Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
>>> Amazon Aims to Sublet, End Warehouse Leases as Online Sales Cool
Company wants to shed at least 10 million square feet of space
Amazon spooked investors last month after saying it overbuilt
Bloomberg
By Spencer Soper
May 21, 2022
https://www.bloomberg.com/news/articles/2022-05-21/amazon-aims-to-sublet-end-warehouse-leases-as-online-sales-cool?srnd=premium
Amazon.com Inc., stuck with too much warehouse capacity now that the surge in pandemic-era shopping has faded, is looking to sublet at least 10 million square feet of space and could vacate even more by ending leases with landlords, according to people familiar with the situation.
The excess capacity includes warehouses in New York, New Jersey, Southern California and Atlanta, said the people, who requested anonymity because they’re not authorized to speak about the deals. The surfeit of space could far exceed 10 million square feet, two of the people said, with one saying it could be triple that. Another person close to the deliberations said a final estimate on the square footage to be vacated hasn’t been reached and that the figure remains in flux.
Amazon could try to negotiate lease terminations with existing landlords, including Prologis Inc., an industrial real estate developer that counts the e-commerce giant as its biggest tenant, two of the people said.
In a sign that Amazon is being careful not to cut too deeply should demand quickly rebound, the 10 million square feet the company is looking to sublet is roughly equivalent to about 12 of its largest fulfillment centers or about 5% of the square footage added during the pandemic. In another signal that Amazon is hedging its bets, some of the sublet terms would last just one or two years.
The company declined to say which space it plans to sublet or confirm the amount.
“Subleasing is a very common real estate practice,” spokeswoman Alisa Carroll said. “It allows us to relieve the financial obligations associated with an existing building that no longer meets our needs. Subleasing is something many established corporations do to help manage their real estate portfolio.”
Prologis declined to comment.
Amazon spooked investors last month after reporting slowing growth and a weak profit outlook that it attributed to overbuilding during the pandemic when homebound shoppers stormed online. At the end of 2021, Amazon leased 370 million square feet of industrial space in its home market, twice as much as it had two years earlier.
In the April earnings report, the company said it expected the excess space to contribute to $10 billion in extra costs in the first half of 2022. The company didn’t divulge how much over-capacity it had, where it was located or what it planned to do with it. Subleasing surplus space is one way for Amazon to trim costs on space it no longer needs.
Amazon tasked the real estate firm KBC Advisors to evaluate the warehouse network and determine where to sublet and where to terminate leases, two of the people said. Both options carry costs. Subletting warehouse space requires Amazon to remove all of its equipment so the new occupant can tailor it to their own needs. Lease terminations typically require the tenant to pay a percentage of the rent that would be due over the full term of the agreement.
It shouldn’t be hard to find tenants. The vacancy rate for industrial space is below 4%, an all-time-low, and rents were up 17.6% at the end of 2021, according to a February report from Prologis.
<<<
---
>>> Here's Why Costco's Competitive Advantage Is So Powerful
Motley Fool
By Neil Patel
May 8, 2022
https://www.fool.com/investing/2022/05/08/why-costcos-competitive-advantage-is-so-powerful/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
The thriving retailer's success can be attributed to one single factor.
When legendary investor Warren Buffett looks for stocks to own, he emphasizes businesses that possess some sort of competitive advantage. This key characteristic is important for long-term investors because it signifies a company does things better than its rivals, resulting in improved financials, faster growth, and hopefully a rising stock price.
Taking a look at Costco (COST 0.36%), we'll see a successful business that has gotten even stronger over time. The operator of warehouse clubs has one critical advantage that has allowed it to thrive throughout its history: its scale.
Let's take a closer look at what makes this company so special.
Costco is a massive business
For the second quarter of fiscal 2022 (ended Feb. 13), Costco posted net revenue of $50.9 billion. This is a gargantuan amount, and it makes the business, which today has 829 warehouses worldwide, the third-largest retailer in the world. Costco's sheer scale is why it has been such an outstanding investment.
Because a Costco location carries fewer than 4,000 stock-keeping units (SKUs) -- compared to tens of thousands at typical general retailers -- it is able to place bigger orders with its vendors. This bargaining power results in favorable inventory costs. A smaller retailer that sells toilet paper, for example, would pay more to its supplier on a per-unit basis than Costco does. This is a huge advantage.
"Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing, and accounts receivable," said CEO Craig Jelinek. "We run a tight operation with extremely low overhead, which enables us to pass dramatic savings to our members."
In summary, higher revenue translates to greater buying power with suppliers. And these savings attract more members, which ultimately results in higher sales. This virtuous cycle is unstoppable, and it's what makes Costco a one-of-a-kind business.
Focusing on the customer
Amazon founder Jeff Bezos built his company with a focus on customer obsession. I think Costco operates with the same playbook. The mentality is to always be trying to find ways to add more value.
As of Feb. 13, Costco counted 114.8 million memberships. In the U.S. and Canada, the renewal rate of 92% last fiscal quarter is excellent. This underscores the unquestionable value that consumers see in being a Costco shopper. Especially throughout the past couple years, having a membership during the pandemic has been a no-brainer, as people could purchase all of their necessities, like cleaning products and groceries, in one stop.
The company offers up a treasure-hunt atmosphere, where shoppers can find rare, unique deals on items that encourages visiting frequently, walking the entire store, and purchasing urgency. Costco is also known for its superb customer service, helping to drive more revenue.
Costco's relentless focus on the customer is clear by the fact that the average markup on merchandise is just 11%, far lower than 24% at Walmart and 35% at Home Depot. Because most of the profit comes from membership fees, which totaled $4 billion over the trailing 12 months, the business is able to keep a lid on prices. Again, it all goes back to Costco's colossal size.
This scenario has resulted in an unmatched customer value proposition. And when shoppers form habits around a business and what it offers, it's hard for that momentum to stop. Costco's massive scale has allowed the company to take care of its employees, customers, and shareholders. This powerful situation is why the stock has climbed 500% over the past decade.
While I think Costco shares are currently on the expensive side, with a price-to-earnings ratio of 40, it still remains one of the most outstanding businesses out there. Investors should keep the stock on their watch lists for now.
<<<
---
>>> Nike is the world's largest athletic-footwear brand. It's no slouch on the athletic-apparel front, either. The company is projected to sell more than $47 billion worth of goods this year, up nearly 6% from last year's tally, before accelerating top-line growth to almost 14% next year. Profits are growing similarly.
https://www.fool.com/investing/2022/03/16/3-worst-performing-dow-stocks-ready-bounce-back/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Simply put, it's a juggernaut.
Investors appear to have forgotten this of late. Share prices are down a third from November's highs, with the most recent selling linked to Russia's invasion of Ukraine and the economic effect the world's response is having on various sectors. Indeed, the stock's well into new 52-week low territory now and seems to still be going lower. Priced at only 25 times next year's consensus earnings estimate, though, Nike shares may be better-positioned to rebound than the market bears seem to think.
The key to this rebound is the company's slow-but-steady shift away from retailing partners and toward distribution self-sufficiency. In Nike's recently completed fiscal second quarter, $4.7 billion of that quarter's revenue came from its direct-to-consumer business. By bypassing retail stores, the athletic-apparel giant captures all of the difference between wholesale and retail pricing. Look for the organization to continue expanding its direct-to-consumer footprint, which should continue to benefit the bottom line.
Nike operates 116 stores in Russia, by the way, which the Wall Street Journal reports are closed for the time being. Those stores represent about 19% of all international stores Nike operates, so it could have some temporary effect on Nike's international business, which makes the direct-to-consumer alternative all the more important to Nike's continued success.
<<<
Costco Wholesale - >>> 3 Supercharged Dividend Stocks to Buy if There's a Stock Market Sell-Off
Motley Fool
By Alex Carchidi
Mar 11, 2022
https://www.fool.com/investing/2022/03/11/3-supercharged-dividend-stocks-to-buy-if-theres-a/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
If you're not familiar, Costco Wholesale ( COST 1.65% ) is a massive discount retailer and it's also a great dividend stock. The wholesaler's business is derived from bulk sales of groceries, consumer health goods, clothing, and its annual membership fees, not to mention a bevy of other products, all of which are distributed from its 828 warehouses worldwide.
And thanks to its focus on selling at a low cost and providing superior service, its loyal customers aren't likely to go elsewhere, even if there's turbulence in the economy. Of Costco's 114.8 million members, 92% opt to renew their membership each year, yielding the company $4 billion since the second quarter of 2021.
In the past 12 months, it sold $206.2 billion in goods. Over the last 10 years, its dividend rose by 187%, powered by 170% growth of the company's quarterly free cash flow (FCF) and a 126% rise in quarterly revenue in the same period. So it's safe to say that the management team is effective in executing the business model.
Its forward dividend yield is currently 0.6%, but that isn't the whole picture. Once every few years, Costco tends to hand out a special dividend, which sends its yield soaring temporarily. Therefore, buying the stock during a sharp downturn is a great way to build exposure to these massive special payments whenever they may happen down the line.
<<<
Costco, Dollar General - >>> 10 Dividend Paying Consumer Defensive Stocks
Insider Monkey
by Hamna Asim
April 4, 2022
https://finance.yahoo.com/news/10-dividend-paying-consumer-defensive-171318784.html
The consumer defensive sector includes companies that work in the food, beverages, household products, packaging, and tobacco sectors. These are referred to as consumer staples, given people do not stop spending on these products even when their income is limited.
Valuations in most sectors remain above historical averages, but the consumer defensive sector has valuations that are neither particularly expensive nor too cheap. The consumer defensive sector can fare well through inflationary periods, since higher costs can be passed on to customers. However, there is intense competition among the sector, which leads to limited pricing power. Charles Schwab has a neutral view on the consumer defensive sector.
Restaurants and entertainment establishments opening post pandemic has led to strong demand for wholesale food, which has helped the consumer defensive sector stay afloat, despite the uncertain economic outlook given the Russia-Ukraine crisis, rising rates, and inflationary pressure.
Wells Fargo remains positive on household products and beverage subsectors in 2022, whereas its stance on packaged food is neutral. According to the firm, packaged food can make a strong comeback if it focuses on healthier food choices, in line with customers’ demand. However, this change in strategy will take time to play out.
Some of the most notable consumer defensive stocks include The Coca-Cola Company (NYSE:KO), Kellogg Company (NYSE:K), and Walmart Inc. (NYSE:WMT), in addition to others discussed in detail below.
Our Methodology
We selected consumer defensive stocks that have a rich dividend history and have received positive analyst ratings as of late. Data from 900+ elite hedge funds tracked by Insider Monkey at the end of December 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Dividend Paying Consumer Defensive Stocks
Costco Wholesale Corporation (NASDAQ:COST)
Dividend Yield as of April 1: 0.55%
Number of Hedge Fund Holders: 57
Costco Wholesale Corporation (NASDAQ:COST) is an American merchandise retailer that sells sundries, dry groceries, liquor, electronics, health and beauty products, and hardware, among others. The company has presence in the United States, Canada, Mexico, the United Kingdom, Japan, South Korea, Taiwan, Australia, Spain, France, Iceland, and China.
On March 30, Oppenheimer analyst Rupesh Parikh maintained an Outperform rating on Costco Wholesale Corporation (NASDAQ:COST) and raised the price target on the shares to $620 from $580. The analyst overall believes that Costco Wholesale Corporation (NASDAQ:COST)’s short- and long-term prospects are positive. The company's business model is extremely well-positioned for the current macro environment, Parikh added.
Costco Wholesale Corporation (NASDAQ:COST) declared on January 20 a $0.79 per share quarterly dividend, in line with previous. The dividend was distributed on February 18, to shareholders of the company as of February 4. The company delivers a dividend yield of 0.55% as of April 1. Costco Wholesale Corporation (NASDAQ:COST) has increased its dividends consistently for the last 18 years.
According to the fourth quarter database of Insider Monkey, 57 hedge funds were bullish on Costco Wholesale Corporation (NASDAQ:COST), compared to 55 funds in the prior quarter. Fisher Asset Management held the biggest stake in the company, with more than 4 million shares worth $2.3 billion.
In addition to The Coca-Cola Company (NYSE:KO), Kellogg Company (NYSE:K), and Walmart Inc. (NYSE:WMT), Costco Wholesale Corporation (NASDAQ:COST) is a notable dividend paying consumer defensive name.
Here is what Ensemble Capital has to say about Costco Wholesale Corporation (NASDAQ:COST) in its Q1 2021 investor letter:
“We saw these dynamics at play in the Fund. Some of the worst-performing stocks this quarter were among our best performers in Q1 2020. Another example was the market’s reaction to Costco Wholesale (1.5% weight in the Fund) during the quarter. From December 31, 2020 to March 8th, Costco shares declined 17% and dropped below their pre-pandemic high. The common rationale offered by sell-side analysts was that Costco would face difficult one-year “comps” (i.e. same-store sales, which compare sales from stores open for at least a year). Because so many consumers rushed to Costco ahead of shelter-in-place and subsequent quarantines, it will be harder for Costco to meaningfully beat those results when compared year-over-year. That may indeed be true, but we struggle to understand how Costco could be “less valuable” than it was a year earlier when it concurrently increased its membership base by over 7%, or 3.9 million members. With membership renewal rates around 90%, the vast majority of the new customers Costco brought in last year will be around for years to come.
Analysts also complained about Costco raising its already industry-leading minimum wage to $16/hour, with an average “effective” pay of $23-$24/hour when you include overtime and bonuses. Costco paying its employees “too much” has been a common gripe of Wall Street analysts for at least two decades. While the extra pay does indeed impact short-term profit margins, it also serves to make Costco more durable, as its flywheel (i.e. a virtuous value cycle) starts with happy employees. A 20-year chart of Costco stock price is evidence that this strategy works and we’re confident that it will continue to work.”
Dollar General Corporation (NYSE:DG)
Dividend Yield as of April 1: 0.97%
Number of Hedge Fund Holders: 44
Dollar General Corporation (NYSE:DG) is an American retailer that operates a network of discount stores across the United States, selling clothing, cleaning supplies, home décor, health and beauty aids, pet supplies, toys, seasonal items, and groceries. The stock delivers a dividend yield of 0.97% as of April 1.
On March 17, Dollar General Corporation (NYSE:DG) declared a quarterly dividend of $0.55 per share, a 31% increase from its prior dividend of $0.42. The dividend will be paid on April 19, to shareholders of record on April 5.
BMO Capital analyst Kelly Bania on March 18 kept an Outperform recommendation on Dollar General Corporation (NYSE:DG) and lifted the price target on the stock to $265 from $250. According to the analyst, Dollar General Corporation (NYSE:DG)’s Q4 results were "solid" despite the "transitory" gross margin pressures. She sees a possibility for the company to return to its 10% EPS CAGR from present levels.
Among the hedge funds tracked by Insider Monkey, 44 funds reported owning stakes in Dollar General Corporation (NYSE:DG) at the end of December 2021, collectively worth $2.20 billion. Tim Hurd and Ed Magnus’ BlueSpruce Investments is the leading shareholder of the company, with 2.70 million shares worth roughly $637 million.
Here is what LRT Capital Management has to say about Dollar General Corporation (NYSE:DG) in its Q3 2021 investor letter:
“Executive Summary
At LRT Capital Management we are continuously searching the market for great investment opportunities. Our favorite finds are companies with moats and growth opportunities that justify a higher price than what the stock is trading for. One of our holdings (approximately 1.5% of our long exposure) is Dollar General (DG), so today, we wanted to tell you a bit about this great company.
Company Overview
Dollar General is a discount retailer with the largest brick-and-mortar presence in the United States by store count. The company’s largest concentration of stores can be found in the southern, southwestern, midwestern, and eastern parts of the United States.10 Dollar General was founded in 1939 by J.L. Turner, who originally named the company “J.L. Turner and Son, Wholesale”. As the name suggests, the company began its life as a wholesaler, but quickly turned to a retailer of general store goods. By the early 1950s, the company had annual sales of $2 million per year, which is the equivalent of $22.95 million in 2021 dollars when adjusted for inflation.
The first Dollar General store opened on June 1st, 1955 in Springfield Kentucky. The simple concept was that no item in the store would cost more than one dollar. The company changed its name to Dollar General Corporation in 1968 when Dollar General became publicly traded. At the time of its initial public offering, the business generated more than $40 million in annual sales. The company’s common stock was publicly traded from 1968 until July 2007, when it was taken private by KKR. The company went public again in November 2009, under the ticker DG.
Today, Dollar General is an evolved, and phenomenal business with more room for growth. Annual sales reached a record $33.7 billion in fiscal year 2021 after consecutively growing the top line for many years. The company’s main products are every-day necessities and consumables purchased by lower income consumers on tight budgets…”
<<<
Winmark - >>> This Retail Stock Is the Ideal Safety Play
Motley Fool
By Jason Hall and Matthew Frankel, CFP®
Mar 18, 2022
https://www.fool.com/investing/2022/03/18/this-retail-stock-is-the-ideal-safety-play/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
The company's business model is very cash efficient.
For most of the past 12 years, Winmark ( WINA -1.48% ) has been profitable and a market beater for investors. In this video clip from "The Rank" on Motley Fool Live, recorded on March 7, Fool.com contributors Jason Hall and Matt Frankel take a look at what has made this retail business so successful.
Jason Hall: I'm going to show a chart here, that to me says a lot about what makes this such an interesting company. This goes back to 2010. This is the end of the recovery coming out of the global financial crisis and what Winmark has done over that period.
You have a yellow, a purple, and a blue line here. The blue line is earnings-per-share, the yellow line is operating cash flow per share and then the purple line is just cash flow from operations. You notice that those lines move up and to the right very well together.
Now this dip right here, that was the coronavirus pandemic crash. Which closed down lots and lots of retail locations and have lots of investors concerned about a lot of different companies that were in retail. The point is that this company has been able to grow its cash flows per-share for a very long time. Are you guys curious what Winmark actually does?
Frankel: I know because I looked them up before the show.
Hall: [laughs] Play It Again Sports, Plato's Closet. [laughs] A few other retail brands like that, that are focused on used stuff. Winmark owns the brands and it works with franchisees that operate a lot of these locations. It's a great model, a licensing model, very profitable, very cash efficient, passes on a lot of the risk to the owners and the franchisors, the retail list. That's an interesting structure that they've built.
If you look at some of the most successful retail brands in history, a lot of their business has been built on franchising, like Starbucks ( SBUX 0.57% ) and McDonald's ( MCD 0.80% ) is just a couple of examples of franchises that have worked really well. There haven't really been a ton of franchises in retail goods though.
This is a model that works really well, so what do they do? You've got some used roller skates, your kids too big, does anybody wear roller skates? How about rollerblades? Does that work? A baseball glove, whatever. A used one, your kids grown out of it, you take it that Play It Again Sports, they will give you some cash for it.
Yet you've got a kid that wants to try a new sport or you want to try a new sport? Why go spend $1,000 on a brand new whatever, when you can go spend a few hundred dollars on a used one for the kid whose parents had him try the sport last year and didn't like it, and ended up selling it. You can buy these used goods, high-quality stuff. It's a great way to get sporting goods at a much-reduced price and also to get money for your use sporting goods once you're done with them.
Again, the model has done really well, it's been profitable, it's been a market beater for investors, and it's a solid company, it is. I'd say it's a safety stock because it's largely de-risked from a lot of the things that can be risky about retail. It's somewhat recession-resistant because again it's countercyclical when consumer discretionary goods like sporting goods, people they don't buy them during recessions.
If they want to buy that stuff, they're more likely to look for a discount like Play It Again Sports. It gives it some security, doesn't have very much debt at all. I think it has less than $50 million in debt. Cash efficient business. Those are safe investments to own.
<<<
Costco - >>> $5,000 Invested in These 3 Stocks Could Make You Rich Over the Next 20 Years
Motley Fool
By Selena Maranjian
Mar 12, 2022
https://www.fool.com/investing/2022/03/12/5000-invested-in-these-3-stocks-could-make-you-ric/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Costco has a winning formula likely to keep winning
These stocks are all down recently, but their growth prospects remain intact.
Many investors are looking to get rich quick, but the savvy among us realize that it's not likely to happen. Worse, many common attempts to get rich quick -- by purchasing penny stocks, for instance, or investing using a lot of margin -- tend to end up making people poorer, not richer.
The most reliable way to build wealth via stocks is to do so over decades. The most impressive stock performers in the market have often rewarded their longest-term shareholders the most. Even investing just $5,000 can turn out fairly well. If it averages, say, 15% annual growth over 20 years, it would grow to more than $80,000. An average growth rate of 20%, which is hard to achieve, would get you to more than $191,000. (Of course, investing that $5,000 regularly, or larger sums regularly, can produce more spectacular results.)
Here, then, are three companies that seem poised to perform very well over the long run. See if any or all of them interest you.
1. Costco
Let's start with the discount warehouse titan, Costco. You might think that it's not as exciting a stock as, say, Amazon.com or Apple, but its performance is not too shabby at all. Over the past decade, its stock has averaged an annual return of 20.4%, enough to turn a $10,000 investment into $64,045 -- and that's without reinvesting dividends.
Still, the future matters much more than the past when it comes to investing -- and Costco's future looks bright. It's designed to keep cranking out profits in large part by treating its employees, customers, and shareholders well. It pays above-average wages with above-average benefits, caps its markups on products at around 14%, and pays a dividend that, while not huge at 0.6%, has been growing at an annual average rate of 12%. Its Kirkland brand is well respected and known for quality, and its annual membership fees of between $60 and $120 deliver close to $4 billion in revenue. <<<
>>> Costco
https://www.fool.com/investing/2022/03/13/3-dividend-stocks-that-will-hold-up-no-matter-the/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
People always need essentials like food, toilet paper, and other home goods, no matter what the economy is doing. Furthermore, a bargain never goes out of style. That's why Costco is a safe-haven stock amid the market's pessimism.
Costco has a rock-solid membership business model that allows it to price its goods and services below any other major retailer, while generating most of its profit from membership fees. Last quarter, Costco's membership revenue of $967 million comprised the majority of its $1.81 billion in operating income, on $50.1 billion in sales.
Stripping out the membership revenue, the remaining operating margin was just 1.65%. You would be hard-pressed to find another retailer than can make it on a 1.65% operating margin. Even Walmart's operating margin was 3.86% last quarter.
Those low prices led Costco to post really strong 14.4% same-store-sales growth last quarter. And revenue could get even better this summer, too. That's because this summer will mark five years since Costco's last membership price increase.
Asked about a fee increase on the last conference call with analysts, CEO Richard Galanti noted that over the past 15 years, Costco has raised the price of its membership about once every five years. The last increase was in June 2017. If there is a membership fee increase, that could lead to even more profit for Costco in the year ahead. And amid rising inflation, it's a good bet that more people will sign up for Costco to get deals on food, electronics, and gas -- all the items experiencing high inflation right now.
While Costco's P/E multiple looks high at over 40 times earnings, it also grew operating earnings 35% last quarter. A fee increase would only supercharge that growth. And though Costco's dividend yield stands at a paltry 0.6%, the company has also paid out special dividends on top of that every few years. The last one was a $10-per-share dividend in December 2020, or a little less than 2% at today's stock price. Given Costco's pace of special dividends, another could be in the offing this year or next year.
<<<
$SFLM - SFLMaven is on its way to building an Amazon-style online collectibles marketplace soon as it gets a BIG sale on eBay. This company seems promising to the newbies as the price is still low!
$SFLM - On the Thursday night auction of SFLMaven on eBay, they sold $264k, amassing $302k for the week! Eagerly waiting for the next auction before the #Christmas. I think the upcoming auction gonna cross the highest sale amount of this year. Now waiting for their stock prices to go up.
Keeping Eye on their eBay store for upcoming Auction
http://ebaystores.com/sflmavenantiquesjewelryfineart
>>> Stamps.com to Be Acquired for $7 Billion
LA Business Journal
By Nat Rubio-Licht
July 19, 2021
https://labusinessjournal.com/news/2021/jul/19/stamps-com-acquired-7-billion/
El Segundo-based ecommerce postage company Stamps.com Inc. will be acquired by Thoma Bravo, a Chicago-based private equity firm, for $6.6 billion in cash, the companies announced July 9.
Thoma Bravo will pay $330 a share, a 67% premium on Stamps.com’s closing price of around $198 per share on July 8, the day before the merger was announced. The company’s stock skyrocketed 64% the next day, closing at around $324.
Stamps.com will become a private company and will be delisted from the Nasdaq. The acquisition is expected to close in the third quarter of 2021 and is subject to regulatory and stockholder approval.
Stamps.com will continue to operate out of its El Segundo headquarters after the deal closes.
“This transaction is a testament to the excellence and hard work of all of our employees and their relentless dedication to our customers and partners throughout the world,” Ken McBride, Stamps.com’s chairman and chief executive, said in a statement.
Ruhell Amin, sector lead at Playa Vista based independent advisory firm William O’Neil and Co., said the premium paid by Thoma Bravo was justified. It was only a matter of time, he added, before a private equity firm recognized the company’s value. According to Amin, Stamps.com has consistently been undervalued by public markets despite often beating analysts’ earnings expectations.
“I’ve always viewed Stamps being a bit of a juggernaut in the ecommerce space and always believed that the shares could eventually garner premium valuation,” Amin said.
Stamps.com has a 40 day “go-shop” period, expiring Aug. 18. During this time the company’s board and advisers can solicit and consider acquisition proposals from third parties and terminate the merger with Thoma Bravo if Stamps.com receives a “superior proposal,” the companies said in their announcement.
But Stamps.com said it would benefit from Thoma Bravo’s operating capabilities, capital support and technology and software sector expertise. The company’s board unanimously approved the merger and recommended its stockholders do the same at its upcoming meeting regarding the merger.
“With the financial and operational support of Thoma Bravo, Stamps.com can continue to innovate and pursue growth opportunities to capture the expanding ecommerce shipping market and extend our position as the leading global multicarrier ecommerce shipping software company,” McBride said.
The acquisition is one of several major purchases made by Thoma Bravo this year, including a $2 billion acquisition of cloud software company QAD Inc. in June and a $12.3 billion acquisition of security software company Proofpoint Inc. in April.
Thoma Bravo manages $78 billion in assets and is one of the largest private equity firms in the world. Its portfolio includes McAfee, Glendale-based ServiceTitan Inc. and Tripwire Inc.
The company said Stamps.com is well positioned to capitalize on long term trends in the ecommerce industry due to its management team, software solutions and growing customer base.
“The ecommerce landscape is rapidly evolving, and we look forward to partnering with the Stamps.com team to continue building on the company’s leading position in ecommerce shipping solutions,” Brian Jaffee, principal at Thoma Bravo, said in a statement.
Founded in 1996, Stamps.com was one of the first companies to offer postage online, allowing users to print official Postal Service stamps and shipping labels for a monthly fee of $17.99.
The company went public in June 1999 amid the dotcom bubble. As package shipment and ecommerce sales boomed amid the pandemic, Stamps.com saw earnings jump 33%, bringing in $758 million in fiscal 2020.
<<<
CHWY, ETSY, JD - >>> 3 Top E-Commerce Stocks to Buy Right Now
There's no letup in online shopping's potential.
Motley Fool
by Rich Duprey
Sep 3, 2021
https://www.fool.com/investing/2021/09/03/3-top-e-commerce-stocks-to-buy-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
E-commerce stocks were hit as retailers reported slower growth guidance.
Results still remain ahead of 2019, meaning investors can buy internet retail stocks more cheaply.
Online retail had a surprisingly difficult month in August as consumers got out of the house and went shopping in local stores instead. As a result, e-commerce stocks posted strong second-quarter results, but their guidance for the next reporting period was muted.
Amazon (NASDAQ:AMZN), for example, enjoyed revenue growth of 27% in the period compared to a year ago, but that was down from about 44% in the first quarter, and it forecast third-quarter growth would be around 13% at the midpoint of management's guidance range.
If mighty Amazon is seeing its growth slow, what hope do other internet retailers have?
Actually, e-commerce growth estimates remain robust for the current year and beyond, and the three internet retailers below should capitalize handsomely on the opportunity.
Chewy
Last year's lockdowns caused many consumers to acquire new pets, with veterinarians reporting a 50% increase in new pet visits between March and August last year, according to the American Veterinary Medical Association. The American Pet Products Association says consumers bought $103.6 billion worth of food, goods, and services for their pets in 2020, a 6.7% increase, with 47% of pet owners spending more online last year than they had previously.
That bodes well for online pet supplies retailer Chewy (NYSE:CHWY), which sold more than $7 billion worth of goods last year, up 47% from 2019 and more than double 2018's total.
With 20 million active customers, almost 6 million gained last year alone, Chewy will undoubtedly keep most of those even as the ability to shop in a physical store returns. It notes online penetration rates in food and supplies have grown from 7% in 2015 to 30% in 2020 and are expected to reach 53% by 2025.
Chewy's stock has bounced off the lows it hit earlier this year but remains 26% below the highs it hit in February. With a long runway of opportunity, Chewy is just waiting to be unleashed.
Etsy
Etsy (NASDAQ:ETSY) has also battled higher from its lows as it struggles against enormous pandemic-era gains. The COVID-19 outbreak had consumers racing to their keyboards to search for face mask availability. This online platform for handmade goods, vintage items, and craft supplies was the go-to destination. Reprising that starring role won't be easy, but Etsy is trying to make it look like it will be.
The online marketplace added almost 12 million new and reactivated buyers last quarter. The year-over-year growth rate was lower than in 2020, but the 8 million new buyers it added in the period was double the number it added in 2019.
Arguably more important was the number of so-called habitual buyers, or those consumers with six or more purchase days on the site, surged 115% in the quarter, also nearly double the pre-pandemic rate. Consumers who found Etsy are now using the site more often.
Wall Street is looking for Etsy to expand earnings at a compound rate of 53% annually for the next five years, suggesting the internet retailer's stock still has enormous growth potential.
JD.com
After China's latest crackdown on tech companies, investors were rightly nervous about e-commerce giant JD.com (NASDAQ:JD), particularly after the intense scrutiny Alibaba Group Holding underwent.
Yet JD.com has a different business model than its rival, actually more like eBay than Amazon, because it's a platform for third-party sellers rather than selling stuff itself. So while Beijing could go after it as regulators have with other tech stocks, JD.com believes the areas the government is targeting, such as user privacy, don't apply to the company. JD.com already has stringent protocols in place, after all. It could also benefit from the price controls regulators are contemplating, as this regulatory framework may protect JD.com's prices from being undercut by the competition.
After it reported robust second-quarter results, the market seems to have had a change of heart and is running JD.com's stock higher. Shares are up 10% over the past month and 30% above the lows they registered just days ago.
That's still OK for investors as Wall Street sees 30% or more potential upside in its shares. It was admittedly trading higher in the winter, but even analysts got cold feet and lowered their price targets on the stock after the crackdown. It's difficult to recommend Chinese stocks at the moment, but as JD.com continues to exhibit strength, we may very well see them hike their outlooks once more. This internet retailer could easily pick up where it left off.
<<<
>>> Bill Gates Just Bought Coupang (CPNG) Stock, Good Investment
Market Realist
BY MOHIT OBEROI, CFA
MAY. 24 2021
https://marketrealist.com/p/should-buy-coupang-cpng-stock-like-bill-gates/
The Bill and Melinda Gates Foundation Trust has disclosed a new stake in South Korean e-commerce company Coupang (CPNG). However, it has exited the stake in Apple and Twitter. Should you follow the foundation and buy CPNG stock?
The Bill and Melinda Gates Foundation Trust has bought 5.71 million shares of CPNG. The stake is valued at around $220 million at the current prices. Coupang went public in March and had a strong listing. However, it fell amid the sell-off in growth names. At one point, Coupang was trading below the IPO price of $35.
Coupang stock and the Bill and Melinda Gates Foundation Trust
The Bill and Melinda Gates Foundation Trust is the world’s largest charitable trust with assets of almost $50 billion. The foundation has put its trust in CPNG stock even though it has trimmed stakes in some of the other tech stocks.
CPNG stock valuation
CPNG stock trades at an NTM (next-12 month) EV-to-EBITDA multiple of 2.99x. The multiples have averaged 4.2x since the company went public and hit a high of 5.53x. The current valuation multiples aren't far away from the all-time low multiples of 2.5x. Since the stock only listed recently, we don’t have enough time-series data to arrive at a conclusion.
Is CPNG stock undervalued?
CPNG has backward integrated operations and it doesn't use third-party delivery services like other e-commerce companies. Also, we don’t have a real comp set for the company. While Amazon and Alibaba are also e-commerce plays, they have cloud operations as well. Incidentally, Amazon’s cloud operations account for most of its profitability.
CPNG valuation versus BABA and AMZN
Meanwhile, CPNG’s valuation multiples are at a discount to both Alibaba and Amazon. While Coupang is growing its top line at a faster pace than these companies, it's currently posting losses. Amazon and Alibaba are both posting profits.
Coupang stock forecast
According to the estimates compiled by TipRanks, CPNG has an average target price of $47, which is a premium of 23.6 percent over its closing prices on May 21. The stock’s highest and lowest target prices are $39 and $62, respectively.
Among the six analysts covering the stock, only two have a buy or equivalent rating, while the remaining four analysts have rated CPNG as a hold. Goldman Sachs is the most bullish brokerage on Coupang and has a street-high target price of $62.
Earlier this month, Coupang released its first earnings as a publicly traded company. While its sales were slightly ahead of the expectations, it posted a wider-than-expected loss in the quarter. Citigroup and Mizuho lowered the stock’s target price after the earnings release. Last week, Deutsche Bank upgraded the stock from a hold to a buy.
CPNG stock is a good buy.
Growth stocks have been out of favor with investors and CPNG stock has also been a casualty of the painful sell-off in growth names. However, Coupang has the market-leading position in South Korea and a strong brand in the country. After the IPO, it has enough cash to fund its growth and bridge the cash burn before the business starts generating positive free cash flows.
I think that Coupang stock is an attractive buy at these prices. It looks like a good way to play the e-commerce industry in South Korea at reasonable valuations.
<<<
>>> Coupang, Inc. (CPNG) owns and operates in e-commerce business through its mobile applications and Internet websites primarily in South Korea. It sells various products and services in the categories of home goods and décor products, apparel, beauty products, fresh food and groceries, sporting goods, electronics, and everyday consumables, as well as travel, and restaurant order and delivery services. The company was founded in 2010 and is based in Seoul, South Korea.
<<<
E-commerce is growing big!!! I'm sure that digital businesses that focus heavily on SaaS among others will grow steadily within the next 2 decades.
According to a study from the Office of National Statistics (UK), the overall amount e-commerce businesses and the digital industry as a whole earned in 2018 is roughly around 684 billion GBP. That's already over 30% of the UK's annual GDP alone.
With newer and more modern strategies like sales automation (detailed by guides like this), alongside other bits and pieces like marketing funnels, personalized ad campaigns, interactive marketing involving influencers and microinfluencers, e-commerce is set to overtake the market and be a large part of the world's economy. With more companies rising, there's no doubt in my mind that crypto will be the new money, and the digital world will be the new "real" world.
>>> Citing COVID-19, mall REIT Washington Prime Group lands in bankruptcy court
Retail Dive
June 14, 2021
Daphne Howland
https://www.retaildive.com/news/citing-covid-19-mall-reit-washington-prime-group-lands-in-bankruptcy-court/601754/
Washington Prime Group on Sunday filed under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. Thanks to "extensive hard-fought, arm's-length negotiations," the REIT — which launched when Simon Property Group spun off a collection of properties in 2014 — has a restructuring support agreement in hand, per court documents.
The restructuring agreement, led by investment firm SVP Global, would knock nearly $950 million off its balance sheet through the equitization of unsecured notes, and the use of $190 million to pay down its revolving credit and term loan facilities, per a press release. The RSA also contemplates a $325 million equity rights offering, which would go toward paying off secured debt.
Washington Prime Group said it's also secured $100 million in new debtor-in-possession financing from the creditors to support day-to-day operations during the bankruptcy process.
Washington Prime Group in its press release blamed the pandemic for its financial woes, but like the many retailers that have gone bankrupt over the last year and counting, its troubles likely started well before.
In fact, they may have begun on day one, considering that its properties are Simon rejects plus struggling properties acquired later in 2014 from Glimcher Realty Trust, which together form "essentially a pile of very weak and vulnerable malls," according to Nick Egelanian, president of retail development firm SiteWorks?. Egelanian calls such retail centers "junk malls."
"This is surely part of the story, i.e., the investors lose again," he said by email regarding the Washington Prime Group filing. "The other part of the story is the properties themselves. There may not be a single A or B property in the entire portfolio — meaning that we at SiteWorks rate them all as likely to be eventually liquidated. In this context, the fact that they are not spinning off enough revenue to keep the parent company solvent is not surprising at all."
The company's plans include two possible exit strategies: a debt swap or sale of assets, according to court documents.
<<<
Amazon - >>> Jeff Bezos to Step Down as Amazon C.E.O.
Andy Jassy, the chief of Amazon’s cloud computing division, will become chief executive, while Mr. Bezos, the company’s founder, will become executive chairman.
“Right now I see Amazon at its most inventive ever, making it an optimal time for this transition,” Jeff Bezos said on Tuesday.
The New York Times
By Karen Weise
Feb. 2, 2021
https://www.nytimes.com/2021/02/02/technology/jeff-bezos-amazon.html
SEATTLE — When Jeff Bezos founded an online bookseller named Amazon in 1994, he said the question that he was asked most frequently was “What’s the internet?”
Mr. Bezos answered by building Amazon into a $1.7 trillion behemoth that sold so many different items online it became known as “the everything store.” In the process, he upended the retail industry, turned Amazon into a logistics giant, and expanded into cloud computing, streaming entertainment and artificial intelligence-powered devices. For a time, he was the world’s richest person.
On Tuesday, Mr. Bezos, 57, said his run at the top of the Seattle-based company was over.
As Amazon reported its latest set of blockbuster financial results, Mr. Bezos said he planned to hand over the reins this summer and transition into the role of executive chairman. Andy Jassy, 53, the chief executive of Amazon’s cloud computing division, will be promoted to run the entire company. The change will be effective in the third quarter, which starts in July.
“As much as I still tap dance into the office, I’m excited about this transition,” Mr. Bezos wrote in an email to Amazon’s employees. As executive chairman, he said, he intends “to focus my energies and attention on new products and early initiatives.”
Andy Jassy, a trusted deputy who grew Amazon’s cloud computing business into a source of huge profits, will take over as chief executive.
The changing of the guard is set to ripple out beyond Amazon, which Mr. Bezos has personified for more than two decades. His impact on corporate America and his remaking of the way that goods are sold turned him into one of the world’s most influential technology and business leaders, as well known as the founders of Apple and Microsoft, Steve Jobs and Bill Gates. Mr. Bezos’ personal wealth also soared to $188 billion, which was surpassed only last month by Elon Musk.
In recent years, Mr. Bezos had stepped back from much of Amazon’s day-to-day business, delegating those responsibilities to two main deputies, including Mr. Jassy. He instead had focused on Amazon’s future and on personal projects. In 2013, he bought The Washington Post, and has said he spends more than $1 billion a year on Blue Origin, his space travel company.
Two years ago, he also got a divorce and became a fixture of tabloids, which gushed over his increasingly visible social life, including on superyachts owned by billionaires like Barry Diller.
But the pandemic pulled Mr. Bezos back into Amazon’s daily operations last spring. As Amazon grappled with a flood of e-commerce demand, labor unrest and supply chain challenges brought on by the coronavirus, Mr. Bezos held daily calls to help make decisions about inventory, talked to government officials and made a much-publicized visit to one of Amazon’s warehouses.
Amazon has now stabilized, and its growth has surged as more people have turned to e-commerce and the company’s Prime fast-shipping program, which has more than 150 million members. Amazon on Tuesday posted a record $125.6 billion in sales for the fourth quarter, while profits more than doubled to $7.2 billion from a year earlier. It was the first time the company had exceeded $100 billion in sales in a single quarter.
Amazon shows no sign of pulling back from its ambition to push into more corners of the economy. On a call with investment analysts, Brian Olsavsky, Amazon’s finance chief, said the times that the company had “pre-invested” ahead of future growth had paid off. He said Amazon would continue spending more on cloud computing infrastructure and groceries, and expand its logistics operations — especially its rapidly growing last-mile delivery network, which depends on half a million contract drivers to deliver packages.
Mr. Bezos is not expected to disappear from Amazon. “Jeff is really not going anywhere,” Mr. Olsavsky said, adding that the change was “more a restructuring of who is doing what.”
<<<
>>> Stock in ContextLogic, Wish.com’s Parent, Falls as Analysts Weigh In
Barron's
By Eric J. Savitz
Jan. 11, 2021
https://www.barrons.com/articles/stock-in-contextlogic-wish-coms-parent-falls-as-analysts-weigh-in-51610399115?siteid=yhoof2
Wish ranks among the top five shopping apps in multiple countries.
While 2020 was a spectacular year for initial public offerings, some deals were hotter than others.
While companies like DoorDash (ticker: DASH) Airbnb (ABNB), C3.ai (AI), and Snowflake (SNOW) had monster debuts, rallying sharply from their opening trades, that wasn’t the case for ContextLogic (WISH). The online deep-discount retailer, which operates under the brand name Wish.com, has been under pressure since it went public in mid-December at $24 a share.
ContextLogic’s stock peaked on an intraday basis at $24.75 a couple of days after the offering, but has never closed as high as the IPO price. The stock was down 3.5%, to $19.64 on Monday afternoon.
Wish has over 500,000 sellers, most of them in China. With over 100 million monthly active users in more than 100 countries. it ranks among the top five shopping apps in multiple national markets.
The post-IPO quiet period has expired, so nearly a dozen analysts picked up coverage of ContextLogic’s shares on Monday. Seven rate the stock at Buy, or the equivalent, while four rate it at Hold, or Neutral.
The bulls on the company see a strong mobile e-commerce play. UBS analyst Eric Sheridan, for instance, gave the stock a Buy rating and set a target of $28 for the share price. He says the company stands to benefit from several factors, including accelerating adoption of mobile commerce, and can be a play on emerging economies and cross-border transactions. He sees a target market of about 780 million households—those with internet access but household income under $75,000.
Oppenheimer analyst Jason Helfstein is bullish, as well. He set an Outperform rating and $30 target on the stock. “The company is well positioned as a leading value-oriented marketplace to benefit from the secular shift toward e-commerce for discount retailers,” he writes. “The relative under-penetration of eCommerce in discount channels can yield outsized momentum and greater potential for multiple expansion vs. other Internet marketplaces in verticals that are already further adopted.”
J.P. Morgan’s Doug Anmuth began coverage with an Overweight rating and $30 target. “Wish targets an underserved market, catering to value-conscious buyers, many with annual household income below $75,000, through affordable and mostly unbranded products,” he writes. The company has less than 1% of the global mobile e-commerce market.
Stifel analyst Scott Devitt has a more cautious view, giving the stock a a Hold rating and $22 target, a little below the IPO price. “Shares have fallen below the initial offering price of $24 and currently trade at a discount to the peer group as debates surrounding the issues of profitability, China-related risk, and the user experience and its long-term impact to growth are still to play out,” he writes. “While Wish possesses many of the attributes we appreciate in a global marketplace, we hold a neutral view while the current debates have yet to be resolved.”
In December, the company sold 46 million shares at $24 each, the upper edge of the range of $22 to $24 it had told investors to expect. Underwriters included Goldman Sachs, JPMorgan Chase, and BofA Securities.
Conversation Comments
Ale Carson
11 January, 2021
Amazon has already become the storefront for innumerable Chinese sellers, especially for higher value-added items. It would seem Wish.com's "opportunity" is to be an online closeout/job lot type of operation, selling low-priced items to a value-conscious crowd - without the inbuilt logistical expertise of Amazon. Not very investable IMO.
<<<
ContextLogic - >>> J.P. Morgan Predicts 30%-Plus Rally for These 2 Stocks
TipRanks
Wed, January 13, 2021
https://finance.yahoo.com/news/j-p-morgan-predicts-30-152540969.html
Basic physics, and the evidence of our own eyes, tells us that what goes up must come down. But the NASDAQ is over 13,000, and the S&P 500 is over 3,800, and some market watchers are starting to wonder where the ceiling is.
Banking giant JPMorgan investigates that question, seeking to find out just how much room the bulls have left to run in the current market conditions.
Looking back to the collapse of Lehman Brothers, and the financial crisis of 2008, the bank’s global markets strategist Nikolaos Panigirtzoglou notes that, among stocks, bonds, and cash, the average equity holding has been 42.3%. He points out that this ‘neutral’ level was breach in November, and equity allocations now are nearer 43.8%.
This increase from the average would imply that there may not be much room for stocks to keep going up – except that the post-Lehman equity allocation high, reached in January 2018, was 47.6%. To state the obvious, we’re not there yet. Panigirtzoglou sees the ongoing expansion of the M2 monetary base fueling the stock boom, and insulating it from changes in the bond markets.
Against this backdrop, JPMorgan analysts are pounding the table on two stocks in particular, noting that each could surge over 30% in the year ahead. We ran the the two through TipRanks database to see what other Wall Street's analysts have to say about them.
ContextLogic (WISH)
We will start with ContextLogic, the parent company of Wish.com. This e-commerce marketplace has become known for its social media ads, both for their ubiquitous presence and their entertainment value. Wish has a knack for drawing traffic and customers – it has become the third-largest online retail site it the US, with over 100 million monthly visitors and more than 150 million items listed for sale. The company’s revenue exceeds $2 billion annually.
The company's growth is being driven by several factors: the high monthly traffic, the large – and largely untapped – e-commerce customer base of low-income households looking for budget goods, and worldwide network of more than 500 million merchants.
WISH ran up a great deal of hype in December, when it held its IPO – and saw the price drop nearly 17% in the first trading day. The offering was priced at $24 per share, but the stock closed its first day trading at $20.05. Even so, the company still raised $1.1 billion in its first day on the market, and currently boasts a market cap of $14.5 billion.
Covering the stock for JPM, 5-star analyst Doug Anmuth wrote: "We believe Wish has significant growth potential with current penetration of ~3% of the global target market estimated at 1B+ households, and less than 1% share of the overall $2.1T global mobile commerce market. Wish utilizes data science to drive all aspects of its business from user acquisition to pricing to logistics, which helps the company stay nimble and should drive greater global scale over time. We expect Wish to deliver more consistent 20s%+ growth over the next couple years…”
To this end, Anmuth rates WISH an Overweight (i.e. Buy), and his $30 price target implies a 43% upside potential for the next 12 months. (To watch Anmuth’s track record, click here)
Wall Street is quite positive on this 'Moderate Buy' stock: WISH has received 8 'buy' and 4 'hold' ratings in the last three months. Running the numbers across the Street, the 12-month average price target lands at $26, representing about 24% upside potential. (See WISH stock analysis on TipRanks)
Passage Bio (PASG)
The second JPM pick we’re looking at is Passage Bio, a genetic medicines company. Passage is focused on developing treatments for rare, life-threatening, monogenic central nervous system disorders, using an adeno-associated virus delivery system. Monogenic disorders are caused by a mutation or defect in a single gene; the adeno-associated virus system is tailored to deliver a corrected gene directly into affected cells.
The company currently has three main drug candidates under development: PBGM01, a treatment for GM1 gangliosidosis; PBFT02, to treat frontotemporal dementia; and PBKR03 as a treatment for Krabbe disease. All three are in the IND-enabling phase of the development cycle, and the company announced earlier this month that PBGM01 has received FDA approval to advance to Phase 1/2 trial. PBFT02 and PBKR03 are both scheduled to initiate Phase 1/2 later in 1H20.
The upbeat outlook for Passage’s research program underlies the JPM stance on the stock. 5-star analyst Anupam Rama has upgraded his firm’s rating from Neutral to Overweight and set a price target of $35, indicating a potential ~34% upside on the one-year horizon. (To watch Rama’s track record, click here)
Backing his upgrade, Rama notes the FDA clearance on PBGM01 and writes, “[We] expect focus to return to the upcoming GM1 data mid-year, which will represent the key initial clinical catalyst for the company. Based on known pre-clinical data, we would look for the initial PBGM01 GM1 data to not only de-risk the program itself but also the company’s broader platform.”
The analyst consensus on PASG is not unanimous, but almost. The Strong Buy consensus rating is supported by 3 Buys against a single Hold. Shares sell for $26.25, and the average price target of $32.83 indicates an upside of ~25%.
<<<
>>> ContextLogic Inc. (WISH) operates as a mobile ecommerce company in Europe, North America, South America, and internationally. It operates Wish, an ecommerce platform that connects merchants and consumers. The company was founded in 2010 and is headquartered in San Francisco, California.
<<<
Hi, everybody. Please tell me the contacts of the qvc client service ?
>> Shopify is the un-Amazon we've been waiting for
https://www.fool.com/investing/2020/12/24/3-stocks-to-buy-and-hold-for-the-next-10-years/
It's possible you've used the Shopify platform without even realizing it. The company offers consumer-facing companies a variety of tools to help them manage and promote a direct-to-consumer e-commerce business.
Yes, the COVID-19 pandemic boosted its business. With the world scrambling to do more shopping online and less in stores, Shopify's revenue through the first three quarters of 2020 is 82% ahead of where it was at the same point a year earlier. The company even swung to a profit during the three-month stretch ending in September.
Shopify's growth, however, was solid before the pandemic took shape, and is likely to remain robust even after the crisis ends. That's because consumers and companies alike have grown weary of the control Amazon has on North America's e-commerce market. Digital Commerce 360 estimates that Amazon alone accounts for around one-fourth of all dollars spent online in the U.S. Office supply store chain Staples, consumer staples company Kraft Heinz, and apparel retailer Dressbarn are just some of the brands that have tapped Shopify to help them build an online presence.
This shift still has plenty of runway ahead of it, too. Market research company eMarketer estimates that direct-to-consumer sales in the U.S. will reach $17.8 billion this year, which is only a fraction of the more than $200 billion worth of product sales Amazon is apt to report for fiscal 2020. It's another 10-year project, but one that's worth the wait.
<<<
>>> Costco Wholesale Corporation (NASDAQ: COST)
Ray Dalio - >>> 10 Best Growth Stocks To Buy Now According To Ray Dalio
Yahoo Finance
Sorina Solonaru
November 26, 2020
https://finance.yahoo.com/news/10-best-growth-stocks-buy-220447261.html
Fifth in the list of the best growth stocks bought by Ray Dalio’s Bridgewater Associates is the American multinational Costco Wholesale Corporation (NASDAQ: COST). The fund purchased 218,662 COST shares worth $77.63 million at the end of September. 61 hedge funds were long in the stock at the end of Q2, down by 10% compared to the first quarter.
Costco is trading at a trailing P/E ratio of 43, according to Yahoo Finance, and the company’s latest e-commerce revenues figure is $26.05 billion. The biggest positions in the stock belong to Berkshire Hathaway and Fisher Asset Management, worth $1313.9 million and $995.4 million, respectively at the end of Q3. Saturna Capital Corporation, the investment management company of Sextant Mutual Funds, stated the following about COST in its Q1 2020 Investor Letter:
“For those not signed up for Amazon Prime, there’s still Costco, another firm in an enviable position when consumers are stocking for hard times.”
<<<
>>> Sea Limited (SE) -
https://www.fool.com/investing/2020/12/06/3-stocks-that-can-double-again-in-2021/
One of this year's hottest stocks is still not a household name for most U.S. investors. Sea Limited is a fast-growing provider of online platforms in Southeast Asia. It started out as a gaming company a little more than a decade ago, but it now also operates the region's top e-commerce hub, Shopee. Its Sea Money digital payment and wallet platform isn't moving the needle just yet, but it is the fastest growing business for Sea Limited.
Things could get interesting on the fintech front in 2021. Sea Limited was awarded a digital bank license in its home country of Singapore on Friday. Revenue nearly doubled in its latest quarter, and Sea Limited is running on all cylinders. Its flagship online gaming platform was the relative laggard, and even there it came through with a 73% year-over-year revenue surge. There are now 572.4 million players on the platform. The stock has soared nearly fivefold in 2020, but until it becomes a household name outside of its home turf the ceiling remains high. <<<
>>> Sea Limited (SE) engages in the digital entertainment, e-commerce, and digital financial service businesses in Southeast Asia, Latin America, rest of Asia, and internationally. It provides Garena digital entertainment platform for users to access mobile and PC online games, as well as eSports operations; and access to other entertainment content, such as livestreaming of gameplay and social features , such as user chat and online forums. The company also operates Shopee e-commerce platform, a mobile-centric marketplace that offers integrated payment and logistics infrastructure and seller services. In addition, it offers SeaMoney digital financial services to individuals and businesses, including e-wallet and payment services AirPay, ShopeePay, ShopeePayLater, and other digital financial services brands; and payment processing services for Shopee. The company was formerly known as Garena Interactive Holding Limited and changed its name to Sea Limited in April 2017. Sea Limited was founded in 2009 and is headquartered in Singapore.
<<<
>>> Warren Buffett dumps all his Costco stock — 3 reasons why that is a big surprise
MarketWatch
Brian Sozzi
November 16, 2020
https://finance.yahoo.com/news/warren-buffett-dumps-all-his-costco-stock-3-reasons-why-that-is-a-big-surprise-235600486.html
Warren Buffett has surprisingly exited stage left on one of the most dominant retailers on the planet: Costco (COST).
The Oracle of Omaha’s Berkshire Hathaway exited its remaining stake in Costco — 4.3 million shares —in the third quarter, according to a new 13-F filing on Monday. Berkshire began building its stake in Costco back in 2000.
Buffett’s move is surprising on multiple fronts. First, Costco is a business that is right in Buffett’s wheelhouse — an easy to understand retailer with a wide moat around its business. And two, Buffett’s righthand man Charlie Munger continues to sit on Costco’s board (since 1997).
Whether the exiting of the position in Costco signals Munger’s impending departure from Costco’s board (Munger is 96 years ago, after all) or Buffett’s belief Amazon (AMZN) is really the one to beat in retail’s future (he owns 533,000 shares in Amazon per the new filing) is unclear.
But here are several other reasons that Buffett’s sale of his Costco stake likely has caught a few folks on the Street off guard — and may be ill-timed.
A special dividend is here
Many analysts on the Street were eagerly awaiting Costco to finally enact a special dividend. Costco had an outsized $12 billion-plus in cash on its balance sheet compared to only $7.5 billion in total debt exiting its most recent quarter. So now was a good as time as any to reward shareholders.
And management did just that Monday at long last.
The retailer announced a $10 a share special dividend payable to shareholders of record as of December 2. It will be paid out on December 11. The payment will cost Costco $4.4 billion. Now that Buffett is no longer a Costco shareholder, he will miss out on a sweet dividend on a stock he has owned for 20 years or so. Why not just hold a little longer and get paid?
Costco’s business is rocking
Costco’s business of selling bulk merchandise to loyal members has been ideal for the COVID-19 pandemic. Members stocked up on food and cleaning products early on in the pandemic, and appear to be doing so again with infections back on the rise.
The company’s October same-store sales surged 14.4%. E-commerce sales rose a blistering 91%. Costco’s overall same-store sales have gained by mid to high double-digit percentages in the past five months, outpacing trends being seen at rivals Target and Walmart and hinting at market share gains pre-holiday.
“We continue to believe Costco is a core long-term holding and that it has so often showed that it can be a winner in different environments,” wrote JPMorgan retail analyst Christopher Horvers in a recent note to clients. “The company has been a consistent share gainer and we continue to prefer its higher income consumer.”
Horvers rates Costco shares at Overweight with a $406 price target (Monday’s closing price was $379.79).
Buffett could be leaving upside on the table as Costco knocks the cover off the ball this holiday season... as all indications suggest will happen.
Costco is loved worldwide... and having success
While Walmart (WMT) slowly pulls back from its international operations (see recent sales of majority stakes in its Japan and UK businesses) after years of struggles, Target focuses on the U.S. (it struck out in Canada), and Best Buy is OK with just doing business in the U.S. and Canada — Costco is proving its bulk-selling model works overseas.
International customers tend to go nuts when Costco opens because it’s so unique — just recall the insane response when the retailer cut the ribbon at its first store in China last year.
For the nine-months through October, Costco’s “other international” segment saw same-store sales explode 19%. By comparison, U.S. same-store sales rose 13.6%. Costco’s “other international” segment consists of 39 stores in Mexico, 29 in the UK, 27 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, three in Spain and one each in Iceland, France and China.
Costco operates 800 stores worldwide.
The strong foothold in overseas markets puts Costco in the catbird seat to widen its competitive moat versus others in retail over time. For Costco, that means more recurring revenue from global memberships to build more e-commerce capabilities and warehouses. It’s the ultimate shareholder value creating flywheel.
One flywheel Mr. Buffett is no longer riding on.
<<<
>>> Should You Buy Costco Before There's a Coronavirus Vaccine?
The warehouse retailer's business has held up in a tricky shopping environment, but it might not last.
Motley Fool
James Brumley
Oct 31, 2020
https://www.fool.com/investing/2020/10/31/should-you-buy-costco-before-theres-a-coronavirus/
Costco Wholesale (NASDAQ:COST) shares have easily outperformed the broad market in recent weeks. The last leg of that rally was prompted by its September adjusted same-store sales growth of 16.9%, accelerating from 14.1% last quarter. Analysts with Jefferies even upgraded the stock to a buy earlier this month, when the shares traded 33% above their late-March low, citing the company's widening "leadership moat."
Simply put, investors couldn't ask for much more.
There's a stumbling block that could trip up Costco stock's recent advance, however, particularly without a coronavirus vaccine ready to go. Several competitors have recently added new curbside pickup and delivery options, giving Costco's more cautious in-store customers a way to avoid the risk of infection. This is not a gaping liability. However, with Costco shares trading at a relatively rich valuation of around 40 times earnings (past and projected), these rivals' efforts could take just enough of a toll on the warehouse club's top line to reverse the recent rally.
No curbside pickup offered
Costco already had alternatives to in-store shopping before the pandemic took hold. Grocery delivery was an option, for instance, thanks to help from Instacart and Shipt.
The retailer has continued to adapt, though. During the earliest days of the pandemic, it acquired delivery service Innovel, bolstering its ability to deliver bulky goods. By April, it had tapped Instacart to handle domestic prescription deliveries. In July, Costco announced a new partnership with Instacart to offer same-day grocery deliveries in Canada. In-store pickup of online orders is also an option, even if only for a small set of nongrocery, discretionary goods -- and customers must physically enter the store to retrieve those items.
But curbside pickup of anything available inside any particular store? Forget about it. CFO Richard Galanti commented during last month's earnings call, "We have people here that study [curbside pickup] and maybe we'll surprise you one day, but at this juncture, we're not prepared to do that."
His rationale is reasonable enough...in-store shoppers tend to spend more per trip. There's also the cost involved. Costco earned a very modest 2.4% net margin in fiscal 2020: around its historical norm. Staffing a curbside pickup site would eat into those already-thin margins. Besides, Costco parking lots are generally packed with cars wrapped all the way around the building. There may not be space to add the nicety. Given the company's strong same-store sales growth recently, some investors may think it doesn't matter anyway.
Much has changed in just the past month, however. A bunch of new curbside pickup points have become available to Costco customers who may be mulling such a change. A major grocery rival also just launched an expansive delivery service. And there's more on the way.
Here come the alternatives
Walmart (NYSE:WMT) is one of those rivals, launching Walmart+ just last month. The highlight of Walmart+ is unlimited free grocery deliveries, currently available as soon as same day from 2,700 of Walmart's 4,753 U.S. stores, with more stores being added on a regular basis. Consumers are showing strong interest too. A recent Piplsay report found that 11% of the country's consumers had signed up for Walmart+ within the first two weeks of its mid-September availability,
Walmart isn't the only retailer upping its grocery game, either. Last week, Amazon (NASDAQ:AMZN) announced it was now offering curbside pickup for Prime members' online grocery orders at its 500-plus Whole Foods Market grocery stores, complementing its free two-hour delivery service for other online orders made by Prime members.
Even off-the-radar Albertsons (NYSE:ACI) -- which only offered curbside pickup at about 600 of its 2,252 stores as of the beginning of this year -- has turned heads. With 950 curbside pickup points now in place, the grocer touted year-over-year digital sales growth of 243% for the three-month stretch ending in September. The company is on pace to have curbside pickup up and running at about 1,400 stores by the end of fiscal 2020.
Costco's model is admittedly a bit different than those of Walmart, Albertsons, and Amazon. The warehouse retailer caters to a low-frills, bargain-minded shopper, driving more sales per square foot of selling space. These rivals won't necessarily earn their growth at the expense of Costco.
The palpable threat is the sheer scope of this competition, though. Costco operates fewer than 800 stores, most of which are in North America. Albertsons, Walmart, and Whole Foods alone collectively operate more than 7,000 stores just in the U.S., with curbside pickup and/or delivery being offered from more of them seemingly every day. Modest success for these rivals on these two fronts could take a noticeable bite out of Costco's growth.
Bottom line
There's no need to fear the worst. Plenty of Costco loyalists aren't thinking twice about COVID-19, and many who are worried seem to have found a new way to shop. Last quarter, Costco's e-commerce revenue surged more than 90%, even though that option is limited to Costco members as well.
With shares priced around 40 times its past and projected earnings and competitors turning up the heat on curbside and delivery, Costco stock offers more risk than reward right now. The number of new COVID cases in the U.S. is breaking records, which only makes these alternative shopping options more compelling. Investors may want to stay on the sidelines here and see how things shake out.
<<<
Shopify - >>> Where to Invest $5,000 Right Now
Make your money work for you with these great stock picks.
Motley Fool
by Neha Chamaria
11-14-20
https://www.fool.com/investing/2020/11/14/where-to-invest-5000-right-now/
An appealing e-commerce stock
E-commerce was already taking off before it got a tailwind from the coronavirus pandemic, which has driven more people and merchants online than ever. Shopify (NYSE:SHOP) has been a big beneficiary thanks to its platform, which enables merchants of all sizes to set up online stores, manage inventory, track payments, and run ads.
Shopify knocked it out of the park in the third quarter, reporting record gross merchandise volume, revenue, and operating income. A record number of merchants also became paid Shopify subscribers during the quarter, signaling the platform's stickiness, which is crucial for an e-commerce company.
Shopify also expanded its social media offerings by launching its TikTok channel for merchants to market their products on the rapidly growing social media app. In Q2, Shopify joined forces with Walmart and enabled merchants to customize storefronts within Facebook and Instagram.
Shopify's war chest -- it held $6.12 billion in cash, cash equivalents, and marketable securities as of Sept. 30, 2020 -- provides plenty of room to innovate and pursue growth opportunities within a massive addressable market. It's a compelling growth stock to consider.
<<<
Shopify - >>> 3 Top Growth Stocks You Can Buy and Hold for the Next Decade
These growth stocks are potential multibaggers.
Motley Fool
by Neha Chamaria
Oct 17, 2020
https://www.fool.com/investing/2020/10/17/3-top-growth-stocks-you-can-buy-and-hold-for-the-n/
You need three things to buy and hold a stock for a decade: conviction, trust, and patience. You must be strongly convinced that the underlying company has solid growth catalysts for several years to come, trust that management will capitalize on those opportunities and unlock greater shareholder value, and be patient enough to hold onto the stock through volatility to reap rich returns years down the line.
If you think you can do it, here are three top growth stocks riding on three separate megatrends that could make you crazy rich only if you buy and hold them for a decade -- preferably even beyond.
Ride this energy shift
Renewable energy is changing the dynamics of the global energy sector. Among all the energy sources in the U.S., renewable energy grew the fastest, at a nearly 100% clip between 2000 and 2018, according to the Center for Climate and Energy Solutions. Further, renewables are projected to make up 45% of global electricity generation by 2040, up from only about 26% in 2018.
You probably already know how the world's biggest companies are already making the shift. Amazon, for example, strives to power its operations with 100% renewable energy as early as 2025.
Given the backdrop, renewable energy stocks are compelling buys for at least the coming decade. Consider Brookfield Renewable Partners (NYSE:BEPC)(NYSE:BEP), one of the world's largest owners and operators of renewable energy assets, worth $50 billion.
Brookfield typically buys value assets, develops and turns them around, where necessary, to make them profitable, and eventually monetizes mature assets to reinvest the proceeds opportunistically. Through recent acquisitions, the company has expanded significantly into solar and wind, although hydropower generates 66% of its cash flows. Brookfield has an incredible track record of cash flow generation, as evidenced in its dividend growth: The stock's dividends have grown at a compound annual rate of 6% in the past 20 years.
In the coming decade, Brookfield shares could easily generate annualized double-digit returns for three major reasons:
Brookfield has 18,000 megawatts (MW) of renewable capacity under development.
Management is targeting 6%-11% growth in funds from operations.
It aims to grow its annual dividend by 5%-9%.
Brookfield's development pipeline is not only among the largest in the world, but also nearly as large as its current capacity of 19,300 MW. If that should take care of growth, the fact that 95% of its cash flows are contracted should ensure cash flow resiliency, even through tough times. Whichever way you slice it, Brookfield Renewable looks like an easy multibagger stock in the making.
A megatrend poised to mint you money
The war on cash is raging, and it's only a matter of time before nations across the globe become cashless societies, as people ditch paper money for cards and other forms of digital payments. E-commerce, in particular, is a massive tailwind that should bolster the transition, opening up a world of opportunities for Mastercard (NYSE:MA).
Mastercard doesn't issue cards but facilitates transactions made through them on its payments-processing network. It's an incredibly asset-light, high-margin business model, as Mastercard earns a fee on every transaction made using its cards anytime, anywhere in the world. The advantage of network effects here is unmistakable -- the more cards issued by banks and financial institutions, the more value it adds to Mastercard.
Mastercard has 2.6 billion co-branded cards in global circulation and reported $7.3 billion in sales and an operating margin of 51% in the first half of 2020. Although the coronavirus outbreak hit its earnings, Mastercard's long-term story is getting even stronger as digital payments pick up, especially during the COVID-19 pandemic.
Meanwhile, management is savings costs, where possible, while pumping money into high-growth areas like business-to-business solutions and data and analytics. Mastercard's revenue from value-added services like data analytics, consulting fees, cyber and intelligence fees, and loyalty reward fees jumped 23% in 2019.
The global fintech industry is projected to grow exponentially in the coming years. With its solid global presence, partnerships with some of the world's biggest companies, suite of lucrative value-add services, and thirst to grow via acquisitions, Mastercard could earn multibagger returns for investors in the coming decade and beyond.
This e-commerce growth player won't fail you
E-commerce was already booming when the COVID-19 pandemic and ensuing lockdown and homebound lives added fuel to the fire. It was a huge blow for brick-and-mortar stores, as many were forced to shut shop. That's when Shopify (NYSE:SHOP) stepped in, helping merchants of all sizes set up online stores quickly with easy access to everything from inventory management to payments processing.
The results were visible in Shopify's numbers: In its second quarter, new stores created on its platform jumped 71% sequentially and its gross merchandise volume (GMV) soared 112% and revenue 97%, both year over year. GMV, which reflects the total dollar value of orders processed on Shopify's platform in a given period, hit $30.1 billion in the quarter, registering record growth since the company went public in 2015.
Meanwhile, Shopify continues to innovate. In Q2 alone, it launched channels enabling merchants to customize their storefronts within Facebook and Instagram and sell their products online on Walmart. It also expanded its contactless payments in Canada and saw 65% year-over-year growth in merchant cash advances and loans through Shopify Capital. The company also automated some areas of Shopify Fulfillment Network, its new logistics arm that's gotten off to a successful start.
With more than 1 million merchants across 175 countries already on board, Shopify has grown by leaps and bounds in recent years and will likely continue to do so as adoption of e-commerce further gathers steam. For patient investors in the stock, that could mean some solid returns in the coming years.
<<<
>>> Better Buy: Costco vs. Dollar Tree
Take a look at how two popular discount retailers stack up against each other.
Motley Fool
Jeremy Bowman
Oct 16, 2020
https://finance.yahoo.com/m/5bfc6c52-9b12-3ed0-bf04-d5cf88de48f3/better-buy%3A-costco-vs.-dollar.html?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article&yptr=yahoo
2020 has been a disastrous year for the retail industry, but there's one exception.
Essential retailers, especially those focused on consumer staples , have mostly thrived during the pandemic as consumers have flocked to such stores to stock up on goods like food and cleaning supplies. These stores have also benefited from consumers having limited options for spending money other places, as Americans have avoided things like travel and live entertainment.
Costco (NASDAQ:COST) and Dollar Tree (NASDAQ:DLTR) offer two such examples of recession-proof retailers, though they operate with very different business models. Costco is the world's biggest membership-based warehouse retailer, selling bulk goods at bargain prices. Though the company is known for value, its $60 annual membership fee means it appeals to a higher-income demographic than the typical discount chain. Dollar Tree, which also owns Family Dollar, specializes in selling $1 items like toys, books, games, and party supplies at Dollar Tree, and general discount items like food and sundries at Family Dollar.
As you can see from the chart above, Costco has outperformed Dollar Tree by a wide margin this year, but which is the better buy going forward? Let's take a look at what each stock has to offer today.
A rock-solid retailer
It's hard to find a reliable retail stock in this day and age, but Costco has delivered lockstep comparable sales growth for years as it adds new stores around the world, grows its membership base, and expands its profits.
Costco's sales have boomed during the pandemic, as it's been a popular destination for consumers still looking to do in-store shopping, and its e-commerce sales have surged. Comparable sales jumped 14.1%, excluding fuel prices and foreign currency exchange, in its most recent quarter, and e-commerce sales rose 91.3%. Earnings per share, meanwhile, jumped 27% as the company gained leverage from the increase in comparable sales. It also benefited from a boom in fresh food, which carries higher margins, and was able to pass along higher margins in gas as overall gasoline prices fell.
In September, Costco's momentum accelerated as adjusted comparable sales jumped 16.9% on a 90% rise in e-commerce sales.
While the membership-based chain is well-positioned for the current crisis, Costco has been a historic outperformer because of its unique model, which gives it a number of competitive advantages, including rock-bottom prices, and a loyal membership base with a retention rate around 90%. Costco also ranks among retailers with the highest customer satisfaction, and it pays employees above-average wages, helping to keep turnover low. That set of features has allowed Costco to grow steadily and fend off challengers like Amazon even as most other retailers have struggled.
A turnaround in progress
Unlike Costco, which came into the pandemic as a steady retail machine, Dollar Tree has been in the midst of a years-long restructuring following its 2015 acquisition of Family Dollar. The company has invested significantly in renovating Family Dollar stores, though performance has generally been below expectations and the stock has been flat for the last three years.
However, the COVID-19 pandemic seems to have given the business a shot in the arm. In the second quarter, companywide same-store sales rose 7.2%, with an 11.6% gain at Family Dollar as those stores tend to focus more on essentials. Even better, earnings per share jumped 45% in the quarter to $1.10, driven by same-store sales leverage, lower merchandise costs, and fewer markdowns, which more than made up for the $134.9 million in incremental COVID-19-related costs.
Dollar Tree also continues to aggressively open new stores, and the fallout in the retail industry could give it improved real estate options. For 2020, it plans to open 500 new stores, including 325 Dollar Tree locations and 175 Family Dollar locations. It's aiming for 750 Family Dollar renovations under its "H2" format, which includes expanded freezer and cooler doors, wider merchandise selection, and a selection of Dollar Tree items at $1. The company has more than 15,000 stores nationwide, making it one of the biggest retailers in the U.S.
Still, while the pandemic has been a tailwind for the company, questions remain about its ability to deliver growth once the economy normalizes, as shopping patterns may shift away from places like Family Dollar. In 2019, for example, the company only posted modest growth, and that may be why the stock is stuck in neutral despite solid profit growth this year.
Who's the better buy?
It's hard to ignore the consistency of Costco's performance and the strength of its business model, but investors will have to pay up for the stock. It now trades at a price-to-earnings (P/E) of 41.7, its highest valuation in about 20 years -- though that also reflects a stock market whose valuations are generally stretched. Dollar Tree, on the other hand, is priced much more modestly at a P/E of just 19.
For income investors, Costco is the only one that pays a dividend, currently yielding just 0.7%. But the company also has a history of paying generous special dividends.
Risk-seeking investors may prefer Dollar Tree, as the stock is cheaper and its turnaround strategy could pay off. Additionally, the company should benefit from the recessionary environment over the coming quarters. However, Costco looks like the much safer bet here, especially given Dollar Tree's erratic performance in recent years. September results show the warehouse retailer continues to deliver phenomenal growth during the pandemic, and that should only reinforce its strengths over the coming years.
Costco looks like a strong candidate for continued outperformance, while Dollar Tree still carries a lot of uncertainty. Costco is the better buy today.
<<<
>>> 3 Reasons Costco Is a Great Company
INVESTOPEDIA
Oct 15, 2020
https://www.investopedia.com/stock-analysis/040915/3-reasons-costco-great-company-cost.aspx?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral
The warehouse club model employed by Costco (NASDAQ: COST) has proven to be extremely popular in the U.S. By late 2020, the company was operating nearly 800 stores, mostly in North America, and had 98.5 million members. It's safe to say that the vast majority of those dues-paying members are regular buyers of Costco's jumbo-sized merchandise.
What's the secret to Costco's success? Here are three factors that make Costco a great company.
It Makes a Profit Before Selling a Thing
In fiscal 2019, Costco sold $152.7 billion worth of merchandise. Its gross margin, excluding membership fees, was around 11%, as it has been since at least 2014.
This is far lower than the margin enjoyed by traditional retailers. Wal-Mart, for example, managed to top 24% in 2019.
KEY TAKEAWAYS
Costco makes a little of its money selling goods, and a lot of its money selling memberships.
This business model allows it to undersell the competition and ensure customer loyalty.
Its advertising budget is zero. Its customers return to get the full advantage of their membership dues.
But Costco doesn't actually make most of its money selling things. It charges its members an annual fee for the privilege of shopping at its stores, and these fees represent the bulk of Costco's operating profit. In 2019, Costco made $3.35 billion from membership fees, an increase of 7% from the previous year. Its entire net income for the year was $3.66 billion.
Other retailers need to worry that a decline in same-store sales will lead to collapsing profits. Not Costco. Its profits rest on its ability to persuade people to shell out $60 per year for its Everyday Value membership or $120 to upgrade to Gold Star Executive status.
A High Retention Rate
With prices often far lower than at competing retailers, it's not difficult to make the case to consumers, especially since the average Costco member has a household income of nearly $100,000. This leads to an extremely stable base of members, with retention rates in excess of 85%.
It's no surprise, then, that Costco's profitability has been so consistent over the years.
No Advertising? No Problem
Most retailers spend huge sums of money on marketing to bring customers into their stores.
Wal-Mart, for example, is considered to be stingy on advertising, spending only about 0.5% of its revenue on marketing expenses. But that adds up to about $2.4 billion, making Wal-Mart one of the largest advertisers in the world. Target spends more than 2% of its revenue on marketing.
Costco spends essentially zero. It has no advertising budget, though it does spring for mailers targeted to prospective members and coupons sent to existing members.
The Argument Against Advertising
How can Costco manage to completely shun traditional advertising? There are two reasons.
First, Costco has a product that sells itself. The membership offers a great value to those who shop regularly at Costco, and traditional retailers simply can't match Costco on price.
Second, driving existing members to the store more often through marketing wouldn't really help the bottom line, since membership fees are the real driver of profits, and spending heavily to gain more members doesn't make much sense.
In fact, if Costco were to spend 0.5% of its revenue on marketing, it would wipe out 17% of the company's operating profit. If it were to spend 2% of revenue on advertising, as Target does, that spending would erase nearly 70% of Costco's operating profit. It's just not worth it.
High Wages and High Productivity
Costco pays its employees unusually well in comparison with other retailers. In early 2019, it raised its minimum hourly pay to $15. Its average hourly pay is about $17.60 an hour, compared to about $10.88 on average for retailers, according to Payscale. Most Costco employees are eligible for company-sponsored healthcare.
For Costco, the result is a highly motivated workforce. Here's how Costco's revenue per employee stacks up against other retailers:
The average Costco employee generates nearly triple the revenue produced by the average Wal-Mart and Target employee. Now, part of this is due to Costco's business model. Its spartan warehouse stores require far fewer employees than the typical big-box store.
But what keeps customers coming back, and keeps members renewing their memberships, is a consistently good shopping experience. With highly paid, happy employees, Costco delivers better than its retail rivals.
Great Company, Expensive Stock
?Costco is a wonderful company but that doesn't mean it's a great stock. As of mid-October 2019, Costco had a price/earnings ratio of close to 42. The historical average for the S&P 500 is about 12 to 15. The average for retailers is about 15.5.
It's certainly reasonable to pay a high price for quality, but there is a limit. Costco is a stock that should be on every investor's radar, and if it ever falls back down to more reasonable levels, it should be snapped up in a heartbeat.
<<<
>>> Shopify Inc. (SHOP), a commerce company, provides a cloud-based multi-channel commerce platform for small and medium-sized businesses in Canada, the United States, the United Kingdom, Australia, and internationally. Its platform provides merchants with a single view of business and customers in various sales channels, including Web and mobile storefronts, physical retail locations, social media storefronts, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, build customer relationships, source products, leverage analytics and reporting, and access financing. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was founded in 2004 and is headquartered in Ottawa, Canada. <<<
Shopify - >>> The Best Stocks to Invest $1,000 In When the Market Is Falling
Motley Fool
https://www.fool.com/investing/2020/09/21/the-best-stocks-to-invest-1000-in-when-the-market/
If growth is more your thing, then I'd strongly suggest taking your $1,000 and investing it into cloud-based e-commerce solutions provider Shopify (NYSE:SHOP).
Prior to COVID-19, we were witnessing a steady transition of businesses moving online. Since the pandemic, we've observed an incredible uptick in online consumerism as the traditional office environment has been disrupted. This has taken Shopify's e-commerce solutions, which are designed to improve supply chain management and streamline sales, and completely supercharged demand. In the COVID-19-challenged second quarter, Shopify saw a 71% increase in new stores created from the sequential quarter, with gross merchandise volume on its platforms catapulting 119% from the prior-year quarter.
With a market cap of $104.5 billion, Shopify isn't going to come across as the same type of fundamental value as, say, NextEra or Exelixis. But it more than makes up for its premium with superior growth potential. Shopify's total addressable market just among smaller businesses (i.e., those with less than 500 employees) is $78 billion. Plus, the company has begun to see a big uptick in usage by larger, brand-name businesses.
Best of all, 86% of its revenue in the most recent quarter was derived from its core Shopify or Shopify Plus platforms. These are monthly subscription services that are responsible for highly predictable revenue.
Assuming Shopify continues to snag new merchants, Wall Street is counting on sales to skyrocket from $1.58 billion 2019 to $17.95 billion by 2024. As I said, it might look pricey now, but Shopify could be one heck of a bargain, and the perfect high-growth stock to buy in a falling market.
<<<
Amazon - >>> 3 Warren Buffett Stocks You Can Buy and Hold Forever
These three very different companies have one thing in common: Each can continue to grow for decades to come.
Motley Fool
by Danny Vena
Sep 16, 2020
https://www.fool.com/investing/2020/09/16/3-warren-buffett-stocks-you-can-buy-and-hold-forev/
Let's get this out of the way right up front: Forever is a very long time and it almost seems disingenuous to suggest it. In all honesty, nobody knows what will happen tomorrow or a year from now, let alone in five or ten years' time -- or forever.
That said, Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) CEO Warren Buffett has said, "Our favorite holding period is forever." And given his enviable track record, investors could do far worse than following his example. Since Buffett took the helm of Berkshire Hathaway in 1965, the company has had a compound annual growth rate of more than 20%, and by the end of 2019, its total returns have grown to a whopping 2,744,062%.
There are a number of criteria investors can use to increase the likelihood that a stock will still be successful decades from now. Buying a firmly entrenched industry leader, a company with a track record of innovation, or one with the ability to adapt to changing conditions can all improve your chances of success. Let's look at why Visa (NYSE:V), Amazon (NASDAQ:AMZN), and Apple (NASDAQ:AAPL) represent great "forever" stocks.
1. Payments titan Visa
When it comes to dominating the payments industry, Visa (NYSE:V) simply has no equal, accounting for more than 53% of U.S. credit card network purchase volume, totaling nearly $2 trillion in payments processed -- more than all three of its biggest competitors combined.
The company has another huge advantage over its chief rivals, particularly in times of economic uncertainty: While it processes payments, it's not a lender. Unemployment rates, while showing marked improvement in recent months, are still near record highs, raising the risk of credit delinquency and default.
Not content to rest on its laurels, Visa recently made a big bet on fintech, spending more than $5 billion to acquire financial technology provider Plaid. While the company wasn't a household name, many have used it without knowing it, as its technology secures users' financial information while connecting their bank accounts to a growing number of financial apps.
There's a whole big world out there and Visa still has international markets to conquer. The company estimates that cash is still used in annual purchases of more than $21 trillion and there are nearly 2 billion adults who don't yet have a payment account, showing the enormity of the opportunity that remains.
Buffett's still a believer, holding nearly 10 million Visa shares, worth almost $2 billion.
2. It's still Day One at Amazon
Amazon (NASDAQ:AMZN) dominates not one, but two industries: e-commerce and cloud computing.
While estimates vary, eMarketer contends that Amazon will account for 38% of online sales in the U.S. this year, while its nearest competitor Walmart will top out as less than 6%. Those estimates could prove conservative, as more consumers made the move to e-commerce in the midst of the pandemic. Amazon has also been working to increase its international penetration in recent years, so it too has worlds yet to conquer.
When it comes to cloud computing, Amazon popularized the notion and was among the first to recognize the massive opportunity. Being one of the first out of the blocks gave Amazon an advantage it still enjoys today. Amazon Web Services is still the undisputed leader in cloud computing, with a 33% share of the market -- more than its next three competitors combined, according to estimates by Synergy Research Group. It's also extremely lucrative, accounting for 25% of Amazon's sales and 65% of its operating income for the first half of 2020.
It may be the company's culture of innovation and expansion that makes it a forever stock, however. While Amazon began as an online bookseller, it has evolved into the "everything store." In addition to its e-commerce empire, the company has a sprawling logistics and delivery operation, a growing footprint in physical retail, leading streaming video and music offerings, and a massive artificial intelligence operation, including a growing ecosystem of Alexa-powered devices. Not to mention that Amazon has quickly become the third-largest digital advertiser in the country. And its Amazon Go stores -- which eliminate the need for cashiers -- are just getting started.
Buffett famously said that he regretted not investing in Amazon earlier. "I'm a fan [of Amazon], and I've been an idiot for not buying," Buffett said in an interview. It was one of Buffett's trusted money managers Todd Combs or Ted Weschler who eventually pulled the trigger.
That position has grown to more than half a million shares, valued at $1.66 billion.
3. Apple's prescient pivot
Apple is another company that has given new meaning to "industry-leading." While most companies would be happy with just one groundbreaking product, Apple has had several over the years. No competitor came close to the dominance of the iPod, a product Apple famously cannibalized with the introduction of the iPhone.
While the company has never been the global market share leader, iPhone has the distinction of gobbling up the majority of the profits. Apple captured about two-thirds of all profits in the global handset market last year, more than its next three competitors combined.
The company has other industry-leading products as well. The Apple Watch began as a sideline when it was introduced back in late 2014, but in just five short years, the device outsold the entire Swiss watch industry. Apple's wireless AirPods are another product line that dominates the market, accounting for nearly half of all sales in the category in 2019.
Apple is no longer counting on its fan-favorite products to fill its coffers. The company has worked to rapidly expand its services offerings over the past several years, with streaming music and video, mobile gaming, and digital payments, to name just a few. That strategy is bearing fruit, as services has grown to nearly 19% of Apple's trailing-12-month revenue, up from less than 12% just four years ago.
It's also worth noting that Apple is Buffett's largest holding, representing nearly half of Berkshire Hathaway's invested assets. "We bought about 5% of the company. I'd love to own 100% of it," Buffett said in a 2018 interview. "We like very much the economics of their activities. We like very much the management and the way they think." That's high praise indeed coming from one of the world's most successful investors.
But seriously, forever?
When it comes to investing, there are simply no guarantees, but choosing industry leaders with ongoing opportunities will certainly increase the likelihood of success. While Buffett's favorite holding period is forever, even the storied investor has sold distressed companies in beaten-down industries, with 2020 seeing his biggest turnover in years.
That said, it takes a certain caliber of company to become an industry leader, and it's even rarer to find those that simply dominate the competition. Each of these top-notch companies has what it takes to succeed for years and perhaps even decades to come.
<<<
>>> Wayfair Inc. (W) engages in the e-commerce business in the United States and internationally. It provides approximately eighteen million products for the home sector under various brands. The company offers selection of furniture, décor, decorative accents, housewares, seasonal décor, and other home goods through its sites, including Wayfair, Joss & Main, AllModern, Birch Lane, and Perigold brands. Wayfair Inc. was founded in 2002 and is headquartered in Boston, Massachusetts.
<<<
Costco - >>> Got $1,500? Here Are 3 of the Safest Stocks to Buy Now
These great companies haven't delivered a negative annual total return in over a decade.
Motley Fool
by Sean Williams
Aug 17, 2020
https://www.fool.com/investing/2020/08/17/got-1500-here-are-3-of-the-safest-stocks-to-buy-no/
Who needs amusement parks when you have the stock market to take you on a wild ride? The coronavirus disease 2019 (COVID-19) pandemic has led to unprecedented volatility this year, as measured by the CBOE Volatility Index. We witnessed the broad-based S&P 500 lose 34% of its value in less than five weeks, then regain everything back over the subsequent 140 calendar days.
Investors, both novice and tenured, have had their resolve to stay the course tested like never before.
Even though the stock market has a history of putting corrections and bear markets firmly into the rearview mirror over time, some investors simply aren't built or prepared to deal with wild swings in equity valuations or the potential for prolonged downside. To these folks I say, there's good news. There are a handful of companies that can be bought right now that are among the safest stocks on Wall Street.
Best of all, you won't need a fortune to begin investing in these tried-and-true businesses. If, say, you have $1,500 you can devote to these safe stocks over the long haul, you have more than enough capital to watch your wealth compound over time.
Costco Wholesale
Because of the retail industry's tie-ins to the U.S. economy, we wouldn't often think of retailers as a true safe-haven investment. Although the U.S. economy spends far more time expanding than contracting, recessions are an inevitable part of the economic cycle. However, recessions tend to be a virtual non-event for Costco Wholesale (NASDAQ:COST).
Just how steady is warehouse club Costco? Including its dividend, Costco hasn't delivered a negative total return since 2008. With its stock up 15.3% year-to-date, through August 13, Costco looks to be on track for a 12th consecutive year of gains, after delivering a 540% total return for investors during the 2010s.
A big reason Costco is able to separate itself from other retailers is because of its bulk-buying prowess. Costco frequently uses its size and deep pockets to negotiate significant discounts when buying items in bulk. These discounts can then be passed along to its members. And make no mistake about it, these low prices remain the primary draw of consumers to Costco.
Furthermore, Costco uses its memberships as a tool to fuel its competitive advantages. The revenue collected from these memberships can be used as a buffer on pricing to further undercut its competition. Additionally, having consumers pay annually for the right to shop at Costco makes it less likely that they're going to shop elsewhere. These memberships effectively lock consumers into Costco's ecosystem of products and services.
From what we've historically witnessed, Costco has excellent pricing power on its memberships. This is to say that any pushback on membership fee price hikes tends to be very short-lived, and rarely, if ever, adversely affects enrollments or renewals.
Since Costco carries everything from essential groceries to aisles upon aisles of higher-margin discretionary items, it makes for the perfect example of a safe stock to buy in the retail space.
Broadcom
Another one of the safest stocks on the planet than you can buy right now is chipmaker Broadcom (NASDAQ:AVGO).
Similar to Costco argument above, technology isn't exactly the sector that folks would typically look for "safe stocks." Tech stocks are usually very cyclical, and sport high premiums tied to their superior growth potential. In other words, we'd expect a lot of volatility. But that's really not been the case with Broadcom.
Throughout the 2010s, Broadcom's total return, inclusive of dividends, was positive every year -- and it's looking to keep that streak intact in 2020. Dividends have certainly helped Broadcom keep its streak of annual gains alive, with its quarterly payout of $3.25 having grown by more than 4,500% from where it was 10 years ago.
But Broadcom's income stream isn't the real lure here. Instead, it's two huge catalysts that should dominate this decade.
First off all, Broadcom is going to benefit from the rollout of 5G networks. We're talking about the first real upgrade to wireless infrastructure in about a decade, and it's liable to lead to a multiyear technology upgrade cycle for smartphones and other wireless devices. With wireless chips for smartphones accounting for the lion's share of the company's revenue, 5G should be a serious growth boon for Broadcom.
The other factor at play here is the surge in remote work environments created by COVID-19. As enterprise data continues to shift into the cloud, demand for data centers and storage should increase. Broadcom's connectivity and access chip solutions are at the heart of this growing data center demand.
Though its days of consistent double-digit sales growth are now in the past, Broadcom's current profile will check boxes for growth and value investors.
NextEra Energy
A final safe stock that investors can consider picking up right now is electric utility NextEra Energy (NYSE:NEE). If the company's nearly 19% total return holds for 2020, this'll mark its 12th straight positive year of returns.
When you think of safe, steady companies, utilities should rightly come to mind. That's because utilities provide a product or service that people almost universally need. In NextEra's case, it supplies electricity and natural gas, which are pretty much a necessity if you own a home or rent. Although weather can influence how much power a household uses, the beauty of investing in electric utility stocks is that demand and cash flow tend to be highly predictable in any economic environment.
What allows NextEra to stand out from its peers and deliver consistent high-single-digit profit growth is the company's focus on renewable energy. Investing in solar and wind projects isn't cheap, but NextEra has been able to do so at historically low lending rates for years. As the leading utility for solar and wind capacity, NextEra's electricity generation costs are well below that of its peers. If and when green energy regulations are handed down from Washington, D.C., NextEra will be way ahead of the curve.
NextEra Energy also benefits from its traditional utility operations being regulated. Though this means the company can't pass along price hikes at will (it needs the authorization of a state's public utility commission), it also means no exposure to potentially volatile wholesale electricity pricing. Again, it all comes back to the predictability of the company's cash flow.
NextEra might be trading at a premium to other electric utilities, but it's well-deserved given its ability to execute on its renewable projects.
<<<
Amazon, Visa - >>> 2 Robinhood Stocks to Buy and Hold Forever
These companies from the site's top 100 have strong moats and long-term growth prospects.
by Will Ebiefung
Aug 25, 2020
https://www.fool.com/investing/2020/08/25/2-robinhood-stocks-to-buy-and-hold-forever/
Long-term investing is the key to success in the stock market. It's a hard lesson for many new investors to learn -- especially on Robinhood, where low-quality penny stocks can often steal the limelight. Fortunately, Robinhood investors are also high on some stocks that are set up for sustainable success because of their large competitive moats and long-term growth drivers.
The first I'm highlighting today is Visa (NYSE:V), the global payments processor that is a rock-solid bet in this increasingly consumption-driven economy. The second is Amazon (NASDAQ:AMZN), the e-commerce giant that's pivoting toward cloud computing and healthcare. Both companies are listed in Robinhood's top 100 with analyst buy ratings above 80%.
Visa
In retail electronic payments, Visa enjoys undisputed market leadership in the United States through its ubiquitous branded debit and credit cards. With household consumption making up 68% of the country's GDP, Visa stock is an investment in the long-term strength of the American economy. But the investment thesis here doesn't stop with America. The company's international expansion and the increasing prevalence of e-commerce will also be significant growth drivers.
Visa's latest earnings release, which covers the quarter ending June 30, reflects the full impact of the coronavirus pandemic, which dramatically reduced consumer spending due to lockdowns and travel restrictions in the U.S. and internationally. Net revenue fell 17% on lower transaction volume, and earnings fell 22% to $1.07 per share.
But Visa is poised to bounce back. Consumer spending is rebounding as countries relax their restrictions. And online shopping, a major driver of credit and debit card use, remains elevated. Management also has a wide array of projects to expand Visa's footprint outside North America and Europe.
Recently, Visa started working with Facebook to introduce a new payment feature on WhatsApp in Brazil that will let users purchase items or send money to family and friends through the popular messaging app. The company has also renewed its partnership with OCBC Bank, Singapore's second-largest debit issuer.
Amazon
Amazon has evolved from an online bookseller into a massive e-commerce platform. The company's market dominance and compelling pivot to cloud computing and healthcare make it another popular Robinhood stock that will stand the test of time. And unlike Visa, Amazon's latest quarterly results showed phenomenal performance.
Net sales jumped 40% to $88.91 billion while operating income soared 89% to $5.84 billion due to increased stay-at-home shopping during the pandemic. Amazon's cloud computing service, Amazon Web Services, made up $3.36 billion (58%) of the company's operating income and is poised for continued growth due to the megatrend of business computing moving from traditional data centers to the public cloud.
Amazon is also making an aggressive push into healthcare, an arguably limitless industry where it may have a competitive edge because of its extensive logistics infrastructure and investments into artificial intelligence.
In August, Amazon's India division launched a pilot pharmacy delivery program in the city of Bengaluru (also known as Bangalore) amid the pandemic. Amazon is also making significant healthcare investments in the United States through the $753 million acquisition of drug distributor PillPack in 2018. And it's reportedly working on a vaccine for the common cold, an illness that costs the U.S. economy at least $40 billion a year.
<<<
>>> MercadoLibre, Inc. (MELI) operates online commerce platforms in Latin America. It operates MercadoLibre Marketplace, an automated online commerce platform that enables businesses and individuals to list merchandise and conduct sales and purchases online; and MercadoPago FinTech, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, and allows merchants to process transactions via their Websites and mobile apps, as well as in their brick-and-mortar stores through QR and mobile points of sale. The company also offers MercadoFondo, an asset management product; and MercadoCredito, a lending solution. In addition, it provides MercadoEnvios logistics solution, which offers its platform technological and operational integration services with third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. Further, the company provides MercadoLibre Classifieds service that enables users to list their offerings related to motor vehicles, vessels, aircraft, and real estate and services outside the Marketplace platform. Additionally, it offers MercadoLibre Advertising platform, which enables retailers and various other consumer brands to promote their products and services on the Internet by providing branding and performance marketing solutions. The company also provides MercadoShops, a software-as-a-service hosted online store solution that enables users to set-up, manage, and promote their own Webstores. The company was founded in 1999 and is headquartered in Buenos Aires, Argentina.
<<<
Costco - >>> 3 Well-Known Stocks That Just Keep Winning
Based on year-to-date performance, these popular stocks are on track for their 12th consecutive year of gains.
Motley Fool
Sean Williams
Jul 9, 2020
https://finance.yahoo.com/m/680deaaa-297d-3ede-8a74-6eeccf305821/3-well-known-stocks-that-just.html?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article&yptr=yahoo
For Wall Street and investors, this has been one heck of a trying year. No matter your level of investing experience, nothing could have prepared folks for the roller-coaster ride the stock market has been on since mid-February due to the coronavirus disease 2019 (COVID-19) pandemic.
While most stocks have given investors a bit of whiplash -- which is to be expected when the S&P 500 loses a third of its value in five weeks and then delivers its strongest quarterly gain in 22 years in the subsequent quarter -- three well-known stocks have done what they always seem to do: gone up.
The following three companies were already riding an incredible 11-year winning streak into 2020 (based on total return, inclusive of dividends paid), and they've continued their winning ways through the first six-plus months of the year.
Costco Wholesale
Perhaps the most well-known stock that just can't be stopped is warehouse club operator Costco Wholesale (NASDAQ:COST). Though its share price has been whipsawed a bit in 2020, Costco is currently higher by 6% for the year and a cool 128% over the past five years. With the exception of 2016 (and 2020 thus far), Costco has generated a double-digit total return for its shareholders every year since 2008.
Though there are a number of reasons Costco just keeps winning, its memberships play the biggest role. These annual memberships, which start at $60, provide high-margin revenue that allows Costco to undercut other retailers on price. Plus, paying for a membership makes it far likelier that a customer will purchase products within Costco's ecosystem rather than shop anywhere else.
Costco also benefits from its bulk-buying tactics. It's no secret that buying product in bulk nets Costco a cheaper base price. The company is then able to pass along these savings to its paying members, as well as to use these low prices as a lure to bring in new members.
As one final note, there's no question that COVID-19 has helped Costco. Bulk buying on the consumer end has been a blessing for the entire grocery and warehouse industry. It would be a real surprise if Costco didn't lock in its 12th consecutive year of gains when the curtain closes on 2020.
NextEra Energy
Cue Queen's hit song "Don't Stop Me Now," because electric utility NextEra Energy (NYSE:NEE) has proved to be virtually unstoppable over the past 11-plus years. Following a shaky March that saw NextEra, at one point, lose 25% of its value, the company's stock is now up 2% on a year-to-date basis through July 6.
The single most important catalyst for NextEra Energy continues to be its focus on green-energy projects. No company in the U.S. is generating more capacity from solar and wind power than NextEra, and that's unlikely to change anytime soon. NextEra is continuing to invest tens of billions into its infrastructure and has plans to install 30 million solar panels by 2030 (the "30-by-30" project) to generate another 10,000 megawatts of capacity. Though these investments remain pricey, they ultimately result in significantly lower electricity production costs on a per-kilowatt-hour basis. In other words, this is what allows NextEra's earnings growth to trounce those of its electric utility peers.
Furthermore, NextEra Energy should benefit from historically low lending rates. With the company often financing green projects with debt, it's the perfect time for NextEra to borrow money and further transform its production portfolio.
Also, don't overlook the fact that NextEra Energy's traditional utility operations are regulated. While this keeps NextEra from imposing price hikes at will, it also means no exposure to potentially volatile wholesale electricity pricing. It's this consistency and green energy push that have NextEra on track for its 12th straight winning year.
UnitedHealth Group
Another practically unstoppable stock for 12 years and counting now is health insurance and health systems optimization company UnitedHealth Group (NYSE:UNH). You might not think of health insurers as top-performing stocks, but UnitedHealth's total return has topped 36% in 5 of the last 11 years. With its stock down as much as 34% in March, UnitedHealth's 3% year-to-date return is more impressive than it sounds.
Ironically, one of the things that makes UnitedHealth Group tick is the lack of healthcare reform at the congressional level. Though there have been numerous instances in which lawmakers have homed in on the idea of bringing down drug prices or reforming the insurance industry, most of the time, no change is enacted. This allows UnitedHealth excellent long-term visibility and is a key reason it's able to continue increasing health insurance premiums.
In terms of growth drivers, UnitedHealth has leaned on Optum to a greater degree in recent years. Optum's purpose is to improve the operating efficiency of healthcare systems. During the COVID-19-impacted first quarter, Optum's revenue skyrocketed 25% to $32.8 billion, which essentially accounts for half of UnitedHealth's consolidated sales. Though OptumRx's prescription drug fulfillment comprises a significant portion of Optum's total sales ($21.6 billion out of $32.8 billion), the faster-growing analytics and health operations segments are what should drive operating margins higher over the long term.
With UnitedHealth Group expected to benefit from an increase in personal health insurance demand due to COVID-19, look for the company to make a serious run at extending its streak to 12 straight years of gains.
<<<
>>> Costco Wholesale Corporation (COST), together with its subsidiaries, operates membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. The company provides dry and packaged foods, and groceries; snack foods, candies, alcoholic and nonalcoholic beverages, and cleaning supplies; appliances, electronics, health and beauty aids, hardware, and garden and patio products; meat, bakery, and deli products, as well as produce; and apparel and small appliances. It also operates gas stations, pharmacies, optical dispensing centers, food courts, and hearing-aid centers; and offers business delivery, travel, and various other services online in various countries. As of September 1, 2019, the company operated 782 warehouses, including 543 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in South Korea, 13 in Taiwan, 11 in Australia, 2 in Spain, 1 in Iceland, 1 in France, and 1 in China. It also operates e-commerce Websites in the United States, Canada, the United Kingdom, Mexico, South Korea, and Taiwan. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.
<<<
>>> Copart, Inc. (CPRT) provides online auctions and vehicle remarketing services. It offers a range of services for processing and selling vehicles over the Internet through its Virtual Bidding Third Generation Internet auction-style sales technology to vehicle sellers, insurance companies, banks and finance companies, charities, and fleet operators and dealers, as well as for individual owners. The company's services include online seller access, salvage estimation, estimating, end-of-life vehicle processing, virtual insured exchange, transportation, vehicle inspection stations, on-demand reporting, title processing and procurement, loan payoff, flexible vehicle processing programs, buy it now, member network, sales process, and dealer services. Its services also comprise services to sell vehicles through CashForCars.com; and U-Pull-It service that allows buyer to remove valuable parts, and sell the remaining parts and car body. The company sells its products principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, and exporters, as well as to the general public. As of May 18, 2020, it operated through approximately 200 locations in 11 countries. Copart, Inc. was founded in 1982 and is headquartered in Dallas, Texas. >>>
>>> Vroom IPO: 5 things to know about the online used-car seller
MarketWatch
June 9, 2020
By Claudia Assis
https://www.marketwatch.com/story/vroom-ipo-five-things-to-know-about-the-online-used-car-seller-2020-06-03?siteid=yhoof2&yptr=yahoo
Vroom could thrive in a post-coronavirus world, but consumers may not be ready to give online car buying a try
Online used-car seller Vroom Inc. rose $468 million Tuesday in an initial public offering under the shadow of the coronavirus pandemic.
Vroom VRM, 100.95% shares more than double on their first day of trading, and were recently gaining 105% after trading as high as $47.50. Vroom priced the IPO late Monday at $22 a piece.
Vroom could benefit from the broader shift to online shopping accelerated by the pandemic. With the economic uncertainty and turmoil in the car industry, however, its business model could become more challenging. Vroom already has had to cut prices and its profit margins have shrunk.
“The market is placing a high value on next-generation companies that can thrive in a post-COVID economy," said Matthew Kennedy, a senior IPO market strategist with Renaissance Capital, which manages IPO-focused ETFs. “Vroom falls into that category.”
Car dealerships are under pressure as consumers both delay big-ticket purchases and limit non-essential travel, if the dealerships are open at all, Kennedy said.
“However, tech-focused used car platforms like Vroom proved more resilient. Consumers are increasingly interested in shopping online for cars, and the COVID-19 outbreak (has) accelerated that trend.”
Kennedy points to the success of Carvana Co. CVNA, 2.13% shares, which have rebounded since March, when most of the U.S. went under shelter-in-place, public-health orders to slow the spread of the virus. Shares of Carvana, Vroom’s main competitor, are trading more than 600% above the company’s 2017 IPO price.
“That alone could drive interest in Vroom,” he said.
The IPO market has shown more activity in recent weeks, with the biggest deal of the year pricing at the higher end of its price range. Warner Music Group Corp. returned to public markets on Wednesday after nine years as a private company, raising $1.93 billion.
According to Renaissance, 35 IPOs have priced in 2020, a 42% drop so far from last year.
Here are five things to know about Vroom.
IPO terms suggest valuation of nearly $2.5 billion
Vroom’s IPO price of at $22 a share was upped from a previous range of $18-$20. The company is offering about 21.25 million shares, for a market capitalization of around $2.48 billion.
Underwriters include Goldman Sachs, BofA Securities, and Allen & Co. The underwriters have a 30-day over-allotment option to buy up to 3.2 million additional Vroom shares.
Vroom is led by Paul Hennessy, who previously was Priceline.com chief executive and chief marketing officer of Booking.com, both owned by Booking Holdings Inc. BKNG, -3.44%. Hennessy was named Vroom’s CEO in 2016.
Coronavirus impact
Despite the focus on online sales, Vroom was not immune to pandemic-related declines in business.
“The COVID-19 pandemic has impacted us in a number of ways, including an adverse impact on our e-commerce operations,” Vroom said in its prospectus.
Between March 11 and March 31, as most U.S. residents were told to remain indoors and nonessential businesses closed, online sales fell 15% as compared to the 20 days before March 11, the company said.
Starting in late March, Vroom cut vehicle prices to drive sales and quickly reduce inventory bought before the pandemic, and it also halted all vehicle acquisitions other than trade-ins, it said.
The strategy has worked, the company claimed, saying it “significantly” reduced inventory and, due to the price cuts, “our demand returned to pre-COVID-19 levels, and we experienced robust e-commerce vehicle sales.”
That came at a price, however: “Those sales were at a greatly reduced gross profit per unit, the company said.
Vroom has since resumed buying cars from auctions and individuals, but is focusing on “high-demand models” to get better margins, it said. Vroom plans to build up inventory “in the near term to return to and ultimately exceed pre-COVID-19 levels.”
To protect its balance sheet amid the pandemic, Vroom said it had reduced costs and furloughed about a third of its workforce in early May.
About 60% of the furloughed employees returned to work by the end of May, the company said. As of late April, Vroom had $156.4 million in cash and cash equivalents and $280.8 million available under its credit facility.
It has not turned a profit yet
Vroom has not been profitable since its start in 2012 and deficits have piled on to about $616 million as of March 31, the company said. In addition, losses have widened this year and dividends are nowhere in sight.
Net losses hit $143 million in 2019 and $41.1 million in the first quarter, compared with losses of $85.2 million for 2018 and $27.1 million in the first quarter of 2019, Vroom said.
Revenue rose 39% to $1.2 billion in 2019. For the three months ended March 31, sales rose 60% to $375.8 million, Vroom said.
Its long list of potential pitfalls, or risk factors, include “inability to reduce costs, acquire and appropriately price vehicle inventory, attract customers or identify and respond to emerging trends in the used car industry; slowing demand for used vehicles and our related value-added products; weakness in the automotive retail industry generally,” as well as increasing competition.
Vroom expects “to continue to incur losses as we invest in and strive to grow our business,” it said. It has to ramp up expenses with advertising and marketing as it builds its brand, continues to invest in technology, and expands. Being public will also come at a higher cost, as it will have to face “significant” legal, accounting and other expenses that it did not incur as a private company.
E-commerce gross profit per vehicle declined 24% last year as compared with 2018, and by 0.4% for the first quarter as compared with first quarter of 2019. “To reduce our losses, we will need to increase our gross profit per unit by lowering our costs per unit by, among other things, increasing efficiencies in reconditioning and logistics, which we may be unable to do,” it said.
Vroom also has said it does not expect to pay any dividends “for the foreseeable future.”
People may not be ready to give online car-shopping a try
The online market for used cars is a lot smaller than online markets for other consumer products.
One of the biggest hurdles is misgivings about buying a vehicle, usually a consumer’s largest one-time expense after buying a home or saving for a down payment, sight unseen.
Even often-derided interactions with car salespeople might be preferable for some, as is the ability to test-drive and examine the vehicles under consideration. Then there’s the inconvenience with returning or exchanging cars bought online.
“If the online market for vehicles does not continue to develop and grow, our business will not grow and our business, financial condition and results of operations could be materially and adversely affected,” Vroom said.
On the plus side, Vroom offers consumers access to thousands of vehicles, ready for perusal at any time, with pricing and financing information readily available, the company said. Vroom’s cars come from auctions, consumers, dealers, and rental-car companies.
The used-car industry “is highly fragmented with over 42,000 dealers and millions of peer-to-peer transactions ... it also is ripe for disruption as an industry that is notorious for consumer dissatisfaction and has one of the lowest levels of e-commerce penetration at only 0.9%,” Vroom said.
It relies on several third parties
Vroom relies on several third-party companies to do the bulk of its job.
That include its customer-service team, which handles “the substantial majority” of inquiries, sales, purchases and financing of vehicles in Vroom’s business.
“Thus, the customer experience center is fundamental to the success of our business. As a result, the success of our business and our customer experience is partially dependent on a third party over which we have limited control,” the company said.
Some of its “reconditioning” business, or the sprucing up of vehicles before going on sale, is also handled by third parties in some cases, Vroom said.
<<<
>>> Carvana Co. (CVNA), together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using company's proprietary 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. The company was founded in 2012 and is headquartered in Tempe, Arizona.
<<<
>>> Amplify Online Retail ETF (IBUY) Hits New 52-Week High
Zacks
by Sweta Jaiswal, FRM
May 7, 2020
https://finance.yahoo.com/news/amplify-online-retail-etf-ibuy-223810523.html
Time for Consumer ETFs as Americans Are Regaining Confidence?
For investors looking for momentum, Amplify Online Retail ETF IBUY is probably a suitable pick. The fund just hit a 52-week high and is up 72.3% from its 52-week low price of $33.11/share.
Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
IBUY in Focus
This ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price performance of the EQM Online Retail Index. The Index is a globally-diverse basket of publicly-traded companies that obtain 70% or more of revenues from online or virtual sales. It has AUM of $290.5 million and charges 65 basis points (bps) in annual fees.
Why the Move?
In order to contain the spread of the virus, governments across the globe are shutting down economic activities and imposing social distancing measures. In the current scenario, consumers are opting for online retailers to purchase food items and other goods. This is driving orders for online retailers like Amazon, making funds like IBUY an attractive investment option.
More Gains Ahead?
It seems like the fund will remain strong, with a positive weighted alpha of 21.90, which gives cues of further rally.
<<<
>>> What's in Store for Online Retail ETFs This Earnings Season?
Zacks
Sanghamitra Saha
April 27, 2020
https://finance.yahoo.com/news/whats-store-online-retail-etfs-170005867.html
Is the Options Market Predicting a Spike in Groupon (GRPN) Stock?
Online grocery shopping has become a mainstream in most parts of the globe amid lockdowns and social distancing mandates in a desperate attempt to contain the spread of coronavirus.
U.S. online sales of consumer packaged goods (CPG) increased 56% for the week ending April 18, compared to the same period a year earlier, according to data from research and polling firm Nielsen and Rakuten Intelligence.
Online retail ETFs like Amplify Online Retail ETF IBUY (up 28.2%) and ProShares Online Retail ETF ONLN (up 30.9%) have beaten the S&P 500 (up about 14.3%) in the past month.
Against this scenario, let’s take a look at what’s in store for online retail stocks this reporting season and how the related ETFs can be impacted.
Inside the Expected Earnings Performance
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Online seller of home décor Wayfair W will report on May 5. This Zacks Rank #2 (Buy) stock has an Earnings ESP of +1.67%. Positive ESP suggests that analysts have recently become bullish on the company's earnings prospects.
Etsy ETSY, the provider of online and offline marketplaces, has a Zacks Rank #2 and is likely to report next on May 6. Etsy has a positive ESP of 8.17%. Zacks Rank #3 Amazon AMZN is about to report on Apr 30 and has an ESP of +5.11%.
Zacks Rank #2 provider of Internet-based postage services Stamps.Com STMP (expected report date May 7) and global marketplace for digital imagery Shutterstock Inc. SSTK (on Apr 28) each has a 0.00% ESP. Zacks Rank #3 (Hold) companies eBay EBAY (Apr 29) and JD. Com JD (expected to report on May 8) also have a 0.00% ESP.
Not all online retail companies look promising in terms of ESP. Zacks Rank #3 Alibaba BABA, Grubhub GRUB and 1-800-Flowers.Com FLWS are likely to report on May 20, May 6 and Apr 30, respectively. Alibaba, Grubhub and 1-800-Flowers have a negative earnings ESP of 5.94%, 22.73%, and 21.21%, respectively.
Impact on ETFs
Overall, the impact on ETFs is likely to be largely favorable as most major holdings have a positive ESP. However, CLIX is having an edge over IBUY as the former is not only long on online retailing but also takes short positions in brick and mortar retailers included on the Solactive-ProShares Bricks and Mortar Retail Store Index. The dual benefits provide CLIX with a better opportunity than IBUY, which only has a bullish view on online retail stocks.
<<<
>>> Retail ETF Gains A ‘CLIX’ Away
ETF.com
April 14, 2020
https://finance.yahoo.com/news/retail-etf-gains-clix-away-031500355.html
It’s a tough time to be too positive on the retail segment, as the global pandemic shuts down economies around the world, drags U.S. consumer confidence to near a three-year low, and dents consumer discretionary spending.
That is, unless you’ve been investing in the ProShares Long Online/Short Stores ETF (CLIX).
When you think of retail ETFs, CLIX is probably not the first ticker that comes to mind. It’s a relatively small fund that came to market about two years ago, it’s alternative by design, and it isn’t all that cheap at 0.65% in expense ratio. But CLIX is one of the best-performing ETFs of the year.
So far in 2020, CLIX is up 20%, outperforming all other retail ETFs—be they in-store or e-commerce focused—as well as the broader U.S. equity market.
CLIX isn’t just an ETF for anyone who believes the future of retail is online; it’s an ETF for those who also believe the days of brick-and-mortar shopping are numbered. CLIX is both a bullish and a bearish bet on retail in one wrapper.
The long/short approach invests in (goes long) online retailers and e-commerce giants such as Amazon, Alibaba and Wayfair. The long part of the portfolio excludes retailers that generate any revenue from physical stores. CLIX also sells (shorts) companies like Kroger, Macy’s, Ross and Foot Locker—firms that have most of their retail revenue, at least 75%, come from in-store sales.
Traditional Retail Lagging
The long/short approach to retail is leading the way this year. By comparison, consider how other retail ETFs (excluding leverage and inverse strategies) stack up this year.
The largest, the $267 million SPDR S&P Retail ETF (XRT), is down a whopping 27% year-to-date, delivering roughly twice the losses seen in the broader U.S. market as measured by the SPDR S&P 500 ETF (SPY).
XRT is the biggest and most popular retail ETF, but the fund is unique in its equal-weighting methodology. In XRT, a company like Amazon is as much a driver of returns as is Kroger, Rite Aid and Dollar General. In 2020, this equal-weighted approach has not worked well.
Compared to competing VanEck Vectors Retail ETF (RTH), which market-cap-weights its narrower basket of 25 holdings, XRT is lagging RTH by about 20 percentage points this year.
In RTH’s case, three retailers command more than 40% of the portfolio, being the biggest drivers of performance—Amazon, Home Depot and Walmart. That top-heavy concentration has worked in the current environment, and over time, it’s the source of ongoing return disparity (outperformance) between these two funds. See performance data below:
RTH is outperforming XRT handily, but both are lagging CLIX by a wide margin.
Online Focus Not Necessarily Winning
If you were to focus exclusively on online retail, you’d come across a similar issue.
The two bigger ETFs in this space, the Amplify Online Retail ETF (IBUY) and competing ProShares Online Retail ETF (ONLN), too, are delivering different returns this year because one is equal-weighted, the other is market-cap weighted. And they, too, are underperforming CLIX.
IBUY owns about 50 companies that have at least 70% of their revenues from online sales, and companies are equal-weighted within two buckets. U.S. retailers command about 75% of the portfolio, foreign retailers get the rest.
ONLN market-cap weights its e-commerce names, meaning that the bigger stocks in the portfolio such as Amazon, Alibaba and Wayfair—dominating a combined 36% of the portfolio—drive most of the returns.
Year-to-date, IBUY is down about 10% while ONLN is in the black, eking out gains of about 1.4%.
Whether CLIX will hold on to this outperformance going forward remains to be seen. We don’t really know what the extreme measures we’ve taken to combat a global pandemic will mean for long-term impact and guidance into this segment.
That said, it’s always cool to see the ETF wrapper at work—in this case, offering laser-focused access to an investment idea that in 2020 has proven a winner. And if conditions change; if you are a die-hard brick-and-mortar fan; or if you don’t like long/short investing, rest assured there are plenty of other retail ETF choices for you.
<<<
>>> ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus
Zacks
by Sweta Killa
April 27, 2020
https://finance.yahoo.com/news/etfs-tap-soaring-e-commerce-140502534.html
ETFs Benefiting From Coronavirus-Induced New Normal Trends
The COVID-19 pandemic has ramped up the digital shift, which is likely to last longer than expected even after the economy reopens. E-commerce companies have been the most sought after on Wall Street as lockdowns have resulted in the forced closure of malls and retail stores.
E-commerce sales climbed at the highest pace since late February, jumping 25% during the week ending Apr 20, according to Signifyd’s E-commerce Pulse data. The jump surpassed the previous record of 17% for the week ending Apr 6. Overall, there is an increase of 85% in ecommerce spending since late February. According to the market research firm Rakuten Intelligence, e-commerce spending in the United States is up more than 30% from the beginning of March through mid-April compared with the same period last year (read: Hot ETFs to Tap Consumers' Digital Shift Amid Coronavirus).
Although online grocery sales were the least investor favorite, it has emerged as the hottest category during the epidemic. According to Nielsen and Rakuten Intelligence, U.S. online sales of consumer-packaged goods (CPG) — the kind of items typically sold in grocery stores — grew 56% for the week ending Apr 18. Food topped the list, with sales soaring 69.5% year over year, followed by a 57.5% surge in online sales of household care items and growth in the health and beauty care (47.7%), baby care (27.2%) and pet care (22.3%) categories.
Per Namogoo, online supermarket visits were up 162% from the year-ago levels in March and up 146% from February 2020.
Bloomberg stated that Amazon AMZN is the top-most, high-profile winner of the current environment. Shares of AMZN jumped more than 40% from a low hit last month and has nearly overtaken Apple AAPL in market capitalization. Goldman believes that the pandemic would “steepen the curve of Amazon’s long-term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its businesses.”
Other e-commerce stocks saw bigger share-price rallies. Shopify SHOP is up more than 85% from a low hit earlier this month, becoming one of the most valuable companies in Canada, while Wayfair W has more than quintupled off a March low, having surged more than 400% over the period. Shares of eBay EBAY are also up nearly 50% from a low hit last month.
Below we have highlighted some ETFs to tap soaring e-commerce sales:
Amplify Online Retail ETF IBUY
This ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. The fund comprises 47 stocks and has attracted $257.1 million in its asset base. It charges 65 bps in fees per year and trades in average daily volume of 44,000 shares. The product has gained 27% in a month.
ProShares Online Retail ETF ONLN
This ETF focuses on global retailers that derive significant revenues from online sales. It tracks the ProShares Online Retail Index, holding 24 stocks in its basket. The product has amassed $76.7 million in its asset base and trades in paltry volume of around 26,000 shares a day on average. It charges 58 bps in annual fees from investors and has risen 26.9% in a month.
Global X E-commerce ETF EBIZ
This fund invests in companies positioned to benefit from increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing related software and services, and/or selling goods and services online. It has accumulated $10 million in its asset base and charges 50 bps in annual fees. The ETF sees average daily volume of 7,000 shares and is up 22.8% in a month (read: 5 Best Sector ETFs Halfway Through April).
O’Shares Global Internet Giants ETF OGIG
The fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It holds a basket of 70 stocks and charges 48 bps in annual fees. OGIG has been able to attract $73.3 million in its asset base and trades in average daily volume of 49,000 shares. It has gained 18.2% in a month.
SPDR S&P Internet ETF XWEB
This product follows the S&P Internet Select Industry Index, holding 42 stocks in its basket. It charges 35 bps in annual fees and trades in a volume of 3,000 shares. With AUM of $14.2 million, the fund has gained 23.5% and carries a Zacks ETF Rank #2 (Buy).
Invesco NASDAQ Internet ETF PNQI
This fund offers exposure to the largest and most-liquid companies that are engaged in Internet-related businesses by tracking the Nasdaq Internet Index. Holding 81 stocks in its basket, it has AUM of $546.1 million and trades in lower volume of about 29,000 shares a day. It charges 62 bps in fees per year and carries a Zacks ETF Rank #2. PNQI has added 17.3% in a month (read: Stay-at-Home Boosts Netflix Q1 Subscribers: ETFs to Buy).
First Trust Dow Jones Internet Index Fund FDN
This fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 42 stocks in its basket. FDN is the most popular and liquid ETFs in the broad technology space with AUM of $8.1 billion and average daily volume of around 470,000 shares. It charges 52 bps in fees per year and has a Zacks ETF Rank #2. The ETF is up 17.6% in a month.
<<<
>>> E-Commerce ETFs Benefit from Record Online Holiday Sales
ETF Trends
December 26, 2019
https://finance.yahoo.com/news/e-commerce-etfs-benefit-record-201627254.html
Online retail-related ETFs are enjoying a great winter as U.S. consumers spent more online over this year's holiday shopping season, with e-commerce sales reaching a new record.
The traditional winter holiday shopping season is a key period for the retail sector, accounting for up to 40% of annual sales, Reuters reports.
Breaking down the retail segment, e-commerce sales this year made up 14.6% of the total, or up 18.8% for the same period last year, according to Mastercard’s recent data based on retail sales from November 1 through Christmas Eve. Overall holiday retail sales, excluding autos, increased by 3.4%.
“E-commerce sales hit a record high this year with more people doing their holiday shopping online,” Steve Sadove, senior adviser for Mastercard, told Reuters.
“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices,” Sadove added, referring to how Thanksgiving landed on November 28 this year, or a week later than last year's November 22 date.
Mastercard spokesman William Tsang, though, did note that 2018’s 5.1% growth in total sales still eclipsed this year’s holiday sales growth.
Capitalizing On The Growth In E-Commerce
As more shoppers look to online deals and internet retail outlets, ETF investors can also capitalize on the growth in e-commerce through theme-specific ETF strategies. For example, the ProShares Decline of the Retail Store ETF (EMTY) and ProShares Long Online/Short Stores ETF (CLIX) both take a short position in brick-and-mortar retail stores to capitalize on weakness in traditional stores. Meanwhile, the ProShares Online Retail ETF (ONLN) takes on a long position in online retailers.
The Amplify Online Retail ETF (IBUY) has been a popular thematic play that targets global companies that generate at least 70% of revenue from online or virtual sales. As the market environment shifts and changes, investors may also have the opportunity to capitalize on the growth potential of the e-commerce segment. Amplify also expanded its line with the Amplify International Online Retail ETF (XBUY) . XBUY is an index-based ETF that takes on foreign companies or those outside the U.S. that are expected to benefit from the increased adoption of e-commerce around the world.
Additionally, the Global X E-commerce ETF (EBIZ) reflects the performance of the Solactive E-commerce Index and looks to invest in companies positioned to benefit from the increased adoption of E-commerce as a distribution model, including companies whose principal business is in operating E-commerce platforms, providing E-commerce software and services, and/or selling goods and services online.
<<<
>>> Shopify Is Going All-In on Remote Work
"I don't think there's a going back to the office the way we had."
Motley Fool
by Evan Niu, CFA
May 22, 2020
https://www.fool.com/investing/2020/05/22/shopify-is-going-all-in-on-remote-work.aspx
Work may never be the same for many people across industries, even after the COVID-19 pandemic abates. Some experts believe that the coronavirus outbreak will cement remote work as a viable model for many companies that can feasibly pull it off. Tech companies tend to be better positioned for those arrangements, as software engineers can ostensibly code from anywhere.
Twitter and Square -- both led by CEO Jack Dorsey -- have recently announced permanent policies allowing employees to work from home, for example. Shopify (NYSE:SHOP) is the latest to go all-in on remote work.
There's no going back
Shopify CEO Tobi Lutke announced the change on social media, proclaiming that the e-commerce tech company is now "digital by default." Previously, most Shopify employees would come into an office while others would work remotely. Lutke expects that dichotomy to flip in the near future, where centralized offices will merely serve as a way to help new hires transition to remote working environments.
Tobi Lutke ????????
?
@tobi
· May 21, 2020
As of today, Shopify is a digital by default company. We will keep our offices closed until 2021 so that we can rework them for this new reality. And after that, most will permanently work remotely. Office centricity is over.
Lutke notes that many Shopify merchants work from home already, so having Shopify employees work in a similar way can actually help workers better understand customers' perspectives and have "more empathy." Pivoting to new ideas is a key skill in the world of tech. The Shopify chief executive shows that sometimes pivots can apply to corporate culture and not just product strategy, particularly under extraordinary circumstances.
A lot of logistical details remain unclear, but Lutke is confident that Shopify can navigate the changes. Embracing remote work will also inevitably expand the global talent pool Shopify can tap now that hiring isn't constrained by physical proximity to an office.
Shifting to remote work can have important implications on a company's cost structure, as physical offices are expensive to lease and maintain. Shopify plans to redesign its offices for a digital experience, and Lutke expects just 20% to 25% of employees to work in a traditional office environment.
"I don't think there's a going back to the office the way we had," Lutke told Bloomberg. "I think we will go back to something different, potentially better in some ways and potentially in some instances also worse than it might have been."
<<<
Shopify - >>> Here's How Much Investing $1,000 In The 2015 Shopify IPO Would Be Worth Today
Benzinga
Wayne Duggan
May 21, 2020
https://finance.yahoo.com/news/heres-much-investing-1-000-213019334.html
Investors who owned stocks in the past five years generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return over that stretch is 53.8%. On this day five years ago, Shopify Inc (NYSE: SHOP) held its IPO, and IPO investors have made a killing ever since.
Shopify’s Big Debut
E-commerce solutions giant Shopify was founded in 2004 and made the move to go public 11 years later. It priced its IPO at $17 per share on May 21, 2015. Shopify had initially targeted the $12 to $14 range, but robust demand pushed the price up to $17 and allowed Shopify to raise $131 million by selling 7.7 million shares. At the time of its IPO, the company was valued at $1.27 billion.
After selling IPO shares at $17, Shopify shares hit the ground running, soaring up to $42.13 during the frenzy surrounding its IPO. However, the stock soon ran out of steam due in part to concerns over the stock’s IPO lockup expiration.
Shopify shares dropped to their all-time low of $18.48 in early 2016 before beginning a multi-year ramp on the strength of impressive growth and bullish headlines.
Amazon Effect
One of the biggest headlines came in January 2017 when Shopify announced a new integration with Amazon.com, Inc. (NASDAQ: AMZN) that would allow merchants to sell on Amazon’s platform via their Shopify stores. Shopify shares initially jumped nearly 10% following the news.
Shopify stock hit $100 in 2017, $200 in early 2019, $500 in early 2020 and was one of the few stocks that hasn’t been derailed by the COVID-19 outbreak. In fact, Shopify hit its all-time high of $778 on Thursday, the five-year anniversary of its IPO.
2020 And Beyond
Five years later, Shopify IPO investors that have held onto their stakes undoubtedly see the stock as one of the best investments of their lives.
In fact, $1,000 worth of Shopify IPO stock in 2015 would only be worth about $45,764 today.
Looking ahead, analysts expect Shopify to finally cool down a bit in 2020. The average price target among the 27 analysts covering the stock is $725 suggesting 6.4% downside from current levels.
<<<
Amazon Prime Air Seen Surging Fivefold to 200 Jets, Rivaling UPS
Bloomberg
By Spencer Soper
May 22, 2020
Kentucky air hub could emerge as key to more national service
Amazon now offers service to small a number of destinations
https://www.bloomberg.com/news/articles/2020-05-22/amazon-prime-air-will-grow-to-200-planes-rival-ups-study-says?srnd=premium
Amazon.com Inc.’s Prime Air fleet will grow to about 200 planes -- up from 42 now -- in the next seven or eight years, creating an air cargo service that could rival United Parcel Service Inc., according to a study.
“At a time when many other airlines are downsizing due to the pandemic, Amazon’s push for faster and cheaper at-home delivery is moving ahead on an ambitious timetable,” said the report issued Friday by DePaul University’s Chaddick Institute of Metropolitan Development. “Amazon Air’s robust expansion makes it one of the biggest stories in the air cargo industry in years.”
Amazon unveiled the air cargo service in 2016, prompting speculation that it would ultimately create an overnight delivery network to rival delivery partners UPS and FedEx Corp.
Prime Air operates out of smaller regional airports close to its warehouses around the country, helping Amazon quickly move inventory to accommodate one- and two-day delivery. For that reason, some analysts have dismissed Amazon as a potential competitor to UPS and FedEx since it can only offer limited service to a small number of destinations and seems designed to handle Amazon packages.
Key to its ability to take on the entrenched players, the report says, is Amazon’s new $1.5 billion facility near Cincinnati that will accommodate up to 100 planes and as many as 200 flights each day. Amazon’s lack of a central hub has kept it from competing in the overnight delivery services offered by UPS and FedEx, which have more planes flying to more destinations.
“The massive investment being made in a large hub at Cincinnati/Northern Kentucky International Airport, however, could change everything,” the report says. “This hub appears to be the linchpin to Amazon’s efforts to develop a comprehensive array of domestic delivery services.”
A separate report released Monday noted Amazon’s lack of a central hub in concluding it was not a competitive threat to FedEx, which has a hub in Memphis, or UPS, which has one in Louisville. FedEx’s network can offer 9,000 daily flight connections, UPS’ 5,500 and Amazon Air just 363, according to the report from Bernstein.
“The viability of a commercial overnight offering from Amazon remains very limited,” Bernstein analyst David Vernon wrote. “Offering a low cost on shipping to a small number of markets every so often will never be a serious competitive threat.”
<<<
>>> E-commerce ETFs rally sharply as bricks-and-mortar underwhelms
May 19, 2020
By Andrea Riquier
https://www.marketwatch.com/story/e-commerce-etfs-rally-sharply-as-bricks-and-mortar-underwhelms-2020-05-19?siteid=yhoof2&yptr=yahoo
E-commerce focused exchange-traded funds jumped Tuesday as a fresh round of updates from big retailers confirmed more consumer activity was moving online. The ProShares Online Retail ETF (ONLN), -1.22% rose nearly 2% midday, while the Amplify Online Retail ETF (IBUY), -0.51% and Global X's E-Commerce ETF (EBIZ), -0.33% were both up 1.3%. The ProShares fund, which was enjoying its biggest daily move in about three weeks, has as its biggest holding shares of Amazon.com Inc. AMZN, -2.05%, while EBIZ has its biggest position in Shopify Inc SHOP, +3.13% and IBUY's biggest holding is Revolve Group Inc. RVLV, +0.45%. On Tuesday morning, Walmart Inc. WMT, -0.36% said U.S. same-store sales rose 10%, but online commerce surged 74% as Americans hunker down at home to wait out the coronavirus pandemic. Separately, Pier 1 Imports Inc PIRRQ, -17.64% said it would file for bankruptcy protection.
<<<
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |