While Reuters reported this as a takeover, its more strictly a merger. And of course, as with all these deals, its just discussions, Takeaway.com has until 24th Aug to announce a firm offer or withdraw (Takeover panel rules).
Investors in Just Eat are likely to be offered 0.9744 Takeaway.com shares for each Just Eat share, implying a value of 731p or c. a 15% premium to the closing price on the previous Friday before the possible deal was announced. As a result, Just Eat shareholders would own just over 52% of the combined group.
The article highlights the apparent role of US activist investor Cat Rock, who is a holder of shares in both companies.
Some analysts have highlighted the lack of overlap between the two companies (the exception being Switzerland) as being a positive feature of the proposed deal.
Takeaway.com argues that online food ordering can be highly profitable – but only for the leading player in each market.
Analysis and comments
The competitive situation for the two companies is very different. Takeaway’s markets have a limited overlap with Uber & Deliveroo, whereas for Just Eat the situation is the exact opposite.
The cross border synergies between operators are limited, unless the target company is very inefficiently run.
This deal highlights some wider lessons for similar platform type markets. Yes, the potential end market is large (& growing rapidly). But, having a large (& fast growing) addressable market is not enough on its own to ensure profitability.
Its important to also look at the local delivery cost structure & the level of competition. On both counts the outlook for Just Eat looks challenging.
This is an aspect of many of the new emerging companies that investors seem to miss – yes the end market looks attractive, but even if there are barriers to entry, multiple players in the market can make it really tough to select a long term winner.
Furthermore, if the infrastructure or product is replicable – companies may sustain extended losses as they fight for market share, especially if your competitor has deep pockets.
Fitbit is trading at all-time new lows after reporting their second quarter earnings earlier this week. Their earnings (really their losses were higher than expected) fell short of expectations and they cut back on their full year revenue guidance. It appears Fitbit a lot of their hope into the Versa Lite smartwatch.
CFO Ron Kisling quantified how badly the Versa Lite underperformed, saying, “What we’re seeing generally across the course of the year in our guidance was Versa Lite over $150 million below what our initial expectations were.”
While the Versa Lite didn’t sell well, the original Versa exceeded expectations, Park said. The company is reevaluating its pricing and promotion strategy for future hardware launches, and it’s accelerating hardware product development.
Fitbit was the pioneer in fitness trackers and was doing well, that until the smartwatches were also able to track fitness activities. But just like Snapchat has to contend with Facebook and just like Blue Apron has to contend with Amazon, Fitbit has to contend with the Apple Watch.
Five months ago, I talked about how the chart was suggestion price was heading lower to the weekly demand at $4.50
Needless to say the stock has now breached the weekly demand zone after earnings.
Unless, Fitbit finds another niche for its products, just like Garmin International moved away from just a GPS screen in your car, the chart suggests Fitbit is headed to $1, with a final stop of getting delisted from Nasdaq.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
Sometimes Trump has perfect timing. The DOW rose nearly 300 points yesterday, only to close down nearly 300 points. Speaking of down, trump’s twit said it’s time to short the Retail Sector.
On the news many of the major retailers, from Kohl’s to Nordstrom to Macy’s fell right after his twit. When Trump said the U.S. would impose 10% tariffs on $300 billion of Chinese goods beginning Sept. 1st, it automatically signaled an additional tax on the Retail Sector. That because the proposed list of goods includes consumer and technology goods, like the iPhone, toys, footwear and clothing.
The SPDR® S&P® Retail ETF, XRT seeks to provide exposure the retail segment of the S&P TMI, which comprises the following sub-industries: Apparel Retail, Automotive Retail, Computer & Electronic Retail, Department Stores, Drug Retail, Food Retailers, General Merchandise Stores, Hypermarkets & Super Centers, Internet & Direct Marketing Retail, and Specialty Stores.
XRT was showing a double top – bearish technical reversal pattern, a up trendline break, and a head and shoulder pattern – market trend is in the process of reversing, in this case bearish trend.
The chart suggest price has further downside. I’m personally looking for price to break the $37.50 level and eventually making its way to the weekly demand at $33.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
On the 22nd July, in the last days of the May government in theUK, a green discussion paper was released on preventative healthcare. The report highlights the long term risk to health budgets if the emerging (& in some cases already emerged) life style risk factors (smoking, obesity, diabetes etc.) are not addressed
The report flags some of the recent successes, including the reduction in smoking (its now down to fewer than 1 in 6 of the adult population)
But, it also highlights some of the risk factors we are yet to find solutions to – of which the biggest is obesity (especially in children)
The report goes on to discuss the increasingly important role that technology will play in helping to solve these problems, obviously not on their own but as part of a wider shift in healthcare priorities
The article also highlights that only 5% of UK NHS spending (which is the bulk of the governments healthcare budget) goes on preventative medicine.
Analysis and Comments
This report and the related article picks up two very important issues in healthcare – that we think will have material impacts for investors.
Much of what we see in the industry around innovation is about better ways of doing the same thing (better heart valves, improved drugs etc). This is in of itself a good thing, but its not enough if innovation is really to make a difference to long term health outcomes
This article also picks up on the second important issue, institutional change. Across Europe much of our healthcare industry is driven by government spending & priorities. In such an environment, switching to preventative healthcare is tough as it does not really contribute to achieving short (or in some cases even medium) term goals.
The article picks out a number of areas where current technology, properly applied, could make a difference to longer term health outcomes. Inaddition, just yesterday, there were reports out can Google predict kidney disease, that suggest AI could be used to help identify those hospital patients that are at a high risk of developing kidney related complications. The current trial at the Royal London Free Hospital, seems to have gone well kidney app a life saver.
These technological advancements to really gain traction need a shift in emphasis among politicians, who set government healthcare priorities. When that happens we could see an explosion in opportunity for European healthcare companies.
An emerging market is a country that doesn’t have all the characters of a developed market. Examples of developed markets would be the US, Australia, England, Canada, etc. Years ago, when it came to emerging markets, it was all about the big four, BRICS – Brazil, Russia, India, and China.
Since then, India, Mexico, South Africa, Thailand and several other countries are now considered emerging markets. Countries wanting to join the club, known as frontier markets include include Egypt, Indonesia, Nigeria, Philippines, Vietnam, among others. As these frontier markets develop, they could perhaps offer investors with handsome returns.
The VanEck Vectors® Vietnam ETF (VNM®) seeks to replicate the performance of the MVIS® Vietnam Index (MVVNMTR®), which includes securities of publicly traded companies that are incorporated in Vietnam or that are incorporated outside of Vietnam but have at least 50% of their revenues/related assets in Vietnam.
“Recently, Vietnam has attracted global investor interest as a potential beneficiary of the ongoing trade war between the U.S. and China, but investors have also taken notice of the country’s attractive long-term fundamental characteristics,” said VanEck in a recent note.
The equity market there is small as highlighted by VNM’s roster of just 27 stocks. However, the nation is growing rapidly and its demographics are more favorable than larger Asian economies such as China and Japan.
“Vietnam is taking gradual steps to liberalize its markets, while seeking to avoid the negative impacts of capital flight,” according to VanEck. “Hot money is a real issue for frontier and emerging market economies, and the negative repercussions, including volatility, may have long lasting effects on the local economy.
Now I see why they call it frontier markets, as these markets are still underdeveloped like the chart below. At some point, VNM will breakout…maybe by this time Vietnam joins the emerging market club.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
Advanced Micro Devices reported their second quarter earnings yesterday, but they couldn’t live up to the expectations. Revenue was down 13% year over year, net income fell over 40% and AMD said that it expects its full-year results won’t be as good as the previous forecast. On the news the stock fell double digits.
I remember writing a post about AMD almost one year ago and I remember that $33 level being a monthly supply zone which eventually push price to the sub $20 level. It’s still so vivid because I remember I was wrong on the call and thought price was going higher.
NOTE: I should of known better, as very few things trump a monthly zone, but at the time, all I saw was AMD’s price continuing to higher after years of hibernation.
The CEO, Lisa Su said the weaker than expected forecast was due to weakness in gaming consoles as both Microsoft Corporation and Sony Corp announced they were coming out with new game consoles. Needless to say the stock fell double digits yesterday. However, I’m not surprised because the way that monthly supply got me almost a year ago, got many traders/investors who went long yesterday or didn’t take some profits off the table.
On the daily chart, price formed a “M” pattern which is a reversal pattern. So the potential price action over the coming days/weeks might be to the downside.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
Three months ago, Ford announced first quarter earning in which net income declined, to $1.1 billion from $1.7 billion. Earnings per share were $0.29 cents per share, down from $0.44, but better than expected. Also, revenue fell to $40.3 billion from $41.9 billion a year earlier, but higher than expected. Beating the expectations were enough to send the stock 10% higher on Friday, it’s best one day performance since 2009.
Last year global car
sales declined for the first time since 2009. Based on first half U.S auto
sales, the U.S. auto sales are on pace to drop for a second year in a row.
Automakers are facing headwinds related to a trade war with China and threats of further tariffs up to 25% that could be implemented in November. The Chinese market also is facing oversaturation with predictions of a 7.5% decrease in sales this year after it began to shrink at the end of 2018.
The U.S. auto industry is heading toward a nearly 30% decrease in sales by 2022, a Bank of America Merrill Lynch analyst predicts.
Yet this article I read on Yahoo Finance stated the 3 reasons to buy Ford under $10 were the following: Ford’s Volume and Market Share Trends Are Improving, Depressed Domestic Revenue Trends Will Turn Around, Profit Trends Are Moving in the Right Direction.
I won’t get into the details of the article because the case to buy Ford in my opinion is weak. All one has to do is look at the chart. The fact that price couldn’t even make it to the first weekly supply at $11.25, but stalled and fell at $10.50 tells you the #1 reason not to buy Ford under $10. The chart suggests price is going to fall to the monthly demand at $5.25.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
The NIFTY 50 is an index that benchmarks India’s stock market index representing the 50 of Indian’s top public companies in 13 sectors. The NIFTY 50 is about to have their worst monthly of the year and the chart suggests there is more downside risks.
The NIFTY 50 just closed below the 200 exponential moving average (EMA – yellow line). The 200 EMA is considered a key indicator by traders for determining the overall long-term trend. 200 EMA also used as major resistance line when price is below the 200 EMA.
Price is on the verge of breaking down and below the long up trendline dating back to 2016. Trend traders will now start to come out from under their rocks and look to short the NIFTY 50 once they receive confirmation.
Although divergence is not an indicator based on a mathematical calculation, I believe it’s one of the most powerful indicators to a trader/investor.When people talk about divergence they are referring to the difference in movement between an oscillating indicator (i.e. MACD, CCI, RSI, Stochastic, etc.) and the price action.
Negative divergence occurs in an uptrend when the price action makes higher highs that are not confirmed by the oscillating indicator. This indicates a weakness in the uptrend as buying is less intense and selling or profit taking is increasing. And when negative divergence happens on monthly chart, watch out.
Thus, one possible set-up is if price can drop a bit more, it would have formed a nice daily supply zone at 11,300. Thus, my projected price action projectile is the following to 10,000, which happens to be a major support line and a psychological round whole number.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
Two weeks ago Domino’s Pizza (DPZ) posted weaker-than-expected sales during the second quarter. Same-store sales grew at 3% vs expectations of 4.6% domestic. Same-store sales internationally grew 2.4%, but also missed analyst expectations for 2.6% growth. On the news the stock price was fell 9%. This marks the second consecutive quarter where Domino’s disappointed Wall Street.
Same store sales decreasing is indirectly part of Domino’s “fortress” strategy. Domino’s is under attack by the food delivery companies in which stay at home diners have a lot more options at their disposal. So Domino’s is aggressively adding store at the sacrifice of existing stores the clear risk of saturating its existing territories. The “fortress” strategy is to control the experience of getting the pizza quickly and hot to the customer. I could understand getting the pizza there quickly and now I completely understand why they won’t to deliver their own pizza.
U.S. Foods, one of the country’s biggest food services companies, conducted a survey of over 1,500 American adults who use food delivery apps and 497 food delivery workers to highlight the emerging industry.
One jarring finding: 28% of deliverers said that they have actually eaten food from the orders they were supposed to deliver.
The biggest complaints among customers? Food that’s not warm and fresh took the top spot, followed by late food and incorrect orders. And in order to ensure freshness and quality, 85% of customers said that they would like the restaurants to provide tamper-evident labels.
Not only do I love Domino’s pizza, but I love how they use technology to stay ahead of the competition. I do anticipate them finding their lane within this growing new field of food delivery longer term. However, short term, the chart suggests, the stock price has room to fall to the weekly demand at $227.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
Faced with public pressure over contributions to plastic pollution, Coca-Cola and PepsiCohave both left the Plastics Industry Association, the former stating it withdrew “as a result of positions the organization was taking that were not fully consistent with our commitments and goals.”
Last year, household products company Clorox, medical device firm Becton Dickinson, and hygiene and cleanings tech company Ecolab ended their memberships, some citing disagreement with the lobbying group’s efforts to prevent plastic bans.
The withdrawals come at a time where the plastic pollution debate is becoming much more heated in state legislatures, with five more states passing laws banning or taxing plastic bags, while several other states are passing laws limiting or preventing such actions by local governments.
Analysts and comments
According to Greenpeace, in 2018, Coca-Cola, PepsiCo and Nestlé were the world’s biggest producers of plastic trash, mostly of polystyrene, which goes into packaging, and PET, which is used in bottles and containers.
The companies have now made various pledges to reduce plastic waste and facilitate recycling, with Coca-Cola, for example, partnering with the Ellen MacArthur Foundation and pledging to make all its packaging recyclable, reusable, or compostable by 2025.
You can find the latest news on Ellen MacArthur’s New Plastics Economy Global Commitment here. At 3m metric tons in 2017, Coca-Cola currently has the highest disclosed plastic packaging volume among the signatories who have made a disclosures (followed by Nestlé and Danone).
Of the 150 companies who have signed up to MacArthur’s global commitment to reduce plastic pollution, the majority still refuses to publicly disclose figureson their own plastic packaging production (including Pepsi Co, H&M, L’Oréal, Walmart and Marks & Spencer).
The Plastics Industry Association, through the American Progressive Bag Alliance (APBA), an arm of the group, has been advocating against plastic bag bans, arguing that conventional plastic has the least environmental impact compared with other bags, requiring 70% less energy and 96% less water to make than paper bags, according to its website.
