Penn Wealth Publishing

2019.01.13 Penn Wealth Report Vol 7 Issue 01

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18 penn wealth Report volume 7 issue 01 13 Jan 2019 Penn Wealth Report Copyright 2019. All Rights Reserved. investment intelligence weekly Business Report Blue apron Just Became a penny stock When I was a relative "kid" in the 1980s, I had a subscription to a weekly newspa- per called e Penny Stock News. It listed all of the publicly-traded stocks with share prices below $10. One issue I recall high- lighted a company called e Puerto Rican Cement Company, which had just risen some 5,000% in price, moving from some- thing like a dime up to five bucks or so per share. Home meal kit provider Blue Apron (APRN $1-$1-$5) should be so lucky (to be trading at $5). ey would, however, now qualify to be an entry in e Penny Stock News, as their share price fell to $0.87 on Tuesday. It was a slow-moving train wreck from the start. With so much competition, what were the owners thinking? ey could have stayed private and eked out a nice living for themselves, outside of the spotlight of the investing public. ere was just too much competition in the space, with no real unique value proposition (UVP) for any one of these companies. We said back in September of 2017 that the company's only hope was to find a deep-pocketed buyer, such as Walmart (WMT) or another grocery chain. Well, Walmart has started their own meal kit business, Albertson's has purchased Blue Apron competitor Plated, and Kroger (KR) acquired Home Chef, so it is not looking good for the new penny stock—not that they have shown any real interest in being acquired anyway. It's easy for founders to be blinded by the perceived value of a company they started, but there is no excuse for investors not to consider a company's unique value (or selling) proposi- tion. If the products or services can't justifiably stand out from the competition in any mean- ingful way, what would be the catalyst for purchasing shares? A question that investors who got in on the IPO of Blue Apron are probably asking themselves right now. christmas shopping rose a healthy 5.1%, But another metric is even more impressive $850 billion. at is the amount Americans spent during the 2018 holiday shopping season. at figure represents a 5.1% increase over last year—and the stron- gest number in six years, according to Mastercard SpendingPulse. But there is an even more impressive number in the report: online sales rose nearly 20% from last year. is means that retailers who have embraced this new online reality should continue to excel, while those who have put forth a halfhearted effort into building their online presence will continue to struggle. Besides the obvious winners such as Amazon (AMZN), which retailers have done the best with this strategic shift? Walmart (WMT) and Target (TGT) have both put a massive effort into their respec- tive online shopping experience. e worst? Sears (SHLD), Kmart (SHLD), and Marshalls (TJX). With the beaten-down market, there are a lot of great opportunities in retail, but beware of the shops who have not "figured it out" yet; the future of the retailing experience, that is. We expect big winners to include: Amazon, Walmart, Target, Best Buy (BBY), and Macy's (M)—though that last example could end up going either way. Of course, all of that online ordering requires a shipper to deliver it to your door. Here, we like FedEx (FDX), hands down. It happens to be on sale right now as well! hack gives li'l kim inFormation on nearly 1,000 deFectors in south korea When dealing with a mentally unstable, mercurial dictator who happens to be the leader of a socialist state, there really is only one strategic plan: containment and con- stant pressure at all levels. ere can never be a lasting deal with a madman. We don't doubt that, for a brief tract of time, Kim Jong-un liked Donald Trump, and was willing to make a deal with the West, but that time is over. He will need to feign over- tures to end the economic containment of his country, but he will never give up his war-fighting capabilities or end his elec- tronic warfare against the civilized world. With respect to the latter, the South Korean Unification Ministry announced that a malware hack has allowed the release of the names, birth dates, and addresses of 997 North Koreans who had previously defected to the South. e Ministry, whose raison d'être is to support a "one Korea" solution, apologized for the lapse and has notified the defec- tors. at should comfort them (considering the fact that Kim's half-brother was killed in Kuala Lumpur). Investors need to understand this point: there will be times at which it appears all is relatively calm on the Korean peninsula, but that is a mirage. South Korea has a vibrant Weekly Business Report e-commerce happiness index east/southeast asia

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