Podcast Summary
Effective Communication Skills and Smart Business Moves: The Think Fast, Talk Smart podcast offers expert insights and practical tips for improving communication skills. General Mills' $8 billion acquisition of Blue Buffalo, a growing pet food company, demonstrates effective business strategy in the recession-proof pet industry.
Effective communication skills are essential in business and life, and the Think Fast, Talk Smart podcast, with its expert guests and practical tips, can help listeners hone these skills. In the business world, General Mills' acquisition of Blue Buffalo for $8 billion is a smart move, as Blue Buffalo's strong growth in the pet food market, particularly in the "better for you" niche, makes it an attractive acquisition. The pet industry's recession-proof nature and General Mills' past successes in the food industry increase the likelihood of a successful acquisition. Overall, the importance of communication skills and the strategic nature of the General Mills acquisition are key takeaways from the discussion.
Companies Adapting to Changing Industries: General Mills acquires Blue Buffalo to diversify and Walmart invests in ecommerce, MercadoLibre grows but suspends dividend for long-term investments
Both General Mills and Walmart are facing challenges in their respective industries, with General Mills dealing with declining sales of cereal and Walmart experiencing slower growth in ecommerce. General Mills announced a large acquisition of Blue Buffalo, a pet food company, to diversify its offerings and offset declining sales in cereal. Walmart, on the other hand, is investing heavily in ecommerce, including free shipping, which has led to a drop in gross margins. MercadoLibre, a Latin American ecommerce giant, also reported strong growth but saw selling pressures due to the suspension of its annual dividend, as the company shifts focus towards long-term investments in expanding its platform. Overall, these companies are making strategic moves to adapt to changing consumer habits and market conditions.
Wayfair's Focus on Expansion and Larger-than-Expected Losses: Despite larger-than-expected losses, Wayfair's top line growth and repeat customer percentage continue to increase, indicating a commitment to the business amidst competition from industry giants. However, volatility and uncertainty remain.
Wayfair, an online home furnishings company, is focusing on expansion instead of paying dividends due to its large market opportunity. However, the company reported larger losses than expected in the fourth quarter, leading to a significant stock sell-off. Despite the losses, Wayfair's top line growth and repeat customer percentage continue to grow, and the company's co-founders' long-term incentives suggest a commitment to the business. The entry of competitors like Amazon, Walmart, and Target into the online furniture space validates Wayfair's business model but also presents a challenge. The stock has been volatile, and the company is not profitable yet. While some see this as a buying opportunity, it's recommended to maintain a small position due to the uncertainty and competition.
Texas Roadhouse and Domino's Pizza report impressive earnings and sales growth: Despite impressive earnings and sales growth, Texas Roadhouse and Domino's Pizza faced stock declines due to high investor expectations. Boston Beer Company faced disappointing Q4 results, but new CEO Dave Burwick aims to navigate the competitive landscape.
Both Texas Roadhouse and Domino's Pizza reported impressive earnings and sales growth, with Texas Roadhouse experiencing a 4.5% increase in same store sales and 37% earnings growth, while Domino's Pizza claimed the title of the world's largest pizza chain based on global retail sales for 2017. However, expectations were high for both companies, leading to flat or even slight drops in their stocks after the reports. Domino's, trading at 40 times earnings, took a breather due to the high bar set by previous growth. Boston Beer Company, on the other hand, faced disappointing Q4 results, particularly with their core brand, Sam Adams, and will require patience from investors as new CEO Dave Burwick navigates the competitive landscape. Despite the challenges, both companies remain in strong positions to continue growing. The holiday quarter is crucial for retailers, including beverage companies, to perform well, and the summer months should also be a good period for beer sales.
Impact of Unexpected Events on Companies' Performance: Unexpected events and trends can significantly impact a company's performance. Boston Beer's summer ale and Stamps.com's ecommerce growth illustrate positive impacts, while Kylie Jenner's tweet about Snapchat demonstrates the negative consequences of social media influence.
The performance of certain companies can be significantly impacted by unexpected events or trends, as seen with Boston Beer's summer ale and Stamps.com's ecommerce growth, as well as Kylie Jenner's tweet about Snapchat. Boston Beer looks to the summer ale as a key indicator of the company's success, while Stamps.com benefits from the shift to ecommerce. Meanwhile, Snapchat's stock took a hit after Kylie Jenner expressed her disappointment with the app's latest update and deleted it from her phone, causing a loss of over $1.5 billion in market value. Companies must remain customer-centric and adapt to changing trends to stay competitive. The power of social media, even from a single influential figure, can have a significant impact on a company's stock price.
Wells Fargo faces new sanctions and Chipotle gets a new CEO: Regulatory actions and board refreshes are crucial for companies dealing with governance issues. New CEOs can signal commitment to shareholders by forgoing salary and receiving stock options.
Regulatory action and board refreshes are necessary for companies, like Wells Fargo, that continue to struggle with governance issues. Nell Minow, a corporate governance expert, expressed her delight when the Federal Reserve imposed new sanctions on Wells Fargo, including the requirement to add new board members. Minow believes that more stringent actions, such as debarring board members, should be taken by regulatory bodies when necessary. Regarding Chipotle, Minow is hopeful about the new CEO, but wishes the old CEO had stepped down entirely. In her opinion, the single best move for a new CEO regarding compensation would be to forgo a salary and receive only stock options, signaling a strong commitment to shareholder interests.
Rewarding CEOs based on market outperformance and diversity in entertainment industry: CEOs should be rewarded based on exceeding market performance with indexed stock options or grants, while the entertainment industry embraces diversity with successful movies like Black Panther and talented directors like Ryan Coogler.
CEOs should be rewarded based on outperforming the market with indexed stock options or grants, rather than receiving excessive pay just based on market trends. In the entertainment industry, Disney and Netflix are seen as competitors, with Disney's streaming plans including an ESPN service for $5 a month. The success of Black Panther, which has earned nearly half a billion dollars at the worldwide box office, shows that international audiences are open to movies with diverse casts and that this trend will open up opportunities for talented people of color. Ryan Coogler, the director of Black Panther, is an exceptional talent who is poised for a long and successful career. Overall, these discussions highlight the importance of setting high standards and opening up opportunities for underrepresented groups.
African American culture and Academy Awards: Gary Oldman is favored to win Best Actor, Frances McDormand is expected to win Best Actress, 'Abacus' and 'Three Billboards' are contenders for Best Documentary and Best Picture respectively, Meryl Streep's role in 'The Post' is underrated, unconventional films like 'The Shape of Water' and 'Three Billboards' are in the race for Best Picture.
African American culture is deeply rooted in Africa and was a significant theme in the discussed movie. In the world of the Academy Awards, the documentary "Abacus: Small Enough to Jail" is a strong contender for Best Documentary, although "Faces Places" is currently leading. Gary Oldman is expected to win Best Actor for his role as Winston Churchill in "Darkest Hour," and Frances McDormand is favored to win Best Actress for her performance in "Three Billboards Outside Ebbing, Missouri." Meryl Streep's role in "The Post" is still underrated, according to the speaker, despite her impressive 21 Academy Award nominations. The race for Best Picture is between "The Shape of Water" and "Three Billboards Outside Ebbing, Missouri," which are unconventional choices for the award due to their unique themes and smaller production budgets.
Oscars: Surprises and Overlooked Films: Potential upsets in Oscars include Laurie Metcalf challenging Allison Janney and 'This Is Me' from 'The Greatest Showman' overtaking 'Coco'. An overlooked film is 'Dave Made a Maze'. For investors, consider MyTech Systems (MITK), a small company with a big opportunity in mobile deposit technology and identity verification solutions.
While predictions for the Academy Awards suggest few surprises, there are still potential upsets, such as Laurie Metcalf challenging Allison Janney for Best Supporting Actress or "This Is Me" from "The Greatest Showman" overtaking "Coco" for Best Original Song. Another overlooked film from 2017 that deserves attention is "Dave Made a Maze," a low-budget, incredibly creative movie about a man who creates a maze in his apartment that gets out of control. For investors, MyTech Systems (MITK) is a small company with a big opportunity, having developed over 90% of the mobile deposit technology market and expanding into identity verification solutions. Despite its size and strong balance sheet, it remains under the radar and is worth a closer look.
Opportunities in shrinking check market: The check market is shrinking but mobile check deposits and identity verification through companies like Square and Intel present significant growth opportunities. Square's nimble business model and effective data use, and Intel's data-centric business and economies of scale make them worth watching.
While the check market is expected to shrink, there is a significant opportunity for growth in mobile check deposits. Additionally, identity verification and data utilization through companies like Square and Intel present long-term market opportunities. Square, specifically, is worth watching due to its nimble business model and effective use of data. Intel, with its growing data-centric business, now represents over half of its revenue and is a strong contender despite increasing competition. Despite being fierce competitors, Intel and AMD are unlikely to merge due to Intel's economies of scale. These companies, Square and Intel, are innovating in their respective fields and are worth keeping an eye on.
