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markb

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  • Lululemon's Q3 2014 Results Show Promise... Again [View article]
    Good recap of what's happening, but the question of why remains. If customer preferences and competitive pressure are leading to weakness in underlying demand, that would be cause for concern. But if underlying demand is strong and supply chain/inventory issues are limiting choice and driving customers to look in stores then buy online, that head fake could be misinterpreted by bears and spell a swing opportunity. Looking forward to clues when they report 4Q but wouldn't be surprised by a nice beat.
    Dec 16, 2014. 08:17 PM | Likes Like |Link to Comment
  • Raising Concerns About The Positive Results Of Lululemon [View article]
    Not completely relevant to this thread but kind of interesting: I hate Christmas shopping so asked my wife if she just wanted to buy a few Lulu outfits. She already has lots of Lulu but said, "sure, that would be great". Just got the Amex bill: $1,300+. Yikes. And she's normally not crazy. Must say something about pricing/loyalty/demand... or the Kool-Aid they're serving in that place.
    Dec 16, 2014. 12:49 PM | 1 Like Like |Link to Comment
  • Raising Concerns About The Positive Results Of Lululemon [View article]
    Not a particularly useful article in my view. LULU is seeking to grow the business and maintain premium margins. It is not essential to return to previous margins. Positing cost control as the answer is an over-simplification. Margins are being impacted by a number of growth initiatives...which of those are you suggesting they eliminate to control costs, and what would that elimination do to their competitive position? Margins may improve if initiatives stimulate demand so that fixed costs are leveraged while simultaneously distribution is driven to lower cost on-line channel.

    Bottom line is to look at the picture in total and decide if this is inflection...if you wait for every one of your concerns to be completely resolved you will have long missed the rally.
    Dec 14, 2014. 12:19 PM | 5 Likes Like |Link to Comment
  • Is The Turnaround Still On At Lululemon? [View article]
    I remain long (LULU 1/16C$45) for three reasons:

    1. Attribute most of their recent problems (eg supply chain, governance) to "growing pains".

    2. PE guys jumped in big at $42...big green light for us little guys.

    3. Crazy loyalty. Many women (including my wife) view LULU as the women's brand and the women's club. My wife won't even look at Nike/UA/etc. regardless of price or style. Puts a dent in the clothes budget but why fight it?
    Dec 12, 2014. 11:55 AM | 1 Like Like |Link to Comment
  • American Express: Why It's Worth $100 Right Now [View article]
    I agree with your conclusion...couple points to consider:

    AXP returns over 50% earnings in the form of dividends plus buybacks (which you don't address).

    Your valuation is unconventional for a financial services company. If you used it on a growing low ROE bank for example, your value would look higher than a cash flow DCF because in reality the bank would need to retain earnings (regulatory capital requirements) to support growth. That said, a cash flow DCF would look good for AXP compared to that bank because their ROE is so high they don't need a lot of capital to grow, thus the buybacks.

    Revenue growth has been muted but AXP has been exiting some low growth/low return business like lending and travel to focus on high growth payment systems.

    Suggestion: use the word "excess" rather than "abnormal". Abnormal sounds bad, excess sounds good.

    Long AXP.
    Dec 9, 2014. 02:46 PM | 3 Likes Like |Link to Comment
  • Is Keurig Green Mountain Failing Its Investors? [View article]
    If you only have a hammer, every problem is a nail. Your hammers are spreadsheets, capital structure, short term price swings and investment community sentiment. This problem isn't a nail. It is this: Is K-Cold a positive NPV investment, considering the probability and cash flow impact of various outcomes. Of course its hard to calculate financial benefit before the fact---it always is with non-linear technology change. If you're not comfortable it means you should find a less risky stock for you, not that they should give up before they start. I'm long and happy to own a call option on something huge, even if there is a less than 100% chance it works as planned.
    Dec 8, 2014. 07:54 AM | 2 Likes Like |Link to Comment
  • What Was Keurig Green Mountain Thinking When It Acquired Bevyz Global? [View article]
    Good backstory. If single serve cold ever gets huge you could write the history book.

    I believe GMCR has a solid core business with moderate growth potential: 80% US HH still not using single serve. They also have three promising off-core initiatives: K-Cold, K-International, Workplace/Foodservice. If one of those doesn't work it will be disappointing but won't destroy the company. What I like is their commitment...if it does work they will own it. So it comes down to the technology which is hard to imagine working because it hasn't worked before. Like it was hard to imagine an iPod when we were all (if old enough) running around with Walkmans. But we're talking about making a cold 12 ounce drink here, not putting a man on Mars. KO/GMCR/Bevyz/enginneers/ the money...the resources thrown at this challenge are impressive. I'm staying long and will wait and see. Might be risky but if I wait for the proven machine adopted in the marketplace the stock price train will have long left the station.
    Dec 5, 2014. 12:38 PM | 1 Like Like |Link to Comment
  • Keurig buying drink machine maker Bevyz for $220M [View news story]
    Here's my guess du jour: K-Cold was going to infringe on a Beyvz patent and Beyvz wanted too much in royalties so GMCR said screw it we'll just take them out.
    Dec 4, 2014. 05:36 PM | Likes Like |Link to Comment
  • Keurig buying drink machine maker Bevyz for $220M [View news story]
    Why do you think GMCR bought the rest of Bevyz?
    Dec 4, 2014. 05:10 PM | Likes Like |Link to Comment
  • Keurig buying drink machine maker Bevyz for $220M [View news story]
    GMCR/KO do not throw around $220mm for no reason. Obviously shelf space is no longer an issue. Cost/unit comes down at high volumes. Do they need components of technology? International footprint? Or defensive move to preempt competition if K-Cold takes off? Doesn't Bevyz use CO2? Does not appear to be a positive development for SODA.
    Dec 4, 2014. 04:34 PM | Likes Like |Link to Comment
  • Costco Credit Decision Exposes Amex's Weaknesses [View article]
    Really weak stuff here full of unsubstantiated opinion and sloppy characterizations. Author sounds like a guy mad cause he can't use his COF card at Costco.

    Regarding summary...AXP is a leader in the new world of payment processing. And niche player? Try world's largest issuer (not network). Over 20% share of network volume, growing over the last decade, primo customers and premium interchange.

    AXP customers are loyal high spenders. I, for one, go to Costco because I get AXP points. I'm not sure why Costco doesn't simply take all the cards...that would be the most customer centric thing to do. But given Costco decided to limit choice in a grab for more profit, I think it was quite the coup AXP got the exclusive in the first place. And as far as your speculation that dropping Costco will hurt AXP financially...I doubt it. Costco probably negotiated every last cent out of the deal and for AXP its a break-even feel good account.

    If AXP is good enough from the Omaha guy, its good enough for me. I think Costco should just take all the cards and focus on selling their big box junk.
    Dec 4, 2014. 04:08 PM | 7 Likes Like |Link to Comment
  • Why I'm Long SodaStream [View article]
    Actually, no regarding page 7 and 9. But its funny how he describes the benefits of SODA cola on 8, then on 9 says, oh, by the way, tastes like crap.
    Dec 3, 2014. 04:17 PM | 1 Like Like |Link to Comment
  • Why I'm Long SodaStream [View article]
    Compared to his May buy thesis there doesn't appear to be much new here. But, it would be a timely release if he planned to unload his original position in the near future.
    Dec 3, 2014. 01:22 PM | Likes Like |Link to Comment
  • SodaStream: The Carnage Continues [View article]
    Good article. I wonder if the average consumer prospect is aware of the pending K-Cold intro and if so is deferring a SODA buy to wait and see which is better?
    Dec 1, 2014. 10:33 AM | Likes Like |Link to Comment
  • Why You Should Avoid American Express [View article]
    This proves a comment can be both arrogant and non-sensical. Over the last 30 years AXP stock price is up 30x and they now earn over $5B/year. Further, they are a favorite holding of the world's greatest investor. And you feel compelled, without any evidence, to characterize the business model as broken and call Warren Buffet an idiot? Its an open comment system, but seriously, c'mon man.
    Nov 30, 2014. 10:46 AM | Likes Like |Link to Comment
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