Hate to be the party pooper, but there are more exciting things happening in the land of investing than the Fed removing the word "patient" from its policy statement.
Don't get me wrong, the persistence of super-dovishness from Fed Chair Janet Yellen was very welcomed. It allows me to continue to forget about tried-and-true investing disciplines and recommend whatever company looks hot at the moment. More growth stocks, less boring dividend payers, baby!
Obviously, I say this tongue in cheek -- but honestly, the Fed is sowing the seeds of another asset bubble. The problem is, who knows when that bubble will pop? I believe Yellen said Wednesday her Fed will not be one that proactively seeks to tamp down perceived bubbles, a bit of a differing in approach to what Ben Bernanke tried to test (see "taper tantrum").
Nevertheless, I want to drive home to you that there is more going on out there than the Fed meeting. Please stop reading all of these Fed headlines, you are just not learning anything new. Furthermore, what you do learn is likely to prove fleeting, as Fed officials prepare to make their post-meeting speaking rounds. What is not fleeting, you ask? The fundamental things companies are doing to grow sales and earnings in a still-sluggish global economic backdrop.
Here is insight into what you should be continuing to search for ahead of the start of earnings season, based on my ongoing discussion with companies.
Starbucks (SBUX) is setting the bar quite high in the retail industry with its mobile order and payment function. Its new delivery service is kind of sick, in a good way. I suspect the company will reinvent packaging in the fast-food industry, in large part to support its delivery ambitions globally.
But Starbucks isn't the only service company working on tech things to bolster its sales and earnings. I met with Chipotle (CMG) last night, who told me they are preparing to issue an update to their mobile app. Don't expect Apple Pay support, but do expect some features that could boost line speed during peak hours and help order customization.
On the other hand, I believe Domino's Pizza (DPZ) is nearing an Apple Watch app launch. Papa John's (PZZA) is likely to have a smartwatch app soon, along with Apple Pay. Whole Foods (WFM) continues to move closer to building supermarkets of the future. Over the next three years, I believe the grocer will introduce a host of new shopping technologies to its stores, all of which will enhance the guest experience and its bottom line.
A great way to check in on whether a company you own is doing things on tech is to simply search Apple's (AAPL) App Store. For example, if you own Chipotle shares, did you know its app has been updated on iOS 12 times since February 2009? Of course not? Why didn't you know? The latest update added the ability to order from the kids' menu. That means the generation of sales that weren't possible before.
The buildout of social media teams at major companies continues. Finally, platforms like Twitter (TWTR), Instagram and Snapchat are being taken seriously. Foot Locker (FL) has told me they are seeking to market on Snapchat soon. I think that will involve short videos with athletes rocking their new kicks from Foot Locker. The footwear retailer has been leading on digital -- it has an active Instagram account and encourages teen picture uploads of their sneakers. The efforts are likely spurring digital sales, which now represent about 12% of total revenue.
I think you should be searching around to analyze customer interaction on social media. The platforms are playing a larger role on sales and profits. Starbucks got blasted on social for its push to discuss race relations and, as a result, I think risks losing a sale or two short-term. Chipotle and Whole Foods are the benchmarks for social media -- each account has an authentic feel, actually talking to people instead of at them. People love that stuff (including me, who received two tweets from Chipotle Twitter last night).
BTW, I think Chipotle's addition of former Starbucks and Best Buy (BBY) tech pioneer Stephen Gillett to the board last week was a stroke of genius. He was most recently the COO of Symantec (SYMC), and will bring considerable tech knowledge and passion for tech to the Chipotle team.
Multinational companies, many getting crushed by the strong dollar and thinning core profit margins, are likely to announce further portfolio size reductions within the next 12 months. This is especially probable given asset values where they are in the public markets, and record-low rates pushing private equity to do deals for things they believe can be turned around in five years.
A great example is General Mills (GIS). The company told me Wednesday it's open to divestures, and may have more to say in July when it shares its latest business plan. I think you could see the company sell its Green Giant frozen-food business, which is slow growth. Proceeds could lead to an acquisition of an organic food maker to boost its growing portfolio in the category, which was given a jolt in September with the $840 million purchase of Annie's (BNNY).
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