Tag Archives: Retailers

The public cloud market is expected to reach $411 Billion by 2020 and one of the fastest growing cloud provider in the world is Alibaba

Alibaba Group Holding Limited has declined since March this year after recent trade war fears. It`s not fair if you look at the numbers. The company boasted a five-year CAGR of over 40 percent, and their revenue is primarily driven by core e-commerce.

Alibaba`s Market cap is $464,72 Billion, and that valuation is good if you look at their potential for growth like cloud computing which is growing fast. They are also expanding in the Indian market with good help from Softbank.

Softbank has already acquired many important startup companies in India, and India will be one of the most important markets for Alibaba in the future. Alibaba and their ally Softbank will therefore build its business on companies that is already operating in the Indian market instead of doing it all from scratch.

The online retail market in India is growing fast and Alibaba can grow in this sector despite the fact that they are late into the market. Alibaba led a funding round of $300 million in online grocer Big Basket at a valuation of $950 million.

But they have competitors. Amazon will invest over $5 Billion in Amazon India, and Valmart wants to buy about 80 percent stake in Flipkart. Valmart is willing to pay about $12 Billion. Alibaba will also earn from Softbank`s investment in rival online grocer Grofers.

Alibaba`s core commerce segment comprises marketplaces operating in retail and wholesale commerce in China, and international commerce. The Cloud computing segment, which comprises Alibaba Cloud offering a complete suite of cloud services, is in top gear.

Cloud computing is good for Alibaba as more and more businesses are shifting their servers and broadband subscriptions to cloud computing technology in order to streamline costs.

The public cloud market is expected to reach $411 Billion by 2020, and Alibaba with its ongoing initiatives is well posed to grab the growth opportunity. I have a good reason to belive that cloud computing will be one of Alibaba`s major growth drivers in the future.

Alibaba has expanded overseas to Singapore, Malaysia, Indonesia, Frankfurt, London, Paris, New York, San Mateo, Dubai, Seoul, Tokyo and Sydney. So far, they have more than 2,3 million customers worldwide.

In the last report, cloud computing segment increased 104 percent to US$553 million, and revenues from its core commerce segment were up 57 percent YoY to US$11,3 Billion.

Alibaba is probably the most shorted stock in the world in recent weeks after trade war fears, but their opportunity for further growth will probably exceed investors expectations. If so, Alibaba`s shares can easily jump to next target; $200.

Alibaba Group Holding Limited is expected to report earnings on May 4 before market open. The report will be for the fiscal Quarter ending March 2018. Earnings forecast for the quarter is $0,7 which is well below earnings for the same quarter last year of $0,39. Last quarter, Alibaba delivered a negative earnings surprise of 1,21 percent.

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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Home Depot and the broader recovery in the housing market

This is a week for retailers. I will take a closer look at Home Depot on Tuesday. Their business tells us a lot about the activity in the market. The fact is that Home Depot is at its highest level ever! The stock has gone straight up since the financial crisis.

The numbers from the retailers indicate that consumers are spending money some places and a more lackluster sluggish consumer spending other places, but one is for sure; Americans love to fix their own houses.

 

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Home Depot Inc is the largest home-improvement retailer in America, and the company is set to report earnings on Tuesday 16th, before the market opens for trading.

The broader recovery in the housing market since the financial crisis have helped Home Depot`s recent jump. So have the consumers improving experience. On top of that you can add an extremely low-interest rate.

Other things that have helped Home Depot is the unemployment rate which is down below 5%. It seems like the consumers are earning money and spend a lot of money on their own homes. They buy properties because the housing prices are high.

Sales growth last quarter topped 21% from online sales. That is helped from the company`s focus on innovation which include Milwaukee Pneumatic Framing Nailer, the 20-volt Max Brushless Finish Nailer, and the Pergo Outlast Plus Laminate Flooring.

Home Depot`s Gold Medal Employees is interesting. Since 1992, Home depot has employed 570 Olympic hopefuls in its Olympic Job Opportunity Program. The program provided athletes with benefits and flexibility for training and competition, and the program was discontinued in 2009.

The Estimize consensus is looking for earnings of $1,98 per share on $26,49 billion in revenue. Compared to a year earlier, earnings are expected to increase by 15% with revenue increasing 7%.

 

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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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Do you know the Target?

Last week I wrote about the biggest U.S retailer Wal-Mart. While the stock market had a terrible start of the year, Wal-Mart went in the opposite direction. What about the second largest discount retailer Target? The stock have so fare in 2016 been flat.

Target is over 100 years old, founded by Goodfellow Dry Goods in 1902, but the first Target store was opened in 1962. A lot of things have changed since then. Target operates 1,801 locations throughout the U.S.

Their retail formats include the discount store Target, the hypermarket SuperTarget, and small-format stores previously named City Target and TargetExpress before being consolidated under the Target branding.

Target

A lot of retailers will come out with reports this week, and Target is one of them. They will report on February 24, before the open.

Estimize is looking for EPS of $1,54 and revenue of $21.896 billion, in-line with Wall Street on the bottom line, and around $35 million greater  on the top-line. Target is projecting relatively flat earnings growth compared to the same period last year.

Target has gone online long time ago, and they had a record online traffic during the recent holiday shopping season. Amazon is the king in online-shopping and Target has a long way to go to come up to Amazon`s level.

Last quarter, digital channel sales surged 20% while also adding to comp store sales growth.

Target have a lot of job to do at handling massive inflows, and days like Cyber Monday, Black Friday and the holiday season are leaving many consumers frustrated. The company have made strategic hires combined with a renewed focus on higher-margin apparel.

Compared to Wal-Mart, Target generate above-average margins which is higher than their biggest rival Wal-Mart. The reason for that is Target`s higher –margin segments like home goods which accounts for about 36%. Wal-Mart generates only 14% in that segment.

Consumer prices in the U.S went up 1,4% YoY in January of 2016, following a 0,7% increase in the previous month. The inflation rate accelerated for the fourth straight month, but the U.S food inflation has dropped sharply last 12 months. From 3% last year to only 0,8 in January 2016.

Target hope to reach their goal in 2016 with a new and fresh leadership at the top. One of their goals is to make a multi-channel approach, which means they are looking for customers who shop in more than one channel at a time.

Their smaller-format stores will be 50% smaller than the typical 130,000-square-foot stores. Target`s urban locations will be about 45,000 square feet in size, and the reason for that strategic change is that the productivity levels are double those of traditional stores, and those stores will come in busy city centers.

Target recently sold its pharmacy business to CVS in a deal worth $1,9 billion, and in the next 6 to 8 months all 1672 Target pharmacies will be rebrand to read CVS, operating through a store within a store format.

This partnership is expected to serve as a compliment to the customer experience which will help drive higher traffic. The company is also focusing on the development of smaller format stores to penetrate urban and metropolitan areas.

In addition; Target has eliminated over 3000 stores and corporate employees in the U.S, estimated to save the company $2 billion.

All the changes makes Target`s future bright and I assume the new employees know the new target.

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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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Home Depot earnings report tomorrow morning

Home Depot (HD) is a do-it-yourself home improvement retailer. The firm operates The Home Depot stores, which are a full-service, warehouse-style stores. HD stores serve three primary customer groups; do-it-yourself (D-I-Y) customers, do-it-for-me (D-I-F-M) customers and professional customers.

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In February 2013, HD acquired Measurecomp LLC and HD components LLC. About one year later, in January 2014, HD acquired Blinds.com.

It`s only a few companies left to reveal their earnings this time, and tomorrow morning Home Depot (HD) will report their latest earnings. Last time HD reported earnings they had an earnings growth of 23%, but this time it is estimated an earnings growth of «only» 21%.

That will be down two ticks, but that`snot bad, because a 21% boost to the bottom line will be the second best quarter last year. The growth seems to continue, as the retailer has seen some solid growth on the bottom line over the past two years.

HD reported a sales growth of 3% and 6% in the first two quarters, and this growth is expected to decline to 5%. Analysts consensus is expecting $1,13 in earnings per share. Revenue is $20,500 billion YoY.

When HD reports positive earnings report Q3 like the one we will see tomorrow, it usually boost the stock price. It is expected to see similar things to happen and HD will continue to lead the industry.

Some analysts belive that the industrial retail sales companies like HD will lose market shares against the online sales. It will simply kill the market sector, but despite that, it is expected to see solid earnings report from HD tomorrow morning. Positive news for HD tomorrow is good news for long perspective investors. The stock is up 19% YTD, and 17% last three months.

 

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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