MTA’s board typically votes on fare hikes in January before approving toll increases a month later, and the agency then implements those changes in late March or early April.
Boosting fares could discourage people from using the system, where ridership on subways, buses and commuter rail lines has fallen to about one-quarter of what was projected before the coronavirus outbreak. It will be difficult for the MTA to return to pre-pandemic ridership levels while imposing higher fees, board members have warned.
“While the MTA’s standard biennial review of fare and toll policy has been in effect since 2009, we know this year is anything but standard,” Abbey Collins, an MTA spokesperson, said in an email. “We recognize our customers are facing unprecedented hardship and the MTA board will take all this into consideration as well as the thousands of public comments received after eight virtual hearings when making its decision.”
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>>> Apple is taking control, and a risky bet, with its M1 chip
Yahoo Finance
by Daniel Howley
Technology Editor
November 11, 2020
https://finance.yahoo.com/news/apple-m1-chip-taking-control-and-a-risky-bet-205657151.html
Apple is trying what no other computer company has been able to pull off
Apple’s most widely known product, by a country mile, is its iPhone. It’s the device that has helped turn the company into an empire and pushed its market valuation past the $2 trillion mark in August, a first for a publicly traded U.S. company.
And while the new iPhone 12 lineup is expected to kickstart a major increase in device upgrades and sales, the biggest news out of Apple (AAPL) in 2020 has little to do with its popular smartphone. Instead, the company’s most significant advancement in years comes in the form of its new M1 system on a chip, or SoC.
Apple CEO Tim Cook introduced a trio of new Mac products powered by the company's first M1 chip, replacing Intel's processors in its laptops and desktop products.
The tiny piece of silicon, which Apple debuted during a virtual press conference out of its Cupertino, California, headquarters on Tuesday, is the first of its own design to power its Mac line of products. As Wedbush analyst Dan Ives puts it, the chip “has been a vision 15 years in the making in Cupertino.”
With the new chip, Apple isn’t just signaling that it’s no longer willing to remain beholden to Intel’s (INTC) product pipelines and delays. It’s telling the world that it’s about to transform everything from how users interact with their favorite apps to what they should expect of their laptops and desktops.
But it’s a risky bet. Other companies have tried to use Arm-based chips in laptops before, but couldn’t squeeze out the kind of power Apple is touting. If it fails, the firm’s carefully laid plans could crumble beneath the weight of its goals.
Apple is making some big promises
During its announcement, Apple said that its new M1 chip offers improvements over leading PC processors in terms of both CPU and GPU performance, hitting right at the heart of Intel and AMD (AMD). In a statement, the firm said the M1 has “the fastest integrated GPU in the world,” and features “the world’s fastest CPU cores in low-power silicon.”
From a practical standpoint that means, as Apple tells it, that its new MacBook Air will offer 3.5 times the CPU performance and 5 times the GPU performance of the previous generation Air, all while extending battery life from 12 hours of video playback to a whopping 18 hours. What’s more, the Air won’t have an internal fan, so you won’t have to listen to the annoying whir of your laptop as it struggles to cool itself down while streaming Netflix.
The MacBook Pro, meanwhile, gets a 2.8 times faster CPU thanks to the M1 chip and a 5 times faster GPU. That’s a massive gain for a system that professionals rely on for things like high-end video and photo editing. Oh, and it gets, according to Apple, 20 hours of battery life when using video playback.
What makes this all the more impressive is that Apple is doing this using what’s referred to as a 5-nanometer process, which generally refers to the size of the transistors packed into a chip. Transistors are, more or less, on/off gates on a processor that allow it to perform instructions. The smaller the transistor, the more tightly it can be packed onto a chip alongside other transistors, allowing for greater energy efficiency and power. Apple’s chip, for instance, holds 16 billion transistors.
With the M1, Apple has jumped past both Intel and AMD in terms of sophistication. Intel still hasn’t delivered its 10-nm processors for desktops and, in its latest earnings report, announced delays for its 7-nm chips, sending its stock price plummeting. AMD, meanwhile, is currently using 7-nm chips.
If that weren’t enough, Apple is doing something that no other laptop or desktop maker has done before: using Arm-based processors, which have been traditionally found in low-power machines like smartphones and tablets, to power full-fledged laptops and desktops.
We’ve seen companies like HP and Microsoft (MSFT) use Arm-based Qualcomm (QCOM) processors to power their own laptops before, and while they’ve provided impressive battery life, the performance just wasn’t there.
That’s what makes Apple’s bet so massive. It’s aiming to do something other firms simply haven’t been able to accomplish: taking its own Arm-based chips and crushing the likes of Intel in terms of performance and power efficiency. If it fails, it will sour some of the company’s most loyal fans and could push them to Intel and AMD-based Windows PCs.
And the three Macs the company unveiled are just the beginning. Apple is going to use Arm-based chips throughout its entire laptop and desktop lineup by 2022.
And what about those apps?
So, Apple wants to make its chips its own secret sauce. But what does that have to do with apps? Well, since Apple is leaning on the same style of chip used in its iPhone and iPad, that means the majority of iOS and iPadOS apps will be usable on Macs.
That opens up Apple’s laptops and desktops to the millions of apps available through the App Store. That could be a game changer for Apple, which would bring users access to their favorite apps to the very laptops and desktops they’re now using more than ever due to the pandemic.
Those apps aren’t just going to be the same version from your smartphone slapped onto your Mac’s display with loads of distortions, either. They’ll function as full Mac apps complete with their own windows.
The App Store has been a goldmine for Apple, and to open it up to even more devices could allow for use cases that developers haven’t imagined before.
“We view the chip announcement as the first step of many more on the horizon in our opinion as Cupertino takes the reigns of its architecture and the cross pollination between software and hardware become ubiquitous over the coming years,” Ives wrote in a research note following Apple’s announcement.
Apple is taking control
Of course, it’s important to point out that Apple’s move is also a pragmatic one. Apple coughed up $2.9 billion for Intel’s processors in 2019. By ditching Intel, it cuts out the need to pay the firm for its chips, and allows it to create desktop and laptop experiences more akin to what you’d expect from an iPhone and iPad.
That means a more seamless user experience with advanced features like instantly waking from sleep like the iPhone. How that plays out down the line remains to be seen. But for now, Apple is clearly taking control of its own future — and placing some big bets on it.
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>>> Is MSCI a Buy?
The company leverages its knowledge and expertise to provide exceptional products to the financial industry while growing its subscription-based revenues year after year.
Motley Fool
by Courtney Carlsen
Sep 11, 2020
https://www.fool.com/investing/2020/09/11/is-msci-a-buy/
MSCI (NYSE:MSCI) provides investment products and financial data to some of the largest asset managers in the world. You might be more familiar with it for its exchange-traded funds (ETFs) than for its own business. But its business is a strong one, and it's been a big winner for investors, up almost 500% over the past five years.
The company has built up years of experience in the industry and an extensive collection of historical data, proprietary equity index data, risk algorithms, and environmental, social, and governance (ESG) data, along with strong intellectual property protection on its indexes. As a result, it has been able to effectively leverage this data and expertise to continually improve the index and ETF products it provides for its clients.
MSCI capitalizes on this domain knowledge through a subscription-based revenue model. In fact, subscription-based revenues make up 74% of its $1.6 billion in total revenue since June 30, 2019. Not only that, but the company is able to keep clients satisfied, as seen by its 90%-plus retention rate over the past five years. All of these factors make MSCI a great company to consider adding to your portfolio.
ETF investing is a strength of MSCI's.
A staple in the financial community
MSCI's global reach attracts many big-name clients, most notably BlackRock. The company provides support tools and services for the global investment community including indexes, portfolio construction, and risk management analytics. MSCI's goal is to help clients understand key drivers of risk and return, which in turn help them build better portfolios.
MSCI's stock market indexes make up about 60% of the company's total business. An index can focus on a general basket of stocks, such as the S&P 500, or on investments that fit a very specific criteria such as ESG stocks. MSCI uses its expertise to continuously innovate its ETF and index products. For example, it offers indexes that target systemic style factors, including volatility, size, momentum, and value. It also offers newer indexes for clients that will track ESG companies as well as ETFs based on on-trend factors, such as smart cities, the digital economy, and other disruptive technologies.
In total, MSCI calculates 226,000 indexes daily and 12,000 indexes in real time, and serves 7,800 clients across 90 countries.
Subscription-based revenues are a key growth driver
MSCI's principal business model is to license annual, recurring subscriptions for the majority of its index, analytics, and ESG products and services for a fee due in advance of the service period. For its index segment specifically, the company sells index data subscriptions that give clients access to MSCI index-linked investment products on a contractual basis, rather than on a usage basis.
In its most recent quarterly earnings report, MSCI reported total 12-month revenue of $1.6 billion, 74% of which came from recurring subscription services. Since the end of 2015, it has seen revenues growth at a compounded annual growth rate of 10%. During that same time period, adjusted earnings per share grew even faster, at a compounded annual rate of 28%.
Recurring subscription revenues continue growing, as well. In the second quarter of this year, the company reported recurring subscription revenue of $309.9 million, a 7.2% increase over the same period last year. This increase was driven thanks to 10% growth in recurring revenue from index products and a 22.7% increase in ESG products. Subscription revenue has continued to grow despite the challenges the economy has faced with COVID-19.
A look at the competition
MSCI has a number of competitors, depending on which operating segment you're looking at. In its index segment, the company competes with S&P Dow Jones Indices -- which is jointly owned by S&P Global and the CME Group -- as well as with FTSE Russell, a subsidiary of the London Stock Exchange Group. In analytics, the company finds competition from Qontigo, BlackRock Solutions, Bloomberg Finance L.P., and FactSet Research Systems.
What sets MSCI apart from its competitors is its extensive database on global markets, proprietary equity indexes, risk algorithms, and ESG. The company relies strongly on intellectual property rights to keep many aspects of its products and services proprietary. Also, its strong relationships with its clients gives it an advantage over competitors, especially since happy clients stay with MSCI for years.
A happy client base
MSCI's retention rate, a metric that tracks the company's ability to retain its customers over time, is consistently 90% and higher over the past five years.
MSCI also continues to grow its subscription run rate. This metric provides an estimate at a particular point in time of the annualized value of the company's recurring revenues under its client contracts for the next 12 months, assuming all contracts are renewed. The subscription run rate is a key operating metric for MSCI because a change in its run rate would ultimately impact its operating revenue over time. New subscription sales have an effect of increasing the company's run rate and operating revenues over time. In the past five years, the subscription run rate has consistently grown between 7% and 10%, and its subscription run rate has actually grown over 10% in each of the past three quarters.
MSCI does a good job of maintaining clientele, a sign that its customers are clearly satisfied with its services and products. Maintaining a high retention rate is essential for its subscription-based revenue model to work.
Is MSCI a buy at today's valuation?
Investors may be concerned that MSCI is too expensive for its current share price. The company has a price-to-earnings (P/E) ratio of 56, which is much above its recent norm between 30 and 40. But its consistent sales and earnings growth and customer loyalty make a strong argument that it deserves its premium.
MSCI is a great company that continues to thrive -- even in the face of the COVID-19 pandemic -- thanks to its subscription-based business model, which makes it a steady and stable investment choice despite its high valuation.
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Dahaher - >>> For Investors in Danaher Stock, Breaking Up Should Be Hard to Do
This transformative company is wheeling and dealing to deliver a more profitable, predictable future for shareholders.
Motley Fool
Jason Hawthorne
Sep 18, 2020
https://www.fool.com/investing/2020/09/18/for-investors-in-danaher-stock-breaking-up-should/
Frasier, Better Call Saul, Joanie Loves Chachi: TV spinoffs can be beloved connections to the past or outright duds. Corporate spinoffs, luckily, are more predictable; they have long been a source of outperformance for investors.
In a spinoff, the separation of businesses allows each to focus on what it does best. That focus creates an advantage that -- at least until the recent bull market -- had produced market-beating returns for generations. However, over the past decade, companies that were spun out have trailed the market by almost 3% annually.
Danaher (NYSE:DHR) is no stranger to the practice of spinoffs. The company has long been known as an ever-changing portfolio of businesses with a focus on manufacturing excellence and decentralized operations, and it has a history of buying, selling, and spinning off companies -- but its strategic focus has shifted. In 2015, management announced it would split into two businesses, maintaining the faster-growing, higher-margin science-based companies and spinning off its diversified industrial units. With history offering mixed results on spinoffs, curious investors might wonder whether this transaction has created value for shareholders.
Change for the better
The company was an early adopter of "kaizen," a Japanese operational approach based on continuous, methodical improvement driven by employees. Incorporating this process into what it dubbed the "Danaher Business System" provided a common approach for running the various businesses regardless of industry. The system worked: In the years between 1990 and 2015, shareholders were rewarded with a 9,900% return.
After the 2015 announcement, the company followed through with a series of moves. In 2016, Danaher spun off its industrial businesses as Fortive (NYSE:FTV). The company followed up by spinning out its dental business into Envista (NYSE:NVST) at the end of 2019.
Those businesses that remained under the Danaher name were less reliant on one-off transactions in favor of recurring revenue. Businesses with predictable, recurring revenue typically command much higher valuations than more traditional ones with sales that may or may not be repeated.
The apple doesn't fall far from the tree
When it was spun out in 2016, Fortive was quickly dubbed "Danaher 2.0" thanks to its rapid acquisitions of ISC, Landauer, Gordian, Accruent, and ASP. These businesses bolstered Fortive's industrial offerings with such products as on-the-job gas and radiation monitoring and software to manage facilities, assets, and construction costs. The company fulfilled its legacy as a miniature version of its former parent in September 2019, announcing it was also splitting itself into two businesses.
For their part, Fortive investors have seen an 11.3% annual return since its July 2016 debut, compared with 12.7% for the S&P 500. While the shares have only produced market-matching returns, Danaher investors who received them as a tax-free dividend have plenty to appreciate. The spinoff is only one part of the equation.
A rolling stone gathers no moss
Danaher's transactions over the past five years have all demonstrated its effort to concentrate around a portfolio of diagnostics, life sciences, and environmental solutions. The core of this portfolio began with the 2011 acquisition of diagnostics business Beckman Coulter for $6.8 billion. The company has continued building this segment through acquisition, completing a series of deals worth $20 billion since 2015.
To understand not only how investors have fared but how they are positioned for the future, it is instructive to look at two of the metrics that drove the spinoff: revenue growth and profit margins.
Metric Danaher Fortive
Revenue Growth
2019: 5.1%
2018: 9.9%
2019: 13.4%
2018: 12.1%
Operating Margin
2019: 20%
2018: 19.3%
2019: 13.7%
2018: 18.3%
The results are mixed. While Fortive has been growing faster, Danaher does produce higher profit margins. To make a more apt comparison, we can compare Danaher's overall life sciences business as reported by the company to that same business without acquisitions -- the "core" business. This is a better apples-to-apples comparison.
Metric Life Sciences Life Sciences (Core) Fortive
Revenue Growth
2019: 7.5%
2018: 13.5%
2019: 7%
2018: 7.5%
2019: 13.4%
2018: 12.1%
Operating Margin
2019: 20.2%
2018: 19%
The company does not break this out
2019: 13.7%
2018: 18.3%
Once again the results are mixed. It's clear that the retained life sciences unit is more profitable, but Fortive, despite being spun off as the slower-growing business, is expanding faster. Based on the numbers above, you might expect Danaher's stock to be doing no better than, or even lagging, Fortive's. You would be wrong. Danaher stock is up 154%, or 25% annually, since the Fortive spinoff.
Recall the effects of recurring revenue? Now let's look at how the market is valuing each company. The price-to-sales (P/S) ratio is a useful valuation measure that compares the market cap of a company to its annual revenues. Typically, this ratio increases along with the predictability of sales.
Company 2016 P/S 2020 P/S
Fortive 3.0 3.7
Danaher 2.4 8.0
Sealing the deal
Danaher has has bought, sold, and spun off businesses to generate incredible shareholder returns, and it has built a reputation as a home to management gurus. After splitting the business in 2015, management doubled down on faster-growing, more profitable businesses with predictable revenue. Despite mixed financial results, the market has rewarded the moves by significantly increasing the valuation. Management has proven that investing in Danaher is a long-term commitment that pays off; however, given the recent run up, healthcare investors should wait for a better opportunity to acquire shares.
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American Tower, Mastercard - >>> 2 Stocks I'm Never Selling
by Royston Yang
Motley Fool
Sep 18, 2020
https://www.fool.com/investing/2020/09/18/2-stocks-im-never-selling/
Finding great companies to buy is just half of the equation when it comes to investing. The other half is holding on to them through thick and thin as they go on to grow and compound your money over years, or even decades. A big problem I've noticed with many investors is their tendency to sell an investment that's been doing splendidly, only to regret their decision when the stock continues to make multiple new all-time highs as its business booms.
Granted, there may not be many companies out there that are worthy of long-term investment. With the world changing so quickly and technology enabling new business models to emerge, it can be tough to filter out businesses that can stand the test of time. Some attributes I look out for include a strong competitive moat, a recognizable brand, and a track record of adaptability and resilience during crises.
Here are two stocks that I believe possess the above criteria, and both have a great chance of posting consistent multi-year growth.
American Tower
American Tower (NYSE:AMT), which is structured as a real estate investment trust (REIT), owns and operates a portfolio of around 181,000 communication towers that are leased to telecommunication companies and wireless service providers. The company has expanded its portfolio steadily over the years through a combination of acquisitions and organic growth, and has also posted consistent dividend growth of around 20% year over year in the last three years.
The driver for American Tower's growth is the capital expenditure incurred by network operators to increase their coverage and serve customers. With the proliferation of smart phones and mobile devices, these operators need to constantly upgrade their networks to ensure seamless connections. CEO Tom Bartlett mentioned in the company's recent conference call that network service providers in international markets where the REIT operates are expected to spend around $30 billion this year alone, effectively doubling the total addressable market for American Tower's U.S. market.
The coronavirus pandemic has accelerated the shift toward digital applications and led to significant strains on existing mobile networks due to a surge in data usage. American Tower expects to build around 500 new communication sites across Latin America to cater to this increase in demand, while India is expected to spend significant sums of money to improve its networks. These are just some examples of the strategic initiatives investors can look forward to.
And let's not forget that the installation of 5G networks is in the cards for many countries. With speeds up to a hundred times faster than current networks and promising much less lag, this next generation of internet connectivity will push telecommunication giants to incur tremendous spending in the next decade. American Tower is well-poised to enjoy the benefits from this trend and the conversion from 4G to 5G acts as a strong catalyst for the business to continue growing its earnings and dividends.
Mastercard
Mastercard (NYSE:MA) is a financial services giant with over 2.6 billion credit and debit cards in circulation globally. The company's strong brand name and dominance have allowed it to grow steadily over the years as one of the leading players in this industry. Although COVID-19 has led to a plunge in consumer spending since April, the company has been closely monitoring transaction levels on a weekly basis and saw a gradual but sustained improvement in total transaction volume in August.
The company is also pioneering contactless payments for those who are worried about catching the virus. By leveraging its Shop Anywhere technology platform, Mastercard is piloting programs at several well-known retailers to test if this method of payment helps reduce wait times.
Despite the crisis, the payments giant continues to forge partnerships and collaborations with different businesses to expand its reach and garner a larger customer base. In July, the company expanded its cryptocurrency program and invited crypto-card partners to join Mastercard's Accelerate program, giving them access to resources and benefits to enable them to grow. Last month, Mastercard and TransferWise expanded their existing partnership to allow for the company's cards to be issued anywhere around the world that TransferWise is licensed, helping to further broaden Mastercard's reach.
And in a canny move to introduce customized payment solutions for consumers, Mastercard partnered with TSYS, a global payments company, to allow the consumer to have much more flexibility in deciding when to take up an installment plan, be it pre-sale, point of sale, or post-sale. These strategic initiatives will take time to bear fruit, but they demonstrate management's commitment to growing the business steadily, giving investors a lot to anticipate.
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Amazon, Procter & Gamble - 2 Stocks You Can Keep Forever
You should consider making these companies part of your core holdings.
Lawrence Rothman, CFA
Sep 17, 2020
As these turbulent times show, finding companies that show strength through challenging periods is tough. However, this is what separates the great companies from the merely good companies, and when you find one that does well in a variety of environments, you should hold on to the shares for the long haul.
After all, a forever holding period is not something you should take lightly. Here are two stocks that belong in that exclusive group.
1. Amazon
It is hard to believe that Amazon (NASDAQ:AMZN) was only founded 26 years ago, since the company has become such an integral part of our daily lives. It has certainly become far more than the bookseller it began as, now selling just about everything under the sun.
Amazon says it is looking to become "Earth's most customer-centric company," through tenets like obsessively focusing on the customer and having a long-term view.
There was a time when it was growing sales but not reporting a profit, since management kept investing in growth initiatives. Amazon is still forward-looking, but thankfully for shareholders, it now reports huge profits. In the last five years, its sales have gone from $107 billion to $280.5 billion. Over that same period, Amazon's operating income has grown nearly seven times from $2.2 billion to $14.5 billion.
It is much more than a retail website, though. For starters, there is its popular Amazon Prime subscription service which allows people to get faster delivery without paying an extra charge, plus a streaming service, for an annual fee. It also sells electronic devices like its Kindle and Alexa.
If that isn't enough, there's the Amazon Web Services business, its cloud computing division that helps companies with things like analytics. Accounting for about 12% of Amazon's annual sales, it is smaller than the North American and international retail segments. However, AWS has been growing faster than the other two, with a 35% sales increase last year.
With people staying at home and ordering goods online, Amazon's second-quarter sales growth was 40%, and the company went on a hiring spree. This indicates management believes that the increase in business is more than a temporary phenomenon. Online shopping was growing rapidly before the pandemic, but it has increased even more since governments ordered people to stay at home and forced other retailers to shut their doors.
Undoubtedly, the accelerating trend toward e-commerce will help the company over the long haul. Given what the company has accomplished in a relatively short period of time and its ability to disrupt industries (e.g. grocery) once it enters with its fast delivery and low prices, Amazon's prospects remain strong.
The only possible negative is the valuation. After the share price's 58% increase this year, the trailing price-to-earnings ratio is over 115. But when you are in a stock for the long haul, you can pay up for quality and withstand any short-term corrections.
2. Procter & Gamble
Procter & Gamble (NYSE:PG) has thrived for 183 years by selling a host of products like shampoo, shaving cream, razors, and laundry detergent. It has well-known, popular brands like Head and Shoulders, Gillette, Crest, Always, and Bounty, to name just a few.
This is a particularly good company if collecting dividends interests you. In fact, it has paid one since 1890 and increased the amount for 64 straight years. This makes Procter & Gamble a Dividend King, a member of the S&P 500 index that has raised its dividends for at least 50 consecutive years. Procter & Gamble's dividend yield is 2.3%. Its ability to increase its payouts through all kinds of economic environments should provide investors with a sense of comfort.
People staying at home boosted Procter & Gamble's results, with fiscal 2020 (ended June 30) adjusted sales increasing by 6%. However, even before COVID-19 started materially affecting results, its first-half sales, excluding acquisitions and divestitures, rose by 5%.
Management has taken steps over the last several years to continue the company's growth, such as selling brands that didn't fit with the overall company, and more recently, focusing on innovation. For instance, it recently launched Microban 24, a line of cleaning products that kill bacteria for 24 hours. The launch was well timed given COVID-19, and it couldn't keep up with demand. Management expects annual sales of about $200 million, which is ahead of its initial projection.
With strong brands, reinvigorated growth, and reliable dividends, this one's a keeper.
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>>> 3 Stocks to Buy and Hold for Decades
These three incredible stocks have multibagger potential if you hold them for decades.
Motley Fool
by Neha Chamaria
Aug 30, 2020
https://www.fool.com/investing/2020/08/30/3-stocks-to-buy-and-hold-for-decades/
Investing in stocks is one thing, and owning them for decades is another. Studies have shown how some stocks can make investors rich, even millionaires, if investors have had the patience to ignore the day-to-day meanderings of the market and own the stocks for decades.
Of course, stocks that you can own for such a long time must not only have proved their mettle but also must possess major growth catalysts to keep the momentum going. if you're already wondering where to find such stocks today that could make you so wealthy years down the line, check out the following three champions in their respective industries.
An under-the-radar stock with incredible prospects
American Water Works (NYSE:AWK) shares have risen nearly sixfold in the past decade, and almost eightfold with reinvested dividends. While past performance doesn't guarantee future returns, the stock has great chances to be a multibagger in coming decades for three key reasons:
A regulated business.
A well-defined capital expenditure plan for rate base growth.
Dividend growth.
American Water provides water and wastewater services to nearly 15 million customers across 45 states in the U.S. and parts of Canada. Its revenue is regulated, which means public utility commissions set the rates the company can charge customers for its services. That eliminates much of its top-line volatility, allowing American Water to generate stable cash flows and pay regular dividends.
This past April, American Water increased its quarterly dividend by 10%, in line with its dividend policy of aligning "dividend increases with long-term earnings-per-share growth, and to provide for a target payout ratio between 50 to 60 percent of net income." That payout ratio range makes the stock's dividends very safe.
But if you're wondering how a company whose service rates are regulated can grow, here's the thing: A regulated utility is required to regularly upgrade, modernize, and expand its infrastructure to win timely approvals for any proposed rate hikes. American Water has big plans: It plans to pump $20 billion to $22 billion in capital investment over the next decade. In the medium term, the company expects its rate base -- the value of property used to provide services and on which rates are determined -- to grow at a compound annual rate of 7%-8% through 2024.
That rate base growth and capital investment should be good enough to propel American Water's earnings and dividends higher, making it a no-brainer stock to own for decades.
This secular trend could make many millionaires
Mastercard (NYSE:MA) is a fantastic stock to bet on a hugely promising secular trend -- cashless modes of payment (cards, digital wallets, mobile payments) replacing cash all over the world. While e-commerce has been a major trigger for this shift, the coronavirus outbreak could prove to be the biggest impetus yet as customers skip brick-and-mortar shops to increasingly shop online, even forcing many stores to go virtual.
It's a trend that's here to stay, and as one of the world's largest payment processing companies, Mastercard stands to be a major beneficiary.
The key point to understand here is that Mastercard is a payments facilitator and not a lender. In other words, the Mastercard-branded credit and debit cards you and I use are issued by financial institutions and not the company. Mastercard simply facilitates transactions between parties like consumers, banks and financial institutions, and merchants over its payments-processing network. Every time someone uses a Mastercard card to make a purchase, the company earns fees.
It's a sustainable, high-margin business model -- Mastercard's operating margins have ranged well above 50% for several years now. Aside from transaction fees, the fintech company also has earns from ancillary services such as cybersecurity, data analytics, and loyalty reward programs. As of Dec. 31, 2019, Mastercard had 2.6 billion Mastercard- and- Maestro-branded cards issued worldwide, with aggregate purchases made through its cards amounting to a whopping $6.5 trillion during the year.
With an enviable lineup of top global companies as partners, a massive addressable market, and management's focus on technology-driven products, Mastercard is a classic buy-and-hold stock to own.
Healthcare is where real money is
Johnson & Johnson (NYSE:JNJ), the world's largest healthcare conglomerate with a hugely diversified portfolio, aggressive growth plans, and one of the best dividend track records in the sector is most likely to mint investors a lot of money in the decades to come.
Though better known for its consumer health products (think Neutrogena, Listerine, Band-Aid, Benadryl, Nicorette, and its namesake Johnson's brand), Johnson & Johnson generated half its sales from pharmaceuticals and nearly one-third from medical device sales in 2019. Not one to rest on its laurels, the company just made a massive growth move: Johnson & Johnson is all set to acquire Momenta Pharmaceuticals (NASDAQ:MNTA) in a humongous $6.5 billion all-cash deal to take a huge leap in immunology, one of the several pharma areas the company dabbles in.
Johnson & Johnson strives to create value through research and development spending over the years -- nearly 25% of its sales consistently come from products launched in the past five years. And the company's sales and cash flows have grown rapidly all through, supporting growing dividends that have driven shareholder returns higher.
Johnson & Johnson, in fact, is a Dividend King, or among the few companies to have raised dividends every year for atleast 50 years -- its latest dividend increase of 6.3% in April was its 58th annual increase. The stock currently yields 2.7%.
Johnson & Johnson has an incredible biotech pipeline among other things that should see the company grow leaps and bounds in the years to come. It's also the latest to join the race to develop a COVID-19 vaccine. With such an impressive history over its 130 years of existence and tremendous growth prospects, this stock's one for keeps.
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>>> Danaher Appoints Rainer M. Blair As President And CEO
Sept. 1, 2020
http://investors.danaher.com/2020-09-01-Danaher-Appoints-Rainer-M-Blair-As-President-And-CEO
Danaher Corporation (NYSE: DHR) ("Danaher" or "the Company") announced that the Company's Board of Directors has implemented its previously disclosed succession plan and appointed Rainer M. Blair as President and Chief Executive Officer and a member of the Board of Directors effective today, September 1, 2020. Mr. Blair's predecessor, Thomas P. Joyce, Jr., retired from these positions and will continue to support Danaher as a senior advisor through February 28, 2021.
ABOUT DANAHER
Danaher is a global science and technology innovator committed to helping its customers solve complex challenges and improving quality of life around the world. Its family of world class brands has leadership positions in the demanding and attractive health care, environmental and applied end-markets. With more than 20 operating companies, Danaher's globally diverse team of more than 67,000 associates is united by a common culture and operating system, the Danaher Business System, and its Shared Purpose, Helping Realize Life's Potential. For more information, please visit www.danaher.com. <<<
_______________________________________________________
>>> Rainer Blair is the President and Chief Executive Officer of Danaher Corporation. Beginning September 2020, Rainer has led Danaher’s $21B global, multi-industry portfolio of businesses. With the help of Danaher’s 67,000 global associates, he is focused on further strengthening Danaher’s position as a leading science and technology company.
Rainer is a dedicated leader and practitioner of the Danaher Business System, the company’s pre-eminent operating model and cultural foundation. He is deeply committed to the company’s Core Values and Shared Purpose: Helping Realize Life’s Potential. He has been a principle architect of Danaher’s associate engagement strategy and Diversity + Inclusion journey.
“Throughout Danaher’s history we have focused on exceeding the expectations of our shareholders, customers and associates globally. With a strong portfolio, experienced leadership team, and the power of the Danaher Business System, we have a bright future ahead.”
Rainer brings more than 30 years of deep and diverse experience to his current role. Rainer joined Danaher in 2010 and held leadership roles across several operating companies before being named Executive Vice President of Danaher’s Life Sciences platform in 2014. Through a combination of organic and inorganic growth investments, he helped Danaher build a portfolio of Life Sciences businesses uniquely positioned to reduce time to market and cost of biologic drugs. Under his leadership, the Life Sciences platform annual revenues increased five-fold to approximately $10 billion today.
Prior to Danaher, Rainer was President and CEO for MAPEI Americas, a $2.3 billion global, diversified construction chemical corporation. He previously spent 15 years with BASF Group on three continents with progressively larger leadership roles. He is U.S. Army veteran. He earned his B.A. from the University of Massachusetts - Amherst and his M.S. from Boston University. Rainer and his wife Alaine live in Alexandria, VA, and have three adult children.
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https://www.danaher.com/who-we-are/leadership-team
>>> Is Innovative Industrial Properties a Great Dividend Stock?
The cannabis company raised its payouts by 6% earlier this year.
Motley Fool
David Jagielski
Aug 23, 2020
https://www.fool.com/investing/2020/08/23/is-innovative-industrial-properties-a-great-divide/
Are you looking for a great dividend stock? They're often hard to find, and that's because it takes a lot to be one. The company needs to pay investors an above-average yield, it should increase its payouts regularly, and the dividend payments should also be safe. You want to be able to just buy the stock and not worry about it.
Today, I'll look at whether cannabis-focused Innovative Industrial Properties (NYSE:IIPR) hits all the checkmarks to be considered a great dividend stock. Let's take a close look at not just the company's dividend, but the strength of Innovative's overall operations, to assess whether you should invest in the company today.
Innovative's dividend yield of 3.5% is well above average
Currently, Innovative pays its shareholders a quarterly dividend of $1.06. At a price of about $120 per share, the stock's yielding a little over 3.5% today. If you were to invest in an average stock on the S&P 500, your yield would be closer to 2%. That's a big difference, and it's easier to see when you put it into dollars. A $25,000 investment at a 2% yield would earn you $500 each year. But at a rate of 3.5%, you'd be earning $875, or an extra $275 annually. Imagine you hold the dividend stock for 10 years, and you're now looking at a difference of $2,750. And that's without factoring in any dividend growth along the way.
Innovative has increased its dividend payments by more than 300% in just two years
Even if a dividend stock pays a decent yield today, you also want to consider its growth. If the dividend isn't increasing over the years, that means inflation will erode your payouts over time. Innovative is a real estate investment trust (REIT), meaning it has to pay 90% of its earnings back out to its shareholders. As long as profits continue to rise, so too will the company's dividend payments.
Innovative has been growing its dividend rapidly in recent years. Just two years ago, the San Diego-based company was paying its shareholders a quarterly dividend of $0.25. Payouts have more than quadrupled in value since then, rising 324%. The company's most recent rate hike, from $1.00 to $1.06, is a modest 6% increase and likely much more sustainable over the long term, if investors are wondering what type of increase might be more typical in the future.
However, there are never any guarantees when it comes to dividends. Investors always need to be prepared in the event that a rate hike doesn't happen, or is not as high as they had hoped. For now, at least, Innovative looks like a solid dividend growth stock.
Is Innovative's dividend safe?
On Aug. 5, Innovative released its second-quarter results for fiscal 2020, recording sales of $24.3 million. That's a year-over-year increase of 183% from the prior-year period, when its sales were $8.6 million. The big jump comes primarily as a result of Innovative acquiring and leasing out more properties than it had a year ago.
Since April, Innovative acquired a total of eight properties with rentable square footage totaling 775,000. At the end of June, Innovative owned 58 properties with a total of 4.4 million rentable square feet. A year ago, the company owned just 22 properties, and its rentable square footage then was 1.7 million.
Innovative's strategy involves acquiring distressed assets in the cannabis industry and then leasing them back to marijuana companies. It's been working well for the business and has helped generate strong streams of income. In Q2, Innovative recorded funds from operations (FFO) of $19.7 million -- up 321% from a year ago. FFO is a common substitute for net income when evaluating REITs, as it can give a better picture of the company's overall performance when factoring out depreciation and other adjustments.
FFO per share was $1.12 in Q2, and that suggests that Innovative's quarterly dividend of $1.06 is well supported by the company's current operations.
The dividend is great
With above-average payouts that have increased rapidly in recent years and some impressive sales and profit growth, Innovative checks off all the boxes of a great dividend stock and then some. And with more states potentially legalizing cannabis this year, there may be many more growth opportunities for Innovative to continue adding properties to its portfolio in the near future.
Year to date, the stock's been soaring above not just the Horizons Marijuana Life Sciences ETF (OTC:HMLS.F) but also the S&P 500:
Its incredible growth, along with a top dividend, makes Innovative an appealing investment to add to your portfolio today and hang on to for many years as the cannabis industry continues to expand.
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Danaher - >>> Beckman Coulter Launches SARS-CoV-2 IgM Antibody Test and will begin shipping to U.S. Diagnostics Labs
PR Newswire
August 24, 2020
https://finance.yahoo.com/news/beckman-coulter-launches-sars-cov-120000191.html
Serology test has confirmed 99.9% specificity and 98.3% sensitivity at 15-30 days post-symptom onset and measures antibodies to the receptor binding domain of the spike protein
IgM assay has 95.51% positive predictive value even when disease incidence is only 3%
BREA, Calif., Aug. 24, 2020 /PRNewswire/ -- Beckman Coulter, a clinical diagnostics leader, today announced the launch of its Access SARS-CoV-2 Immunoglobulin M (IgM) assay. The new IgM antibody test demonstrated 99.9% specificity against 1,400 negative samples and 98.3% sensitivity at 15-30 days post-symptom onset. Of the tests developed by the top four in vitro diagnostic manufacturers capable of delivering high-volume testing to the U.S., Beckman Coulter's test is the only SARS-CoV-2 IgM assay which targets antibodies that recognize the receptor binding domain (RBD) of the spike protein which SARS-CoV-2 uses to bind to a human cell receptor. This is significant as antibodies which target the RBD have the potential to be neutralizing and thus prevent future infection by blocking the virus from entering the cell.
"Our new SARS-CoV-2 IgM assay provides information about an individual's immune status with a positive predicative value of 95.5% in a population with disease incidence as low as 3%," said Julie Sawyer Montgomery, president of Beckman Coulter. "As COVID-19 outbreaks continue to grow in intensity in many of our communities, highly accurate tests such as this are critical for providing reliable information for both individual health decisions as well as population-based immunity monitoring."
Shamiram Feinglass, M.D., MPH, chief medical officer for Beckman Coulter, added, "At a time when a number of regions around the country are experiencing long wait times for testing due to shortages of molecular diagnostics (RT-PCR testing), antibody testing may play a key role in helping physicians determine if their patients have had a recent infection. Recent studies have identified asymptomatic individuals with a negative PCR test and a positive IgM test1 suggesting these patients may have had a low viral load or provided inadequate PCR samples. A positive IgM antibody test may help physicians identify some of these patients who received a false negative PCR result and should self-isolate until a follow up PCR test can be administered."
It has recently been reported that there are a number of states experiencing shortages of molecular diagnostics for the novel coronavirus, as well as backlogs on their analyzers due to high demand as infection rates surge. The Access SARS-CoV-2 IgM assay can help to alleviate this issue, as it helps to identify patients with an immune response to SARS-CoV-2.
Beckman Coulter's new IgM assay is part of a suite of testing solutions the company is offering to guide clinical and public health decision making during the COVID-19 pandemic. The company developed separate SARS-CoV-2 IgM and SARS-CoV-2 Immunoglobulin G (IgG) antibody assays to better help clinicians determine a patient's immune status in response to a recent or past infection. The Beckman Coulter IgM assay detects antibodies that may emerge earlier in the course of infection and then dissipate, while the IgG test detects antibodies associated with the longer-term immune response. Both IgM and IgG assays can identify antibodies in asymptomatic individuals, and since each person's seroconversion process is different, the two tests can be used together to provide the most accurate view into their immune response.
Beckman Coulter is also developing a SARS-CoV-2 quantitative IgG assay, antigen test and currently awaiting FDA Emergency Use Authorization for its interleukin 6 (IL-6) assay. Additionally, Beckman Coulter offers a biomarker that measures monocyte distribution width (MDW), which can be used as an aid in the early detection of sepsis in adult patients presenting to the emergency department. Earlier this year, the company announced that it received government funding to develop a machine learning algorithm to help accurately predict and detect sepsis in COVID-19 patients leveraging its MDW test. The quantitative IgG, antigen, IL-6 and MDW tests, along with the IgG and IgM assays, could provide valuable information in clinical decision making for patients suffering from COVID-19.
"COVID-19 presents as a complex, multi-system disease which requires multiple diagnostic tests to help monitor the disease progression of patients across multiple care settings," continued Sawyer Montgomery. "Our organization is working tirelessly to provide a multitude of high quality tests that help clinicians not only learn about each patient's disease status, but also the disease pathology of SARS-CoV-2 as a whole."
In many parts of the country, diagnostic labs are under immense pressure to be more efficient to meet testing demands. Beckman Coulter's assays can be performed in manual, automated or high-throughput immunoassay formats. The Access SARS-CoV-2 IgM test can also be run on Beckman Coulter's Access 2 analyzer, a compact, table-top analyzer enabling high-quality serology testing to be carried out in small hospitals and clinics. Additionally, this test seamlessly integrates into laboratory workflows making it easy to add serology testing to routine blood tests performed during inpatient and wellness testing.
With the ability to begin delivering more than 15 million tests each month, the company can meet the global demands of its installed customer base including more than 16,000 immunoassay analyzers worldwide, 3,500 of which are in the United States. For more information on Beckman Coulter's suite of testing solutions or its commitment to the fight against COVID-19, visit: www.BeckmanCoulter.com/Coronavirus.
About the Access SARS-CoV-2 IgM Assay
The Access SARS-CoV-2 IgM Assay is a qualitative immunoassay that detects IgM antibodies. The test has confirmed 98.3% positive percent agreement (sensitivity) at 15-30 days post symptom onset and 99.9% negative percent agreement (specificity). The assay utilizes an immunocapture format to bind patient IgM antibodies on the magnetic particle solid phase and a recombinant SARS-CoV-2 protein - enzyme conjugate to detect anti-SARS-CoV-2 IgM. The Access SARS-CoV-2 IgM assay can be used in Random Access Mode (RAM), which means that the antibody tests can be run along with other immunoassay tests. The assay can also be used with a variety of Beckman Coulter analyzers, including the high-throughput DxI 800 designed for large labs, to the DxI 600 for mid-sized labs and the DxC 600i and Access 2 analyzers for smaller labs and healthcare clinics.
About Beckman Coulter
Beckman Coulter is committed to advancing healthcare for every person by applying the power of science, technology and the passion and creativity of our teams to enhance the diagnostic laboratory's role in improving healthcare outcomes. Our diagnostic systems are used in complex biomedical testing, and are found in hospitals, reference laboratories and physician office settings around the globe. Beckman Coulter offers a unique combination of people, processes and solutions designed to elevate the performance of clinical laboratories and healthcare networks. We do this by accelerating care with a menu that matters, bringing the benefit of automation to all, delivering greater insights through clinical informatics and unlocking hidden value through performance partnership. An operating company of Danaher Corporation (NYSE: DHR) since 2011, Beckman Coulter is headquartered in Brea, Calif., and has more than 11,000 global associates working diligently to make the world a healthier place.
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>>> Else Nutrition Announces a Second Full-Scale Manufacturing Run and On-boarding of Retail Brokers for North American Launch
ACCESSWIRE
August 20, 2020
https://finance.yahoo.com/news/else-nutrition-announces-second-full-110000217.html
VANCOUVER, BC / ACCESSWIRE / August 20, 2020 / ELSE NUTRITION HOLDINGS INC. (TSXV:BABY)(OTCQB:BABYF) (FSE:0YL) ("Else" or the "Company"), a developer of plant-based alternatives to dairy-based baby nutrition, is pleased to provide an update on its North American product launch of its plant-based Toddler Nutrition product.
Else has engaged with additional retail brokers in order to bring the product to the shelves of natural food retailers (independent and retail chains), and to regional grocers. As a result of the engagements Else now has broker representation covering the entire U.S. West Coast, Arizona and Nevada, and the north East and Mid-Atlantic regions. Additionally, the Company hired a specialized broker for one of the largest U.S. retail chains with 1000 plus stores and a significant share in the baby food space.
Additionally, Else has commenced a second commercial manufacturing run. This manufacturing run will be 300% larger than the initial production run. As a result, Else will generate additional inventory to service the Company's expansion in the U.S. market by adding retail presence and increasing its capacity to generate online sales.
"We are very excited by the early response to our long awaited product launch and equally pleased to have to ramp up our inventory as we continue to see strong demand for our novel, clean-label, plant-based Toddler Nutrition product," said Ms. Hamutal Yitzhak, CEO and Co-Founder of Else. "We are grateful for the overwhelming positive daily feedback from parents all over North America and look forward to bringing the product to store shelves soon."
Else has completed the setup and order automation processes by signing up with a third-party logistics company. This company has warehouses across the U.S. and Canada which will support Else's e-commerce sales. Online order shipments have already commenced.
Else Nutrition's Plant-Based Complete Nutrition for Toddlers & Babies (12+ mo.) is now available for sale on Else's e-store at elsenutrition.com, and will soon be available on Amazon.com. Consumers can order single 22 oz cans and 4-packs.
About Else Nutrition Holdings Inc.
Else Nutrition GH Ltd. is an Israel-based food and nutrition company focused on developing innovative, clean and plant-based food and nutrition products for infants, toddlers, children, and adults. Its revolutionary, plant-based, non-soy, formula is a clean-ingredient alternative to dairy-based formula. Else Nutrition (formerly INDI) won the "2017 Best Health and Diet Solutions" award at the Global Food Innovation Summit in Milan. The holding company, Else Nutrition Holdings Inc., is a publicly traded company, listed as TSX Venture Exchange under the trading symbol BABY and is quoted on the US OTC Markets QX board under the trading symbol BABYF and on the Frankfurt Exchange under the symbol 0YL. Else's Executives includes leaders hailing from leading infant nutrition companies. Many of Else advisory board members had past executive roles in companies such as Mead Johnson, Abbott Nutrition, Plum Organics and leading infant nutrition Societies, and some of them currently serve in different roles in leading medical centers and academic institutes such as Boston Children's Hospital, Pediatrics at Harvard Medical School, USA, Tel Aviv University, Schneider Children's Medical Center of Israel, Rambam Medical Center and Technion, Israel and University Hospital Brussels, Belgium.
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Fortress Value (FVAC) - >>> Electric Vehicles, U.S.-China Trade and Commodities: Play Them All With 1 Stock.
Barron's
By Nicholas Jasinski and Al Root
July 20, 2020
https://www.barrons.com/articles/electric-vehicles-china-rare-earth-minerals-commodities-trade-spacs-merger-51595276024?siteid=yhoof2&yptr=yahoo
Electric-vehicle fever, U.S.-China geopolitics, commodity cycles, and special-purpose acquisition companies. A coming merger—that of Fortress Value Acquisition Corp. and MP Materials, an owner and operator of North America’s largest rare-earths mineral mine—will produce a stock that investors can use to play all of those forces.
Fortress Value (ticker: FVAC) is a special purpose acquisition company, or SPAC, backed by private-equity firm Fortress Investment Group. It announced an agreement last week to combine with privately held MP, valuing the miner at about $1 billion before proceeds. The deal will provide MP with the $345 million in the SPAC’s trust, in addition to $200 million from a private investment in public equity, or PIPE, from investors including Social Capital-founder Chamath Palihapitiya and Leon Cooperman’s Omega Advisors. After expenses, the cash will largely go to MP’s balance sheet to be invested in its next stage of growth.
This is a group of sophisticated investors putting real money into MP Materials, which will effectively go public through the transaction.
MP, which refers to the Mountain Pass mine in California, doesn’t produce just any old commodity. Rare-earth metals are 17 obscure elements at the bottom of the periodic table that show up in a variety of industrial, military, and technology applications. Rare earths include elements with strange names such as cerium, praseodymium, and neodymium, as well as superconductor component yttrium.
From time to time, rare earths come up in trade and economic-security arguments, because China dominates the market, producing about 60% of the global total. That is a large share, but rare earths are, well, rare. That 60% amounts to about 132,000 tons, a relatively insignificant quantity in the context of the global economy. The world’s production of copper—not even the metal in widest use—is about 20 million tons annually. The rarity makes them a factor in geopolitical calculations. U.S. officials have more than once referred to China’s heft in the rare-earths supply chain as a strategic threat.
The Mountain Pass site’s recent history involves now-defunct Molycorp, which began investing hundreds of millions of dollars in the mine around 2010. The timing was fortuitous for the fledgling company: Rare-earth metal pricing spiked in 2011 after China restricted exports. But trade restrictions eventually eased, prices fell, and Molycorp ended up filing for bankruptcy in 2015.
MP Materials was founded by part of the creditor group in the Molycorp bankruptcy restructuring. New owners can often acquire capital assets at a discount after the original operator goes bankrupt. That is what happened to satellite communications operator Iridium (IRDM). Also, Tesla (TSLA) bought its U.S. plant in Fremont, Calif., at a discount from General Motors (GM) during the financial crisis.
The growth of Tesla and other EV pioneers are also part of the MP story, but for a different, more important reason. Tesla is now the world’s most valuable car company, dwarfing century-old car makers such as GM, Ford Motor (F), and Fiat Chrysler Automobiles (FCAU). It has convinced investors that electric vehicles are the future. Nikola (NKLA), Fisker (SPAQ), and Hyliion (SHLL) have jumped on the trend, and are developing electric and hybrid cars and trucks. Each has merged or is planning to merge with a SPAC to go public.
But electricity-powered vehicles can’t move without high-end electric motors, which use magnets with rare-earth metals in them. Electric cars, with less than 2% global penetration of new-car sales in 2019, amounted to about 9% of total demand for MP’s rare-earth materials last year. That penetration of the global car market is expected to increase substantially in coming years, as consumers warm to the technology and governments around the world set EV targets.
James Litinsky is MP Materials’ chairman, and will also become CEO once the transaction closes later this year. He likens MP’s relationship with the EV developers as the entrepreneurs selling pickaxes and shovels to miners in the California gold rush of the mid 19th century. All EVs need electric motors, which need rare-earth elements for the magnets that make them work.
“Regardless of which EV company or battery technology wins out, we believe that rare-earth magnets are the best way to play electrification,” Litinsky says.
It might be, but MP doesn’t benefit directly from EV penetration any more than Alcoa (AA) benefits from the increasing use of aluminum in car bodies. But both companies indirectly benefit as the overall demand for the underlying commodities grows.
Growth is important for pricing and volumes and stock market success, but a miner and chemical processor are still in the commodity business. That means supply-demand dynamics are key. Being a low-cost producer is the best sustainable advantage. MP believes it has that moat, by virtue of having high ore grades, which require less work to get the same amount of metal. A 10% ore grade, for instance, requires 10 tons of material to be moved and processed to get a ton of salable product. A 5% ore grade means a miner is digging up and processing 20 tons of material for the same sales. More processing means more cost.
MP says its ore grade is about 8%. Lynas (LYC.Australia), an Australian rare-earth miner worth roughly $1 billion, says its ore grade at a key project is about 8% as well.
Ore grade is one part of the value equation, along with product mix. Right now, MP sends a concentrated ore to China for final processing. Management’s plan is to take the new capital from the SPAC merger and produce a finished product in the U.S. That would mean higher sales and margins than currently realized.
Business isn’t bad now, and it is cash-flow positive—not something that can be said about many of the newly public EV ventures. MP reported $10 million in adjusted Ebitda, short for earnings before interest, taxes, depreciation and taxes, during the first quarter. The company’s financial projections estimate $250 million in Ebitda by 2023, after the new processing plant is completed. Materials companies in the S&P 500 typically trade for about 10 to 11 times estimated next year’s Ebitda.
The deal with Fortress Value includes an earn-out for the sponsor shares in the SPAC, meaning that the postmerger stock price needs to rise to certain levels before sponsors can benefit. Half of Fortress Value’s 8.6 million postmerger shares—about 23% of the total—will now vest at $12, a quarter at $14, and a quarter at $16. That will reduce dilution for other shareholders, and underlines the fact that Fortress Value believes in the long-term potential of MP Materials, or else it wouldn’t have agreed to the earn-out.
A common fault for many SPACs is that sponsors can have more incentive to get any deal done than getting a good deal done. Fortress Value’s tweak to its sponsor shares is designed to address that criticism directly, and is a good sign for investors.
“When people talk with SPACs, the promote tends to be the elephant in the room,” says Andrew McKnight, CEO of Fortress Value and a managing partner at Fortress. “We wanted to get rid of that, and show that we really do believe in this asset.”
MP Materials’ current owners are also rolling over their entire stakes into the combined company rather than using it as a chance to cash out, another promising signal for investors.
Fortress Value stock spiked 10% on Wednesday after the deal announcement, but fell back slightly on Thursday and closed on Friday at $10.93. Shares rose 3.6% to $11.32 on Monday. The Dow Jones Industrial Average inched up less than 0.1% and the S&P 500 gained 0.8%.
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Global Clean Energy Holdings (GCEH) - >>> Oil Refiners Are Being Forced To Adapt Or Die
MarketWatch
Aug. 17, 2020
https://www.marketwatch.com/press-release/oil-refiners-are-being-forced-to-adapt-or-die-2020-08-17-61974549?siteid=bigcharts&dist=bigcharts&tesla=y
Aug 17, 2020 (Baystreet.ca via COMTEX) -- The International Energy Agency this week revised down its gasoline and jet fuel demand forecast for the rest of the year. In seemingly unrelated news, Philips 66 said that it is turning a San Francisco refinery into a biofuels plant. In separate news, Shell said it would permanently shutter a refinery in the Philippines. These news stories only seem unrelated at first glance. A deeper look shows they point to a changing industry. Refiners were among the worst-hit oil and gas industry segments in this crisis. Usually making their money from the price difference between crude oil and oil derivatives, this time refiners could rely on the usual stable demand for oil derivatives. The coronavirus pandemic slashed oil product demand and, consequently, refiners' margins.
Now, more than ever, refiners need to change to survive.
Consolidation and closures: this was what analysts expected would happen in the downstream industry as a result of the pandemic. It is already happening. Besides Shell, Marathon Petroleum earlier this month said it would idle permanently two refineries with a combined capacity of over 180,000 bpd of crude oil. More will likely follow: despite a strong rebound in gasoline demand in many parts of the world, jet fuel demand is yet to recover. This means the revenues associated with jet fuel sales will be non-existent for another year or two, or possibly more.
In this context, Philips 66's plan to close its Santa Maria refinery and transform the Rodeo refinery into what it says would be the world's largest renewable biodiesel plant makes perfect sense, especially when you add to the equation increasingly stringent fuel standards, particularly in California.
The state plans to reduce carbon emissions from transport by 20 percent over the 20 years from 2010 and 2030, the Wall Street Journal's Rebecca Elliott wrote earlier this week. This offers a strong incentive for refiners to switch to biofuels, and this incentive is crucial for such transformation. On the wider national market, renewable diesel fuel, a fuel produced from various waste oils, which is what Philips 66 will be making at the Rodeo refinery, only makes up about 1 percent of total diesel sales. Yet it seems California would be a lucrative market for it, as Marathon Petroleum and HollyFrontier also have renewable diesel plans for some of their refineries.
But California is just a single market, one might note, not enough to drive the transformation of a whole industry. Accurate as this may be, it is also a growing biodiesel market. None other than Exxon recently inked a renewable diesel supply deal with a company called Global Clean Energy Holdings, under which the supermajor will buy 2.5 million barrels of renewable diesel annually starting in 2022 to sell on the California market and other markets as well. California may be a single market, but it happens to be the world's largest market for renewable diesel. And it is giving away generous subsidies to biodiesel producers.
These developments suggest the pandemic's unprecedented effect on the oil and gas industry as a whole has made sector players wary of more nasty surprises and quick to snap up opportunities as they present themselves. At least, it has made some of them wary and ready to act sooner rather than later. Although many believe the worst is now over and the demand recovery refrain is frequently playing across headlines, all authorities that issue forecasts on oil and gas supply and demand have their own refrain: uncertainty remains; the future is unclear. Some will change and survive. Many will not.
So, besides biofuels plants, how are the refineries of the post-pandemic future likely to look? According to a Wood Mackenzie report from earlier this year, these will be complex facilities with a strong bend to petrochemicals. This is actually a continuation of an already present trend: with demand for crude oil as fuel expected to decline under pressure from EVs and other alternative fuels, petrochemicals are expected by many to become at some point the main profit-maker for refiners.
This future may not be even on the horizon yet as EV sales continue to only make a tiny part of total car sales, but the industry is preparing as governments step up their efforts to cut emissions. These changing fuel demand patterns, as well as the pandemic, have created a refining capacity excess. This excess will either have to be shut down or be repurposed, as a Stratas Advisers analyst told Bloomberg this week. There appears to be no third option, namely a strong recovery in oil demand and equally strong growth in this demand going forward. The adapt-and-survive imperative in refining says, "Convert or shut down your excess capacity".
There will continue to be demand for oil products, of course, including gasoline and diesel, for a long time to come. Demand could even begin growing from pre-pandemic levels at some point, depending on how the world handles the virus. But this is a doubtful scenario. It would be safer to prepare for one that is much more likely: another lower for longer, this time in fuels.
By Irina Slav for Oilprice.com
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>>> GrowGeneration Reports Record Financial Results Q2 2020
PR Newswire
August 13, 2020
https://finance.yahoo.com/news/growgeneration-reports-record-financial-results-110000282.html
Record Revenues of $43.5 Million, Adjusted EBITDA of $4.6 Million and Net Income of $2.6 Million
2020 Revenue Guidance Increased to $170-$175M
Adjusted EBITDA Guidance for 2020 is $17.0-$18.0M
GAAP Net Income Guidance for 2020 is $7.0-$8.0M
2021 Revenue Guidance Set at $245-$260M
Adjusted EBITDA Guidance for 2021 is $26.0-$28.0M
DENVER, CO, Aug. 13, 2020 /PRNewswire/ - GrowGeneration Corp. (NASDAQ: GRWG), ("GrowGen" or the "Company"), the largest chain of specialty hydroponic and organic garden centers, with currently 28 locations, today reported record revenues of $43.5 million and adjusted EBITDA of $4.6 million for Q2 2020. Q2 2020 was the Company's 10th consecutive quarter of record revenues. The Company also reported record GAAP net income of approximately $2.6 million for Q2 2020 compared to net income of $1.1 Million for Q2 2019. As we continue to outpace guidance, we are increasing 2020 revenue guidance to $170M-$175M and Adjusted EBITDA to $17.0M-$18.0M. Revenue guidance for 2021 is $245M-$260M. Adjusted EBITDA guidance for 2021 is $26M-$28M.
GrowGeneration Reports Record Financial Results Q2 2020
Record Revenues of $43.5 Million, Adjusted EBITDA of $4.6 Million and Net Income of $2.6 Million (CNW Group/GrowGeneration)
GrowGeneration Reports Record Financial Results Q2 2020 Record Revenues of $43.5 Million, Adjusted EBITDA of $4.6 Million and Net Income of $2.6 Million (CNW Group/GrowGeneration)
More
Financial Highlights for 2nd Quarter 2020 compared to 2nd Quarter 2019
Revenues up 123% to $43.5 million for Q2 2020 vs $19.5 million for Q2 2019
Same store sales were $25.1 million for Q2 2020 vs $16.9 million for Q2 2019, a 49% increase
Adjusted EBITDA of $4.6 million for Q2 2020 vs $1.7 million for Q2 2019, an increase of 166%, $.12 per share, basic
Gross profit margin % for Q2 2020 was 26.7% vs 29.9% for Q2 2020
Gross profit was $11.6 million for Q2 2020 vs $5.8 million for Q2 2019, an increase of 99%
Store operating costs as a percentage of sales was 9.2% for Q2 2020 vs 14% for Q2 2019, a decrease of 34%
Income from store operations was $7.6 million for Q2 2020 vs $3.1 million for Q2 2019, an increase of 146%
Income from store operations as a percentage of revenue was 17.5% for Q2 2020 vs 15.8% for Q2 2019
Corp Payroll and G&A as a percentage of revenue was 7.2% for Q2 2020 vs 7% for Q2 2019
GAAP net income per share, basic, was $.07 for Q2 2020 vs $.04 for Q2 2019
GAAP net income was $2.6 million for Q2 2020 vs net income of $1.1 million for Q2 2019 2020
Working Capital and Cash
Working capital was $35.2 million on June 30, 2020 vs $30.6 million at December 31, 2019
Cash on June 30, 2020 is $14.8 million, cash on December 31, 2019 was $12.98 million, and cash as of August 12, 2020 was $59.3 million
Proceeds from the sale of common stock and warrants was $282,000 for Q2 2020
On July 2, 2020, the Company completed the offering of 8,625,000 shares of its common stock generating $48.3 million in gross proceeds before deducting the underwriting discounts and commissions and other offering expenses. Oppenheimer & Co. Inc. acted as the sole book-running manager for the Offering. Ladenburg Thalmann & Co. Inc. and Lake Street Capital Markets, LLC acted as co-managers for the Offering
Recent Events
May 12, 2020, we opened our Store Support Center in Denver, CO
On June 16, 2020, the Company purchased the assets of H2O Hydroponics LLC. located in West Lansing, MI, creating a 15,000 sq. ft., $8.0 million operation in West Lansing, MI.
On June 29, 2020 GrowGeneration was added to the Russell 3000Ò Index
On July 2,2020 Oppenheimer & Co. Inc. acted as the sole book-running manager and closed on a $48.3 million Offering. Ladenburg Thalmann & Co. Inc. and Lake Street Capital Markets, LLC were acting as co-managers for the Offering
The Company surpassed $100 million in year-to-date revenues on August 10, 2020
On August 10,2020, the Company purchased the assets of Emerald City Garden, located in Concord, CA
On August 12, 2020, the Company entered into a partnership with Whole Cites Foundation, committing to donate free product to develop urban farms across the US
Darren Lampert, Co-Founder and CEO, said, "The Company's Q2 2020 record financial results reflect our continued focus on revenue growth and EBITDA expansion. Q2 2020 is the Company's 10th consecutive quarter of record revenues. Revenues were up 123% for Q2 2020 versus Q2 2019, to $43.5 million. Adjusted EBITDA was $4.6 million for Q2 2020 compared to $1.7 million for Q2 2019, an increase of 166% or $.12 per share, basic. Our same store sales were up 49% for the period Q2 2020 versus Q2 2019. Income from store operations was $7.6 million for Q2 2020 vs $3.1 million for Q2 2019, an increase of 146%.
Our online business increased by 149%, Q2 2020 versus Q2 2019. Our commercial division generated over $9.0 million in revenues, an increase of 142% Q2 2020 versus Q2 2019. The Company added 167 new commercial customer accounts from Q1, 2020 to Q2 2020 and now services over 700 commercial accounts. We continue to see strong demand for our products that include LED lights, nutrients, additives, soils and other products that outfit and feed grower's gardens. Our Sunleaves private-label nutrient and additives line of product is now generating over $100,000 a month in sales. Our weekly walk-in transactions are now 10,000, an increase of 50 %, quarter over quarter. On June 16, the Company successfully acquired H2O Hydroponics LLC, and consolidated it with our West Lansing operations into a new 15,000 sq. ft. super hydroponic garden center. The Company believes that the combined business will generate over $8.0 million in annual revenues in 2020.
Our mergers and acquisitions pipeline is the most active it has been since our inception. We have set a corporate goal to reach 50 stores and 15 states in 2021.
On July 2, 2020 we closed on a $48 million upsized follow-on public offering with Oppenheimer & Co. Inc. acting as the sole book-running manager for the Offering. Ladenburg Thalmann & Co. Inc. and Lake Street Capital Markets, LLC acted as co-managers for the Offering. The Company intends to use the net proceeds from the Offering primarily to expand its network of hydroponic/garden centers through organic growth and acquisitions, and for general corporate purposes.
On June 29, 2020, we were added to the Russell 3000® Index. We believe our Russell 3000 listing will increase long-term shareholder value by improving awareness, liquidity and appeal to institutional investors.
While we take this opportunity to announce our quarterly earnings, we are mindful of the COVID-19 plight which is besieging society, leaving no one unaffected. We are thankful for the dedication of health care workers and first responders, as well as the essential workers who are keeping our communities running.
As a result of our first-rate preparedness, all of our personnel have been working since mid-March with complete effectiveness. I have been inspired by the efforts and dedication of GrowGen's team as they have worked tirelessly to service our customers and communities.
The economic road ahead will challenge all businesses, but GrowGen's strong Executive Team, balance sheet and amazing employees put us on excellent footing to overcome adversity.
As we continue to monitor the COVID-19 situation, GrowGen is considered an "essential" supplier to the agricultural industry, suppling the nutrients and nourishment required to feed their plants. Accordingly, we are open during this difficult time and will remain open for the foreseeable future. We have plans and procedures in place to ensure our customers and employees stay safe during this time of uncertainty. All of us at GrowGeneration remain committed to the safety and well-being of our customers and employees and send our prayers and thoughts to all in the growing community.
GrowGeneration has partnered with Whole Cities Foundation and has committed to donate free product to local communities and their urban farms that have been severely affected."
Annual Guidance for 2020 and 2021
Full year 2020
Sales $170M-$175M
Adjusted EBITDA guidance for 2020 increased to $17.0M-$18.0M
GAAP pre-tax net income guidance set at $7M-$8M.
Full Year 2021
Sales $245M-$260M.
Adjusted EBITDA for 2021 is $26.0M-$28.0M.
Conference Call
The company will host a conference call on Thursday, August 13, 2020 at 9:00AM Eastern Time.
Participant Dial-In Numbers:
Toll-Free: (+1) 888-664-6383
*Participants should request the GrowGeneration Earnings Call or provide confirmation code: 28032517
About GrowGeneration Corp.:
GrowGen owns and operates specialty retail hydroponic and organic gardening stores. Currently, GrowGen has 28 stores, which include 5 locations in Colorado, 6 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida. GrowGen also operates an online superstore for cultivators, located at www.growgen.pro and www.growgeneration.com. GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers. Our mission is to own and operate GrowGeneration branded stores in all the major states in the US and Canada. Management estimates that roughly 1,000 hydroponic stores are in operation in the US. By 2025, the global hydroponics system market is estimated to reach approximately $16 billion.
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>>> GrowGeneration Corp. Acquires Concord, CA Based Emerald City Garden
PR Newswire
August 11, 2020
Adds 28th Store, Expands Northern CA Footprint
https://finance.yahoo.com/news/growgeneration-corp-acquires-concord-ca-120000199.html
DENVER, Aug. 11, 2020 /PRNewswire/ - GrowGeneration Corp. (NASDAQ: GRWG), ("GrowGen" or the "Company") the largest chain of specialty hydroponic and organic garden centers, with currently 27 locations, is pleased to announce that the company has purchased the assets of Emerald City Garden located in Concord, CA. Concord is located in the " green zone". With the acquisition of Emerald City Garden, GrowGen opens up the East Bay region. Emerald City Garden has been in business since 2012 and is one of the largest hydroponic operations in the region, with 2020 sales estimated to be approximately $4.0 million.
CEO Comments:
Darren Lampert, GrowGeneration CEO stated, "The Emerald City Garden acquisition is our 3rd in 2020,adding a strong team and customer base to our portfolio of hydroponic garden centers. Emerald City Garden, located approximately an hour outside of Oakland and San Francisco, strategically positions GrowGen to capture commercial growers and increase revenue through its sales, marketing and purchasing post our acquisition."
California Market and Projections:
In 2019, legal sales of adult-use cannabis in California topped $2.8 billion.
By 2022, the legal adult-use cannabis market in California is projected to jump to $5 billion – boosted significantly by California's recreational cannabis market. The California cannabis industry's total economic impact could be nearly $10 billion.
As of January 2020, California has issued over 10,000 commercial cannabis licenses. There are 7,551 active licenses, including 4,220 cultivators, 987 manufactures and 910 retailers, delivery services, 944 distributors, 243 microbusinesses, 129 transporters, 86 event organizers and 32 testing laboratories.
About GrowGeneration Corp.:
GrowGen owns and operates specialty retail hydroponic and organic gardening stores. Currently, GrowGen has 28 stores, which include 5 locations in Colorado, 6 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida. GrowGen also operates an online superstore for cultivators, located at www.growgen.pro and www.growgeneration.com. GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers. Our mission is to own and operate GrowGeneration branded stores in all the major states in the US and Canada. Management estimates that roughly 1,000 hydroponic stores are in operation in the US. By 2025, the global hydroponics system market is estimated to reach approximately $16 billion.
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>>> Hain Celestial's (HAIN) Transformation Strategy Bodes Well
Zacks
July 7, 2020
https://finance.yahoo.com/news/hain-celestials-hain-transformation-strategy-225810092.html
The Hain Celestial Group, Inc. HAIN appears strong on its sturdy transformational efforts. Its transformation strategy is aimed at simplifying portfolio, identifying additional areas of productivity savings, enhancing margins and improving cash flow. Strength in the company’s Project Terra and Stock Keeping Unit (“SKU”) rationalization also bodes well. Impressively, the natural and organic foods company’s shares have appreciated 42.4% in a year, against its industry’s 3.7% decline. A VGM Score of B further speaks of potentials of this Zacks Rank #3 (Hold) stock.
Let’s Explore
As part of its transformation efforts, Hain Celestial remains on track to simplify its business to focus on high-growth areas like core packaged-foods business. The company’s transformation strategy is adding to its solid quarterly performance, and such efforts are expected to help the company continue delivering robust margin performances.
In the third quarter of fiscal 2020, adjusted gross margin expanded 282 basis points (“bps”) to 24.3%, thanks to productivity efforts that resulted in lower supply-chain expenses. While adjusted operating margin rose 120 bps to 5.8%, adjusted EBITDA margin expanded 199 bps to 11%.
Additionally, Hain Celestial is on track with Project Terra, which is aimed at identifying global cost savings and cutting complexity. It expects to generate total cost savings worth $350 million through fiscal 2020 and remove complexity from business. To achieve these savings, the company intends to optimize plants, co-packers and procurement, along with rationalizing product portfolio. Meanwhile, the SKU rationalization has helped eliminate SKUs based on lower sales volume or weak margins.
Coming to Hain Celestial’s quarterly performance, the company put up a stellar third-quarter fiscal 2020 performance with a raised view for the fiscal year. In fiscal third quarter, the company delivered its third straight earnings beat and second consecutive positive sales surprise. For fiscal 2020, Hain Celestial expects adjusted EBITDA growth of 15-21% to $190-$200 million compared with the earlier projection of 7-16% growth to $177-$192 million.
Additionally, Hain Celestial envisions adjusted earnings per share of 75-82 cents, which suggests growth of 25-37% from fiscal 2019. Previously, management projected earnings per share of 62-72 cents, which suggested growth of 3-20%. The Zacks Consensus Estimate for fiscal currently stands at 79 cents.
Given the strong aforesaid factors, we expect Hain Celestial to continue with its robust show in the future.
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>>> Else Nutrition Receives Key Clean Label Certifications Ahead of U.S. Launch of Toddler Nutrition Product
CNW Group
July 7, 2020
https://finance.yahoo.com/news/else-nutrition-receives-key-clean-110000630.html
Plant-based, Clean Label and Soy-Free Certifications Granted
VANCOUVER, BC , July 7, 2020 /CNW/ - ELSE NUTRITION HOLDINGS INC. (BABY.V) (BABYF) (0YL.F) ("Else" or the "Company"), is pleased to announce that its novel, plant-based complete nutrition product for toddlers has received multiple key certifications.
Following successful production, consultations and reviews, the toddler nutrition product is now certified by the following leading independent organizations:
The Clean Label ProjectTM for being a certified clean label product.
NSF International (owned by the Plant-Based Foods Association) for being a Certified Plant-based product.
Beyond Soy for being certified as a soy-free product.
The certifying organizations apply independent and rigorous testing to ensure their certification meets a standard which enables transparency with respect to food and consumer product labelling and to preserve public health and safety for U.S. consumers.
Attaining these product certificates demonstrates Else's commitment towards creating and providing safe, clean label, plant-based, dairy-free and soy-free nutrition products.
This month, customers in the U.S. will be able to pre-order the full-sized Else Nutrition Plant-Based Complete Nutrition for Toddlers on the Else e-store at: www.elsenutrition.com.
"We are excited to be continuing on our pathway to commercialization. Obtaining these certifications is a major step as we prepare for our U.S. launch. This independent validation of our clean label product is a critical element of our go to market strategy and positioning," said Ms. Hamutal Yitzhak , CEO and Co-Founder of Else.
About Else Nutrition Holdings Inc.
Else Nutrition GH Ltd. is an Israel -based food and nutrition company focused on developing innovative, clean and plant-based food and nutrition products for infants, toddlers, children, and adults. Its revolutionary, plant-based, non-soy, formula is a clean-ingredient alternative to dairy-based formula. Else Nutrition (formerly INDI) won the "2017 Best Health and Diet Solutions" award at the Global Food Innovation Summit in Milan . The holding company, Else Nutrition Holdings Inc, is a publicly-traded company, listed as TSX Venture Exchange under the trading symbol BABY and is quoted on the US OTC Markets QB board under the trading symbol BABYF and on the Frankfurt Exchange under the symbol 0YL. Else's Executive and Advisory Board includes leaders hailing from Abbott Nutrition, Mead Johnson, Boston Children's Hospital, ESPGHAN (European Society for Pediatric Gastroenterology, Hepatology and Nutrition). Plum Organics, Tel Aviv University's Sackler Faculty of Medicine, and Gastroenterology & Nutrition Institute of RAMBAM Medical Center.
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