Just wow, big tech.
Hope you got over General Electric's (GE) comforting dividend check, sold the waning stock and bought some big tech names months ago. If not, sucks for you because this space is showing no indications of slowing down. So get ready to pay up to own a still very impressive sector-wide high-growth story. That's the basic takeaway any TV talking head will spew today. And they would be correct in doing so.
Big tech names such as Amazon (AMZN) , Microsoft (MSFT) , Alphabet (GOOGL) and Intel (INTC) continue to tell several key stories to anyone who wants to listen. First, these companies are morphing into service revenue generating beasts. You want to pay higher multiples to own these names because of their predictable, high margin revenue streams. Thank you to Corporate America for wanting to make server rooms obsolete by pushing into the cloud. Meanwhile, big tech continues to work on the types of projects that captivate the minds of growth investors. Intel and newly acquired autonomous driving tech company Mobileye is a sexy story. Alphabet and Waymo - oh, so hot. Microsoft and LinkedIn -- a deal that many on Wall Street still aren't appreciating. And finally, despite all the investments in the next generation, big tech remains mindful of costs as to maximize the bottom line. That's really, really hot. Have a lovely weekend, and get ready for the big Facebook (FB) earnings beat next week.
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How Mattel Could Save Itself From Death
No dancing around the obvious: Mattel's (MAT) stock will get absolutely blown to pieces Friday after an ugly series of news. I have a dose of advice to Margo Georgiadis, the former Google-exec-turned-Mattel-CEO, in an effort to save the Barbie maker. Hop in a plane this weekend, land in Seattle and meet up with Amazon CEO Jeff Bezos. Strike a deal before the calendar turns to 2018 because if not the stock will continue to circle the toilet bowl drain.
By joining forces with Amazon, Mattel could dramatically lower its cost base. It's a needed move seeing as revenue is under pressure as key retailers like Toys 'R' Us close stores and kids transition to tech toys. A sale to Amazon would also infuse Mattel with the tech-minded talent that is needed to compete in the new generation of play.
Either way, hat tip to Mattel rival Hasbro (HAS) , which continues to kill it. Take a look back at my interview with Hasbro CEO Brian Goldner from earlier this year to understand why the company is winning, and while Mattel is getting its rear-end handed to it.
J.C. Penney Gets Smashed