Nestle has announced increased share buybacks to reward shareholders for their faith in the stock. After activist investor Dan Loeb pressured the food giant, the company responded with steps to improve its performance. Last week we wrote to you about Nestle being one of the most conservative stocks in the world. Now management is focusing on making the stock even more attractive for shareholders. Saabira Chaudhuri reports on Nestle's announcement in the WSJ: Nestlé SA on Tuesday introduced a profit-margin target and said it would accelerate share buybacks amid pressure from activist … [Read more...]
Who’s Creating the Best Wearable Tech? Could be Google and Levi’s
Wearable technology has taken a lot of twists and turns. The Internet of Things has been trying to find a place on the human body for awhile now. Perhaps the best known attempt was Google Glass. The futuristic glasses allowed users to interact in new ways with the world around them, but mostly made them look obnoxious. Today the fitness world dominates wearable tech, with FitBits, Garmins and Apple Watches on many Americans' wrists. But it's possible Google has learned the lessons of the broad reaching Google Glass. Now the tech giant is trying something new in wearables; small, niche … [Read more...]
Consumer Goods Titan Looks to Asia for Expansion
In a search for new markets, Unilever is expanding in the South Korean skincare market via the acquisiton of Carver Korea. Carver makes masks and lotions and is currently owned by Bain Capital and Goldman Sachs. Carver is the country's third largest cosmetics company and has operations in China and Japan. Naomi Rovnick and Song Jung-a report in the FT: Paul Polman, Unilever’s chief executive, is looking to boost shareholder returns against lacklustre growth in developed economies, with a focus on new products and emerging markets. The Anglo-Dutch consumer goods group’s latest deal comes after … [Read more...]
Yellen Still Can’t Understand What the BIS has Known for Years About Inflation
Janet Yellen & Co. are puzzled by low inflation and low unemployment. The proper measurement of inflation is part of the Fed’s conundrum, but here the Bank for International Settlements points to another powerful factor dragging down inflation—globalization. Greater globalization creates greater supply and hurts pricing power. As the BIS points out, these are structural factors. Any aggressive effort to fight against structural factors holding down inflation is likely to do more harm than good in the long-run. Paul Hannon reports: Globalization is the most likely explanation for … [Read more...]
Is This the Beginning of the End for Fossil Fuel Energy?
Originally posted December 27, 2017. The World Economic Forum reports that new solar and wind capacity are now cheaper than new fossil fuel energy in 30 countries. Quartz has more of the details. The renewable energy future will arrive when installing new solar panels is cheaper than a comparable investment in coal, natural gas or other options. If you ask the World Economic Forum (WEF), the day has arrived. Solar and wind is now the same price or cheaper than new fossil fuel capacity in more than 30 countries, the WEF reported in December (pdf). As prices for solar and wind power … [Read more...]
Is Intense Investor Optimism a Sign of the End?
Investors are more optimistic than they have been for 17 years. The question is, does that bode well or ill for future stock performance? The last time optimism was so high was just when the bottom fell out of the market in 2000. Howard Gold explains in MarketWatch: The latest Wells Fargo/Gallup Investor and Retirement Optimism Index hit 138 in September, its highest level in 17 years. That was in September 2000, when investors still couldn’t shake their denial that the bull market of the 1990s was over. It’s also a full 98 points higher than the 40 it registered in February 2016, when … [Read more...]
Dividends are Better than Buybacks: Here’s Why
The FT reports that stock buybacks are fading and the performance of companies that buyback shares is trailing the broader market averages. Companies that return cash to shareholders in the form of buybacks are better than those that don't return any cash at all, but companies that favor dividends are the clear winners in our book. Dividends are more consistent and most often more reliable than buybacks. Corporate share buybacks have been the single biggest source of demand for US equities since the financial crisis, as companies largely shunned business investment plans in favour of … [Read more...]
This is One of the Most Conservative Stocks in the World
Nestle is adding to its coffee business with an acquisition of the high-end coffee roaster and retailer Blue Bottle Coffee. The Wall Street Journal reported on it here. The acquisition is a small one for Nestle, but it is a savvy move to remain competitive and relevant in the food business. Change is afoot in the packaged foods industry. Brands that have dominated the industry for decades are under assault. Changing consumer tastes and shifting media consumption patterns are eroding the competitive position of branded packaged foods companies. Nestle’s Strategy for a New Environment As … [Read more...]
Did You Miss the Boat on the British Pound?
The pound is rallying today on news of a more hawkish Bank of England and comments from the European Union President that there won’t be a hard Brexit for England. Young Research turned bullish on the pound in the spring. The pound is up a few percentage points since then, but with a supportive technical backdrop and strength in the euro upside potential remains. … [Read more...]
Amazon Will Join the Tech Headquarters Arms Race
In the arms race to have the largest, most ostentatious tech headquarters of all, Jeff Bezos wants in. With Apple's Spaceship nearly up and running, and Google working in its moon-base-like dome called Charleston East, and the workforce of Facebook settling in nicely to their Menlo Park garden-roofed campus, Amazon wants to get in on the new headquarters action. James Mackintosh writes that the roll out of new headquarters is the latest warning sign for investors. He explains that high capital spending is usually a sign of pending under-performance. The list of warning signals for … [Read more...]
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