Category Archives: Stocks

Your Phone is your wallet!

It is a nightmare to walk around with all this physical cards in the wallet, like debit cards, credit cards and all the gift cards. What if we can store all this things in a phone? What about all the paper money and coins that is growing in your wallet like a balloon in your pocket? Do we need this?

Google giftcards

Google and Apple is one of my favorite companies in this universe, with high degree of innovation. Google demonstrated the new Google Wallet at a press conference on May 26, 2011, but it was released for the U.S market only on September 19, 2011.

Google Wallet is a mobile payment system that allow its users to store debit cards, credit cards, loyalty cards and gift cards among other things, as well as redeeming sales promotions on their mobile phone.

The integration of Google Wallet and Gmail allows users to send money through Gmail attachments, and this reminds me like PayPal. You can simply send money to your friend with a simple email address. It can`t be more easy.

I`m not in doubt, this wireless payment solution is a product for the future, but so far it`s not a big hit in the U.S. The service works with the 300,000 plus MasterCard PayPass merchant locations, with Visa licensing their Visa PayWave system to Google for use in Wallet as of September 20, 2011.

Google is probably not the right company for this business? It is a great business in China, so we know it works out there. Apple is probably the right company to do something with that. They are the right company to fix it.

Apple will launch its new iPhone 6 on September 9, and it will feature NFC (Near Field Communication), according to rumors. Apple`s biggest post-PC rival Google is already implementing NFC for wireless payment.

There is a huge difference between Google and Apple. First of all; Apple has much more phone users than Google, and they already hosts millions of credit cards and processes billions of dollars worth of transaction through its mobile application and content store.

Apple can implement the new wireless system on its hundreds of brick and mortar stores and give users a big reason to sign up for the new system. They can lauch some promotions in the stores to attract more NFC transactions.

Apple have a big opportunity as a marketing platform by generating advertising revenue from customer brands wanting to reach shoppers while in a store. Itunes accounts have been used in Apple`s marketplace, but is very tiny compared to the vast retail market.

Tesla`s CEO Elon Musk`s «baby» and now eBay`s Paypal and Square will be challenged. PayPal is still very popular, many thanks to a large pool of merchants that supports the system. Square which recently introduced money transfer through text messaging will probably lose some market share in the future.

The U.S consumers has not yet adopted the Google Wallet, and Apple`s success with their wireless transaction system will largely depend on the acceptance of the retail industry. A group of chains has formed a company in 2012. One of them is Wal-Mart Stores Inc, and they will try to build a mobile-payment system which is not yet released.

Apple seems to cooperate with Visa, MasterCard and American Express, but this is still rumors. I will wait for some more news on September 9. Anyway; wireless money transaction is a lucrative business. The whole world is built on money transactions.

 

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GoPro IPO today

It`s headed for the largest consumer-electronics debut in 23 years today, as GoPro, the video-camera maker is going public. So far, the company has been privately held, but now it is open for the public.

white-edition

The latest consumer-electronics IPO was in 2011. Headphonemaker Skullcandy Inc raised $189 million in their debut. We had another deal in the same sector when another headphone company called Beats ElectronicsLLC agreed to a $3 billion buyout by Apple Inc.

GoPro plans to sell as much as $427 million stocks in the IPO today, and that would mark the largest consumer-electronics IPO since Duracell`s debut in 1991. They raised $433 million at that time, and Procter & GambleCo bought the company six years later.

GoPro will raise $427 million by offering 17,8 million shares (50% insider) at $24, the high-end of the $21 – $24 range. At the IPO price, GoPro will have a fully diluted market cap of $3,5 billion and an enterprise value of $3,3 billion.

GoPro will list on the NASDAQ and their trading symbol will be GPRO. Barclays, City and J.P. Morgan acted as joint bookrunners on the deal, and analysts at the bank expect the deal to value it at about 25 times projected earnings.

If the price of GoPro is $24, the company would have a richer price/earnings ratio than Apple Inc, which trades at about 13 times analysts 2015 profit forecast. Garmin Ltd trades at 20 times.

The bull market in initial public offerings rolls on, and so far in 2014, there have been 144 U.S IPO`s, raising $30 billion. This puts the IPO market on pace for the busiest year since 2000, both by dollar volume and number of deals.

The question mark now is whether the GoPro`s shares are being priced appropriately.

Reports today:
08:30 a.m EST Unemployment Claims
08:30 a.m EST Core PCE Price Index
08:30 a.m EST Personal Spending

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Rolls Royce up 6% on buybacks

 

All the commodities are up today. Silver up +0,92%, Gold +0,76%, Copper +0,23% and Oil (brent) is up +0,31%. Nikkei is also up today, as it advanced +1,62%. ASX 200 is up +1,59%. Europe is in a green territory too. Stoxx 50 is up +1,11%, FTSE 100 is up +0,83%, CAC 40 +0,89% and DAX is up +0,78% to 10,008,17 points right now (13:14:00 CET).

rolls_royce_2-wallpaper-1920x1080

(Picture: Rolls Royce)

The crude oil price have never been so high this year and that`s because the conflict that is going on in Iraq right now. The Iraqi government forces battling Sunni militants for control of the country`s biggest refinery. The rally in Asia and the rest of the global stock market is because of the FOMC meeting yesterday.

The stocks rallied after the U.S Federral Reserve signaled that rising inflation won`t trigger an interest rate rise any time soon. investors liked it and sent the European bourses up sharply today. Asian equities posted strong gains, and S&P 500 rose to another record high yesterday.

The Fed Chair Janet Yellen slashed its 2014 growth forecast but expressed confidence that the economy will continue to recover steadily in the coming years, which could warrant a slightly more aggressive pace of interest rate hikes when they start.

That probably won`t be until the middle of next year, and Fed Char Janet Yellen dismissed the resent rise in inflation to its highest in over a year as «noise». Some people were speculating that the Fed would have to come up with a more hawkish commentary and obviously they have been disappointed.

But there were one loser yesterday after FOMC meeting yesterday; the dollar, which fell against major and emerging market currencies, in tandem with U.S Treasury yields, hitting a five-year low against sterling.

A big winner in the European stock market among the blue-chips was Rolls Roys RR.L. An auto car maker for the luxus market. The stock rose 6% after it announced a one billion pound ($1,69 billion) share buyback.

 

Reports today:

08:30 a.m EST Unemployment Claims

10:00 a.m EST Philly Fed Manufacturing Index

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

 

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Tesla Model X could be delayed until early next year

 

Green energy like solar and battery driven automotive cars are great business, and Tesla Motors is one of the most interesting and exciting automotive companies in the U.S to watch right now. The company lost $50 million in Q1 and they will probably continue to lose money, so their new  Model X could be delayed until 2015.

tesla_model_x-wide

They produced 7,535 new cars in the first three months of this fiscal year, and lost $50 million on GAAP basis, using the non-GAAP method that Tesla prefers, it saw $17 million in net income. EPS is $0,12, and that was less than some of the rosier forecasts.

 

The demand for Tesla is rising and their demand rose 10 percent in the quarter. China can become the biggest market, and Elon Musk said he is «blown away» by the level of enthusiasm in China. There is a five month wait for the cars and some customers are frustrated.

 

It`s Fremont factory will be shut down for ten days in July whilst it installs a new, more efficient production line with more automotive. If the Gigafactory and Gen III production aren`t well synchronized, Tesla will be in big trouble.

 

Things never run perfectly smoothly and there is some bad news for waiting Model X customers. CEO Elon Musk said Model X will be delivered in the second quarter of 2015, pushing back the expected date by a couple of months.

 

guidance for Model S is 7,500, up from 6,457 delivered in Q1. Tesla have started to deliver in U.K and China, which is two new markets with great demand. It`s hard to be negative about the numbers in light of the two new markets and Q2 production already having been sold. So, why does the quarter look like it will go down to the wire?

 

It`s estimated that Tesla`s May deliveries will come in at 1,000, and this is down from 1,100 in April. It`s also down from 1,700 in May last year. It looks like the delivery in U.S has peaked for a long time, and that stagnation is the result right now. This will be interesting for Q3 and Q4, since Tesla will run out of large new markets except for Japan.

 

The biggest market is U.S, and the second largest market is in terms of population, is Norway, which had a massive month of March, but at this point it is looking peaked. This is just how the automotive market work.

 

On june 12, CEO Elon Musk wrote a blog stating that Tesla would not initiate lawsuits against anyone who wishes to use their technology in good faith. They are not anti-competitive and do not entrench the power of dominant firms in their respective markets. The terms must be applied in a non-discriminatory manner, and rights are licensed at rates that if aggregated would not make the industry uncompetitive.

 

CEO Elon Musk wrote:

“Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor…”

 

Tesla`s move to open its patents is about hardcore strategic thinking. They simply try to remove obstacles to EV industry growth by helping develop homogeneous solutions. Tesla can use this as a Trojan horse to become a toll collector on all EV revenues in the future.

 

It`s a growing concern among different investors that Tesla would not be able to repay $2,2 billion in debt in the next four to seven years. Bonds were assigned a junk rating in May by credit rating agency Standard & Poor`s.

 

Tesla is in partnership with other vehicle manufacturers like Toyota and Daimler. Toyota bought $50 million worth of stock when Tesla went public in July 2010, and Daimler spent $50 million for a 10 percent stake in 2009. Both companies relied on Tesla for help in the development of electric vehicles.

 

Daimler uses a Tesla battery in the electric version of its Smart City car, and its Mercedes B-class EV features a Tesla power train. Toyota signed a $100 million-contract with the company to supply power trains, gearbox and software for the RAV4 EV, and the deal ended in May 2014.

 

Model X reservation confirmations went out early and so far Elon Musk hasn`t given shareholders a reason not to trust him. No doubt that Tesla longs are a cultish, giddy group of investors. Tesla is a revolutionary green company that belongs to the future.

 

Reports today:

08:30 a.m EST Building Permits

08:30 a.m EST Core CPI m/m

08:30 a.m EST CPI m/m

08:30 a.m EST Housing Starts

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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Food prices are up – so are Giggles N Hugs

 

It`s not going to be easy for the restaurants if the cost is rising. A beef is 25 percent higher now than at the end of last year. If this continue, the restaurants need to rise the prices on the products they have on the menu. Or they can simply change the menu.

Giggles N Huges logo

What does that mean for the customers? It means it will be more expensive to eat out, so it will be a question about eating out or going the long way to the refrigerator. This is not good news for the restaurants as the industry is grappling with excess capacity and declines in foot traffic.

 

This is why it makes it difficult for the restaurants to rise their prices because they can lose a lot of customers. In addition; disposable income growth as the primary driver of consumer spending hasn`t improved in this slow recovery since the financial crises started in 2008.

 

According to the Bureau of Labor Statistics monthly consumer price index, the cost of eating at home rose 1,7 percent in April, while consumers paid 2,2 percent more at U.S eateries. Food-at-home inflation has been accelerating, and May data on retail prices will be released tomorrow.

 

It`s not a good ting when prices are increasing as the wages remains low or declining, but there are one out there that is waiting for the prices to increase; the Fed. Their inflation goal is about 2 percent, and they are now looking for signs that companies are able to pass along higher costs to their customers.

 

According to the Beige Book from June 4, policy makers said price pressures are «contained», some are reporting rising food costs and that is particularly meat and dairy products. For example beef and pork is now more expensive at grocery stores, so restaurants will probably boost prices of certain menu items.

 

McDonald`s is up 3,6 percent YTD, while Chipotle Mexican Grill is up 10,4 percent YTD. This big companies, but what about a smaller one; Giggles `n` huge, which is up 20,69 percent in one day! This can be a growth company in the future.

 

The company operates a kid-friendly restaurants in California. They are known for its own creation called Mom`s Tricky Treat Sauce, which hides pureed vegetables in kid`s favorite meals, such as pizza, pastas and macaroni and cheese.

 

Its restaurant features kid-size castles, giant climbers, a pirate ship, and a walk-on dragon, as well as tricycles, swings, bouncies, and an abundant selection of toys in each location. Their stock price rose 20,69 percent on friday, closing at 0,700. When was the last time McDonald`s made jump like this?

 

Reports today:

08:30 a.m EST Empire State Manufacturing Index

09:00 a.m EST TIC Long-Term Purchases

09:15 a.m EST Capacity Utilization Rate

09:15 a.m EST Industrial Production m/m

10:00 a.m EST NAHB Housing Market Index

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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Uber – a Taxi killer?

 

Uber is a venture-funded startup and transportation network company based in San Fransisco, California, that makes mobile apps that connects passengers with drivers of vehicles for hire and ridesharing services. The company arranges pickups in dozens of cities around the world.

Uber logo

Uber drivers had cars such as Lincoln Town Cars, Cadillac Escalades, BMW 7 Series and Mercedes-Benz S550 sendans. After 2012, Uber added a wider selection of cars to market to a broader cross-section of the market, called UberX.

Cars are reserved by sending a text message or by using a mobile app. Using the Apps, customers can track their reserved car`s location. The company has not released the names of its investors, but it has been widely reported that Fidelity Investments leads the investment.

Uber is probably the biggest Taxi-killer in history. Three days ago, in a concerted action, taxis blocked roads in major European cities in protest against what they perceive as a threat to their livelihood by companies such as Uber.

The cabbies contended that Uber and similar smartphone app-based services have an unfair advantage because they`re not subjected to the same kinds of fees and regulations placed on taxi’s. Uber is controversial.

Uber`s pricing is similar to metered taxis although all hiring and payment is handled exclusively through Uber and not with the driver personally. If the Uber car is travelling at a speed greater than 11 mph, the price is calculated on a distance bases.

Otherwise, the price is calculated on a time basis. At the end of a ride, the complete fare is automatically billed to the customer’s credit card. Uber has said that its high prices are the premium that the customers pay for a cab service that is not only reliable but also punctual and comfortable.

During holiday times, Uber increases its prices to «surge price» levels to reach an economic equilibrium by attracting more drivers. During New Year`s Eve 2011, prices were as high as seven times normal rates, causing outrage in response.

Uber was founded as UberCab by Garrett Camp and Travis Kalanick in 2009. One year later they received venture funding from a group of super angel investors in Silicon Valley, California, including Chris Sacca.

In 2011, Uber raised more than $11,5M in Series A funding led by Benchmark Capital. In later 2011, Uber further raised $32 million in funding from several investors that include Goldman Sachs, Menlo Ventures and Bezos Expeditions bringing their total funding amount to $49,5M.

The company entered the London market in July 2012 with an initial staff of about 90 drivers of Mercedes, BMW and Jaguar. One week ago, Uber announced $1,2 billion in funding in its latest round. The round values Uber at around $17 billion pre-money.

Several drivers have credited Uber for increasing their potential earnings by 30%. The company faces competition from lower-cost real-time ridesharing startups such as Lyft and SideCar. To compete at lower price levels, Uber has introduced UberTaxi (partnerships with local taxi commissions) and UberX (non-luxury cars such as Toyota Prius Hybrids).

Last month, London black-cab drivers, members of the Licensed Taxi Drivers Association, threatened to disrupt traffic in June if Transport for London (TfL) refuses to ban Uber in London. The New York City Taxi and Limousine Commissions has discouraged drivers from participation in Uber, resulting in suspension of Uber`s New York taxi service in October 2012.

Uber has been accused in several jurisdictions of illegal taxicab operation. It`s understandable that they changed their name from UberCab to Uber. Following a social media campaign by Uber`s users, the D.C City Council voted to formally legalize Uber`s service, with no minimum fare.

They have more competitors to come. China`s biggest taxi app is Didi and they books over 5 million rides a day! The company which is registered in the Cayman Islands, will do an IPO in three to five years in the U.S. Didi`s app is backed by Asia`s largest Internet company Tencent Holdings Ltd and their biggest competitor in China is Kuaidi, which is backed by Alibaba Group Holding Ltd.

Didi is owned by Beijing Xiaoju Keji Didi Dache Co and they are planning to have 1,500 employees at the end of this year. Kuaidi is owned by Hangzhou Kuaidi Technology Co., operates in a similar way and allows payments and rebates through Alibaba’s mobile-payment system, Alipay Wallet.

It`s gonna be a great battle between those apps in the future, and the largest player will win greater support when it comes to raising capital and that will in turn help them to grow and be bigger than their competitors.

 

 

Reports today:

08:30 a.m EST PPI m/m

08:30 a.m EST Core PPI m/m

09:55 a.m EST Prelim UoM Consumer Sentiment

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

 

 

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McDonald`s is growing

McDonald`s (MCD) is growing but that is slowly. It`s share price moved only 8% in 2013, and McDonald`s rewarded its shareholders with a 10% increase to its dividend. The surged 4% YTD. They delivered a high return on equity and their growth in its top and bottom lines was decent.

MCD

McDonald`s holds a market share of 31% in the fast food industry. How can McDonald`s continue to grow? Because the domestic market is saturated, they are now expanding in emerging markets, particularly China, where they have a great opportunity.

The U.S fast food industry is expected to grow 10% during the period of 2013 – 2018. Emerging markets are attractive to fast food players due to their large populations, fast population growth, concentration of younger consumers and growing demand for Western diets.

China is important for McDonald`s and it is the third largest market for the company after the U.S and Japan. They holds a 15% market share of China`s fast food market. They experience a strong growth in the region.

China`s fast food & takeaway market grew 80% from 2007 – 2012 to RMB 1 trillion ($162 billion). The market is expected to hit RMB 1,8 trillion ($292 billion) by 2017. All this is driven by economic growth in China, and McDonald`s is investing heavily in China to benefit from this growing market.

McDonald`s will open 1,600 new restaurants around the globe and spend $3 billion this year. China will get one of the biggest shares. They will open 300 locations in China, and that`s up from 250 last year and quadruple the number in 2004. Their goal is to have more than 2,000 restaurants in China by the end of 2014.

McDonald`s share price and earnings have underperformed relative to the S&P 500 and restaurants peers over the last 12 months. Have a look at the chart below. I have compared McDonald`s and S&P 500 so you could see by yourself.

MCD vs SPX

(Picture: McDonald`s vs S&P 500)

In my opinion; both McDonald’s and Burger King is now trying to be everything for everyone. Can you imagine Burger King selling you a salad? Or a wrap? Come on; what`s next? For all I know, they will start to sell sushi next week. In-N-Out Burger, Chick-fil-A and Five Guys haven`t changed their menu in years. A big menu is making McDonald`s slower.

Many switch to restaurants perceived as more natural, simple and healthy, like Chipotle Mexican Grill (CMG) or Taco Bell which is built on this trend. McDonald’s franchisees lose out and this will be a slowly process as franchisee satisfaction is driven so largely by cash flow. McDonald’s need to take drastic action on their meny complexity and food integrity. Before that I expect the share price to languish.

Reports today:

10:30 a.m EST Crude Oil Inventories
01:01 a.m EST 10-y Bond Auction
02:00 a.m EST Fedral Budget Balance

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

 

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