Posts by Aaron Task

  • Beef: It's what dads really want for Father's Day

    Aaron Task at Yahoo Finance 3 days ago

    Summer is just around the corner and along with it, Father's Day, which happens to fall on the solstice this year. Those looking for that "perfect" gift for dear old dad should think about what he really wants: Food. Specifically, steaks. In a recent survey, 80% of dads say they would like steaks for Father's Day and 57% of them will be grilling on that "special" day. And yet, only 9% are likely to receive the gift of red meat, according to Todd Simon, senior vice president of Omaha Steaks, a family-owned company that his great-great grandfather founded in 1917. Father's Day is "our Second Christmas," Simon says and the company has launched an ad campaign this year aimed right at the hearts and stomachs of dads everywhere. You can catch some clips of the campaign in the accompanying video (or find the full thing here) and hear Simon's take on more serious issues, including: Sustainability: "We are extremely selective about where we buy our beef and have our own inspection process," Simon says. According to Omaha Steaks PR, less than five tenths of 1% of the 10 billion pounds of beef produced in America meet the company's standards. "Sustainability is important and we're looking to see that our suppliers are moving in that direction," he says, lauding Walmart's recent announcement it is asking suppliers to raise animals in more humane conditions. "We're a customer just like Walmart: We like to push for change and like it when other companies do as well," Simon says. Staying relevant: Omaha Steaks is one of the pioneers of the home food delivery business, which is now ubiquitous. One way the company has remained relevant is "by offering a wide variety of things so you can really get anything you want from Omaha Steaks," he says. While steaks are still the bulk of the business, the company also offers burgers, bacon, seafood, side dishes including fresh vegetables, as well as pies, chocolates and other desserts. Independence: The food industry is rapidly consolidating with Hormel Foods' acquisition of Applegate Farms this week just the latest in a series of deals. Simon expects Omaha Steaks to remain private and in the family's control for the foreseeable future. "Being a privately held business has been good for us," he says. "We've been able to fund growth internally and have been able to access the debt market when we've need capital." Asked about the key to the firm's long-term success, Simon cites the advice of Omaha's most famous native, Warren Buffett: 'Stick to your knitting'.

  • GameStop gives the people what they want (shareholders too)

    Aaron Task at Yahoo Finance 3 days ago

    A lot of retailers were hit in the first quarter by a strong dollar, bad weather and the West Coast port strike -- or at least cited those factors as reasons for disappointing results. Then there are retailers like GameStop, whose shares were up 7% in recent trading after the video game retailer reported better-than-expected sales and earnings Thursday afternoon. "We had a great first quarter," CFO Rob Lloyd declares in the accompanying video. "We had the same international currency challenges that a lot of companies did and it impacted our sales and revenues but...we were able to exceed our guidance for the quarter." Indeed, GameStop's resultsbeat expectations on both the top and bottom lines with earnings of 68 cents per share and revenue of $2.06 billion, the latter up 8.1% on a constant currency basis. Same-store sales rose 8.6% in the quarter and the company upped its full-year earnings guidance to $3.63-$3.83 from $3.60-$3.80. Lloyd says the key to GameStop's Q1 success was something that seems self-evident but is often easier said than done in retail: Delivering what customers want. "As long as publishers introduce great content that drives consumers into our stores, I think we'll be alright," he says. In the first quarter, there was strong demand for titles such as NetherRealm Studios' Mortal Kombat X, Electronic Arts' Battlefield Hardline, Take-Two's Evolve and Warner Brothers Interactive's Dying Light. "Customers were lining up to get them," Lloyd said, further noting strong early demand for The Witcher 3: Wild Hunt, which was just released by Polish video game developer CD Projekt RED on May 19. "We're pleased with what we've seen on Witcher 3...we've got to make sure we've got enough product to meet demand," he says, and is optimistic about the forthcoming release of Batman: Arkham Knight, the final installment of Rocksteady Studios' Arkham Trilogy. GameStop is benefiting from the sales of the latest generation gaming consoles and in the first quarter crossed an inflection point where sales of new games for the Xbox One and PlayStation 4 exceed those of the prior versions, Lloyd said. "We're not at that point yet on preowned" games, one reason such sales slipped 3.4% in the quarter. Beyond the newest titles and consoles, gamers also increasingly want digital downloads, which skeptics (and short sellers) believe pose a major threat to GameStop's brick and mortar business. But GameStop's digital sales rose 23% in the first quarter and is on pace to hit $1 billion this year, Lloyd says. "Most [of those sales] takes place in stores, which keeps us relevant from customers' perspective." GameStop is also adding collectibles and merchandise like T-shirts and figurines to its stores which provides another incentive for customers to come to the stores. "In addition, because digital is growing, because the video game business is cyclical, we're finding ways to diversify our business overall," he says. A big part of that diversification is the company's technology brands segment, which includes Simply Mac -- 71 stores selling a full line of Apple products, Spring Mobile for AT&T post-paid services and products, and Cricket Wireless stores, an AT&T partnership for pre-paid wireless phones. GameStop plans to open 200 new tech brand stores in the next three months, and is converting several old Radio Shack outlets as part of its AT&T partnership, from which Lloyd expects continued growth.

  • Bird flu egg-splained: The impact goes far beyond your breakfast table

    Aaron Task at Yahoo Finance 5 days ago

    The egg. It's incredible. It's edible...and it's getting more expensive. Because of a bird flu outbreak, wholesale prices for eggs have risen to over $2.00 a dozen, up a whopping 71% since late April. Retail prices haven't risen nearly as fast -- up 17% in the past month according to The Guardian...but grocers can only hold off passing on the price increase to consumers for so long. The avian flu has forced American farmers in 16 states to kill 40 million birds so far, the vast majority of them egg-laying hens. More than 10% of the entire U.S. egg supply has already been affected by the outbreak, according to The Washington Post, with Iowa farms particularly hard hit. The impact of this bird flu outbreak goes far beyond your breakfast table. The price of liquid, dried and frozen eggs used by food manufacturers has risen nearly 30% in the past month. And a potential shortage of these so-called breaker eggs is forcing corporations like McDonald's, Unilever, Panera and General Mills to scramble to find alternative suppliers and substitute ingredients.   If the bird flu does lead to shortages, expect to pay more for all kinds of egg-rich products like mayonnaise, baked goods and ice cream in the weeks and months ahead. And this Thanksgiving could be more expensive too. Hormel Foods says its Jennie O Turkeys might be in short supply because of the avian flu outbreak, which has forced farmers to euthanize over 3.3 million turkeysin Minnesota, which produces nearly 20% of America's turkey flock. "The U.S. market -- suppliers [and] buyers -- are most certainly very nervous about the evolution of this unprecedented problem," says Andrew Rosenzweig, international sales manager at OvoMarket Espana, an egg exporting company that represents Spanish egg farms. "Given that the influenza has also affected breeding farms...the production forecast is disconcerting.  A hen does not start laying eggs until it’s [about] 20 weeks old, but the big question is how long will it take for the USA to replace the layers that have been lost?" Just how 'unprecedented' is this problem?  The Egg Industry Center, which closely follows the egg market, says "a large fluctuation such as the loss of millions of laying hens was never considered in the design of the [pricing] model that is currently in use." A 100-year flood, in other words. The U.S. only exports about 5% of the eggs produced here, The NYT reports, but the American bird flu epidemic is already having global implications. European egg processors are "in full production to take up the U.S.’s global slack," Rosenzweig says, noting his firm has received inquiries about eggs from Mexico and asked whether OvoMarket can serve clients in Hong Kong.     The good news is the current avian flu outbreak has been contained to just birds so far...but there's still a public health risk, even if it doesn't spread to humans: Eggs are also used to make vaccines for diseases such as measles, mumps and rubella. Eggs are also used to make vaccines for diseases like influenza...meaning this coming flu season could be one for the birds.

  • Tax fraud and identity theft: How to protect yourself

    Aaron Task at Yahoo Finance 5 days ago

    Update: The IRS said Tuesday that cybercriminals obtained prior-year tax returns for over 100,000 U.S. households using information stolen from other sources, including Social Security numbers. An additional 100,000 attempts to access prior-year returns were blocked, the agency said. The IRS sent nearly $50 million in fraudulent refunds before detecting the scam, the NYT reports. In 2013, the agency paid $5.8 billion in falsely claimed refunds.  The article below provides a guide for steps individuals can take to try and protect themselves from the risks of ID theft and tax fraud.

    "While this probably won’t be very comforting for you, the rest of the missing documents were likely too damaged to garner identifiable information to be returned," a USPS spokeswoman told me via email.  " For what it’s worth, it’s not very common and our employees go above and beyond to get mail like this home when it does happen."

  • China stock surge so just might keep going

    Aaron Task at Yahoo Finance 6 days ago

    The U.S. stock market has been in a fairly tight trading range this year and pretty much has gone sideways, with Tuesday's slide bringing the S&P back to within 2% of break-even for 2015. It's been a very different story in China, where stocks have been on a tremendous winning streak. The Shanghai Composite is up 175% in the past year while the small-cap Shenzen Composite is up 140% and has more than doubled year-to-date as of Tuesday's close. The Chinese market entered Wednesday's session on a torrid six-day winning streak, which notably occurred as the U.S. market suffered through one of the quietest weeks in recent memory, punctuated by Tuesday's post-holiday sell-off. After peaking in 2007, Chinese stocks struggled for several years, lagging the S&P 500 and other major Asian markets from 2010-2013. With China's economic growth slowing into single-digit territory, many prognosticators declared the China boom over. But those expecting a "hard landing" in China have been left waiting. Those short stocks have been steamrolled by a rally that began in earnest in mid-2014 when state-run media outlets published a series of articles and television specials that encouraged individuals to invest in stocks.

  • Europe's Altice adds international spice to U.S. cable industry

    Aaron Task at Yahoo Finance 12 days ago

    The Comcast-Time Warner Cable merger may be dead but cable M&A is alive and well -- and now featuring some international flair. Cable stocks jumped Wednesday in an otherwise lackluster tape after Luxembourg-based Altice (ATC.AS) announced plans to acquire a controlling stake in Suddenlink Communications from its private equity owners for $9.1 billion. The deal is relatively small and with 1.5 million subscribers, St. Louis-based Suddenlink is only the seventh-largest cable operator in the U.S. But the Suddenlink deal is widely viewed as a beachhead for Altice and founder Patrick Drahi's plans to tap the American cable industry. The Moroccan-born, French-bred Drahi is viewed as the John Malone of Europe, having built an empire largely via debt-financed acquisitions. In just the past year, Altice spent $35 billion on France's SFR and Portugal Telecom, according to Breaking Views. The company also has cable and telecom operations in Belgium, Switzerland, Israel and the Dominican Republic. The allusions to Malone are no accident as Drahi once worked for the American cable billionaire. After the Suddenlink deal, about 12% of Altice's portfolio would be based in America and "the goal is to be fifty-fifty," Altice CEO Dexter Goei said on a conference call with analysts Wednesday. "This is a very attractive market for us that'll be consolidating for many years to come." Goei noted Europe is about two times ahead of the U.S. in terms of broadband penetration, viewing that as an opportunity for the industry moving forward. "The churn numbers across U.S. cable are significant" relative to European counterparts, he said. "That, in our mind, has a lot to do with processes and customer care on the way to approach the retention of subscribers who tend to disconnect and reconnect, which is a very expensive proposition for an operator. And we think we can operate that and do a lot better."   Getting to 50-50 would require Altice buying much bigger fish than Suddenlink and, sure enough, various news outlets report the firm is interested in acquiring Time Warner Cable (TWC). If true, that could put Drahi on a collision course with his former mentor. Malone's Liberty Broadband (LBRDA) is the biggest shareholder of Charter Communications (CHTR) and the two firms tried to acquire Time Warner Cable last year. Meanwhile, Charter is moving ahead with plans to acquire Bright House Networks, the nation's sixth-largest cable company. Just to keep things really interesting (or is it confusing?) Malone's other company, Liberty Global (LBTYA) is rumored to be in merger talks with Britain's Vodafone (VOD). "If you listen to the conference call today, it's pretty clear [Altice] didn't want to stop with this first acquisition; they want to buy more," said Walt Piecyk, a tech and telecom analyst at BTIG. "They've executed quite well in Europe -- buying companies and finding synergies. They've been doing this in Europe for a while...and the U.S. market offers robust monthly payments." Amid all this dealmaking and deal-rumoring, Time Warner Cable shares rose 5% Wednesday while Cablevision (CVC), another potential target, soared 18%. 

  • SF Fed President sees no tech bubble, takes jab at Wall Street

    Aaron Task at Yahoo Finance 12 days ago

    Kids say the darndest things...and so do central bankers. In a recent sit-down with Yahoo Finance's editorial team, San Francisco Fed President John Williams was asked about the risks of a bubble in the tech sector generally, and the Bay Area specifically. After saying he wasn't particularly concerned about a bubble in the SF Fed's district, Williams added: "On the West Coast we invent things without leverage, and on the East Coast you create [mostly] leverage." The implication, of course, is that while Wall Street titans are busy inventing derivatives and other such speculative financial tools that depend on leverage, California’s innovators are creating useful, tangible things that serve consumers and corporations – without the need for massive amounts of debt.

    Williams didn't quite go that far but he also didn't back away from the comment in a follow-up conversation.

    Williams demurred when I asked if Volcker's perspective represented the prevailing outlook at the Fed, saying, "I can only speak for myself."

    'Masters of the Universe' No More

  • The father of behavioral economics explains why you can't predict the market

    Aaron Task at Yahoo Finance 13 days ago

    When Richard Thaler and Werner De Bondt published a 1985 study in the Journal of Finance called "Does the Market Overreact?," it was borderline heresy to suggest the markets weren't completely rational and efficient. Anyone who's paid even passing attention the past 20-odd years knows financial markets are prone to bouts of what Alan Greenspan called "irrational exuberance" and it's pessimistic counterpart. And, yet, "there are still people clinging to the belief markets are perfectly rational all the time despite what we've seen the last 20 years," Thaler tells me in the accompanying video. Ironically, the idea that supposedly learned people would believe something despite mountains of contrary evidence is something behavioral economics, the field Thaler and De Bondt helped birth, would at least try to factor into the analysis.   Thaler's last book, Misbehaving, is an attempt to explain the origins of behavioral economics and "to explain some of the things we learned along the way." Among those lessons are two the University of Chicago Booth School professor says are particularly relevant to investors:

  • Four forces transforming the world: 'A speed and scale we've never seen before'

    Aaron Task at Yahoo Finance 18 days ago

    The global economy is undergoing such a major transformation it takes not one...not two...but three directors of the McKinsey Global Institute to write a book about it. But seriously folks... No Ordinary Disruption: The Four Global Forces Breaking All the Trends is that book.  One of its co-authors, Richard Dobbs, joins me in the accompanying video to explain why he beleves these forces will have 3,000 times the impact of the Industrial Revolution. "We've built up an intuition about how the world works over our lives... we're now getting these disruptions happening at speed and scale we've never seen before," Dobbs says. "And they're all happening at same time. Such that our intuition about how the world works...a lot of that intuition could be wrong." The four 'global forces' detailed in the book are: Emerging markets growth and urbanization: McKinsey predicts that emerging markets will grow 75% faster than the rest of the world in the next decade. Between now and 2025, just 440 emerging market cities -- such as China's Tianjin, India's Surat and Brazil's Porto Alegre -- will generate nearly 50% of additional global GDP growth, the authors estimate. Technological breakthroughs and disruption: One example of the rapid pace of technological adoption; it took radio 38 years to get to 50 million users vs. just nine months for Twitter. McKinsey predicts 140 million service sector workers could be replaced by computers by 2025 and 75 million (more) jobs will done by robots. Realignment of global trading: 'Interconnectivity' isn't just about mobile communications and social networks. The global trading system is expanding far beyond the traditional post-War hubs of Europe and Asia, with China's plans to build a 'New Silk Road' through Central Asia to Europe being one obvious example. McKinsey predicts Central Asia will be the world's center of economic activity by 2025, "just north of where it was in the year 1 A.D." Aging global population: It's not just Russia, Japan and Western Europe...China's population is aging too and McKinsey predicts the global workforce will shrink two-thirds by 2030. By 2050, the book projects developed countries will have twice as many elderly people as children, a mirror image of the trend in 1950. These trends have major potential implications "for policymakers, investors, families, for how long you have to work, your children's education," Dobbs says.   The bad news is most businesses, policymakers and individuals "know it's happening but [are] not reallocating resources or efforts nearly enough given the scale" of the transformation, he continues. Furthermore, many workers are ill-trained for the coming shifts and the U.S., particularly, faces a shortage of grads in the fields of science, technology, engineering, and mathematics, aka STEM.

  • Dems cave on TPP after "holding out for more sugar in the coffee"

    Aaron Task at Yahoo Finance 19 days ago

    President Obama's effort to pass the Trans-Pacific Partnership (TPP) hit a temporary roadblock earlier this week as Senate Democrats blocked debate on Trade Promotion Authority (TPA), which the President says he needs to finalize the massive trade deal between the U.S. and 11 other nations. But what many in the press called a "stinging rebuke" for the President indeed turned out to be a mere "procedural snafu", as the White House dubbed it.

    Late Wednesday, Senate Democrats agreed to a compromise under which a seperate vote will be held on a bill designed to discourage alleged currency manipulation.

    Rick Helfenbein, chairman of the board of the American Apparel and Footwear Association, says Democrats like Sen. Chuck Schumer (D-NY) were "holding out for more sugar in the coffee" but predicts TPP and TPA "absolutely will pass" in the end.

    "Senator Schumer has been fighting for currency manipulation [legislation] for a long time - he wants to see it passed,"  Helfenbein says. "But do you really need it for TPP countries? Is New Zealand or Australia manipulating their currency? It's absurd."