I Told You So
Sometimes the former sharp-tongued market pundit yearns to leave my body but ultimately stays put -- but now he can no longer be contained. Here's what the Jolt newsletter said to you Tuesday morning: "What the market is not prepared for is a new, more-plain spoken Fed chair in Powell. Whereas Alan Greenspan, Ben Bernanke and Yellen talked in another language (aka Fedspeak) so as to not freak out markets, Powell is more plain-spoken and direct. I am not sure investors understand that and how it could impact stocks negatively during a rate-hiking cycle." Markets tanked on Tuesday, and still looked under pressure on Wednesday, as investors realized Powell is not a Yellen clone. Powell is direct, and is keen on breaking down monetary policy so the average investor/person at home could understand it. This analysis wasn't pulled out of thin air -- it comes from chatting with people in the know. And to think, this newsletter is free! Next prediction: The market starts to get worried about the lack of market/investing experts on Powell's team ahead of a 2019 filled with: (1) rising inflation; (2) ballooning deficits; and (3) even higher interest rates than in 2018. Time to sell the recent rally in the markets. Mental note: Stocks tanked on Powell's first official day in office, then tanked on his first presentation to Congress. Not setting a good precedent ...
Papa John's Should Just Sell Itself
With deal activity in the restaurant space being hot the last year, acquisitive names such as JAB Holdings, Restaurant Brands International (QSR) and Inspire Brands may want to sniff around Papa John's (PZZA) . Shares of the 34-year-old pizza delivery company, known for its "better ingredients" promise and generous mobile rewards program, have cratered some 30% over the past year amid slowing sales. The company's fourth-quarter earnings release that dropped Tuesday evening stunk. At least the company has decided to part ways with the NFL. Full analysis here as to why Papa John's should sell. After crunching some numbers, Papa John's could be worth $2.6 billion, or $73 a share, in a deal (30% premium). Well off the stock's $90 all-time high in December 2016, but hey, competition has increased markedly since then and Papa John's has hurt its image in recent months.
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If I am an executive at Home Depot (HD) or Best Buy (BBY) , I would be terrified that the ruthless Amazon (AMZN) will be the owner of Ring. While many are looking at the $1 billion acquisition by Action Alerts Plus holding Amazon as a data play, I think folks must also realize the other angle here. Amazon is gaining an inside look into two retailers, Home Depot and Best Buy, who managed to fend off its advances the last five years. Ring doorbells are sold at each retailer. Ring's people talk to those at each retailer to get a certain amount of digital doorbells into stores and presented nicely online. Now Amazon gets access to the inner workings of each retail success story. Ugh. Still hard not to like Home Depot's stock though -- the company is an execution machine.
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