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jpmarketer 59 posts  |  Last Activity: 19 hours ago Member since: Jan 16, 2008
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  • Reply to

    GMCR Business Model Broken

    by cisum1 Nov 24, 2015 12:01 PM
    jpmarketer jpmarketer 19 hours ago Flag

    I respectfully disagree. Coke has ubiquitous distribution through each of it's local bottlers.They are not going to pay a premium on a 13-15 multiple on a company that's shrinking and financially engineering (solely) to stabilize it's stock price at a level 1/4 what it was. This lately is the biggest pump exercise I have seen in years -- with the possible exception of the Twitter hype a few months back before it plummeted.

  • Reply to

    GMCR Business Model Broken

    by cisum1 Nov 24, 2015 12:01 PM
    jpmarketer jpmarketer 20 hours ago Flag

    The problem is commoditization of the Category.

    I have in front of me Bed, Bath & Beyond's Black Friday circular. There is Sophia Vergara, full cover, with the Ninja. Brewer sales are declining - big time - because of structural issues pertaining to the DRM.

    But at the same time, the Category is being besieged by new entrants, and the aggressiveness of the marketing is extraordinary. Just look at the media weights and spending behind Ninja. And there as soooo many others.

    And not for anything -- look at the decrease in Marketing spending our friends at GMCR have implemented (drastic) in order to be able to make the recent numbers and outlook. This is short term heroin, that's all, and the long term impact on the brand will be devastating if they keep the marketing spend depressed.

    Leave it to the Street and Cramer and Baron's to pump this. Cramer is calling the financial engineering "good execution," finally, he says.

    I got news for you Jim. The fundamentals of this business are very broken and under severe pressure. Market share is plummeting and that's what's driving the revenue and earnings declines. Sure, management did what they had to do -- decreased expenses, decreased the share count, upped the dividend - because they have to to continue to attract financing.

    But don't let this short term stance fool you. It's a stop gap measure until they can figure out strategically how to get out of this hole.

    There will be a lot of noise, and blips both ways, but the trend must be down because the GMCR is doing OK, but nowhere near the valuation and earnings multiple (given the declines that are still in place to this day).

  • jpmarketer jpmarketer Nov 16, 2015 4:58 PM Flag

    On what basis did you take your position? Why?

  • Reply to

    Easy Come, Easy Go

    by jpmarketer Nov 16, 2015 9:50 AM
    jpmarketer jpmarketer Nov 16, 2015 10:03 AM Flag

    I'm gonna go out on a limb and say

    3.25 forward earnings (even with the buyback) against a 10X multiple (generous if growth has really slowed as much as it seems and KOLD is dead).

    That's a price per share of 32.50 and options are calling for a 16% move.

    I can't see any upside scenario unless the licensing revenue has exploded (or will explode) - don't know too much about that piece.

    Is any of this wrong? I have no position, just looking at this thing for what it is. No emotion, no past with it, am I wrong here?

  • jpmarketer by jpmarketer Nov 16, 2015 9:50 AM Flag

    Shorted CMCR week before last and did OK. Then reversed the short and went long. Didn't do so well. Looked into things a bit over the weekend.

    The problem, it seems to me, is that K-cup sales growth this quarter has been pegged at about 13%. If you make a rough corollary to revenue, up 13% this quarter, that will only have the company up 3% for the year. This, when the multiple of 16X earnings has been driven by much higher growth rates. So the multiple drops big time. As earnings drop as well, possibly to the .71 that's forecast. OK, but the multiple contraction brings the PPS order of magnitude lower. That's number one.

    Number 2 is KOLD. It's an inimitable disaster - Company-changing. All of the infrastructure that was planned and committed to - I don't know if ground was broken, but this whole thing is going to need to be written off. The double whammy is -- in the face of slowing HOT growth, the KOLD entry is kaputsky and so much of the Company's future growth was based upon entry into the on-premise Segment of the CSD Category.

    So they restructure -- cost savings -- $300 million and share buyback (about 6% reduction of the float). But it's not enough. Order of magnitude, it's not enough for this smaller, now stagnant business that is dying the death of a thousand cuts from commoditization of its IP, just laid big sunk costs into hardware and a Category entry that is going to flop and have to be written off.

    Other than that, everything is great.

    Don't mind me. Just kicking myself for reversing that short before I really, really looked at this Company. I wish longs well, but you are in trouble here my friends. If I've got any of my facts wrong, above -- or I'm painting a picture that is skewed or inaccurate, I'm always open for a good trade. No position now, but there is going to be a 10-20% move tomorrow, the options people say -- and I believe it's South.

  • Reply to

    Now Have Gone Long - Reversed Short and Here's Why

    by jpmarketer Nov 11, 2015 11:53 AM
    jpmarketer jpmarketer Nov 11, 2015 12:00 PM Flag

    2 other wildcards are launch and write-off costs for KOLD. But you can't tell me that some reasonable estimate hasn't been built into the financials (and PPS) for months now.

    I've never seen in my life (and I've seen/undertaken a lot of product and hardware launches) - a launch that was so universally panned even before launch day. No way the costs here come as a surprise, which I think in and of itself, is a (positive) surprise. It was built in.

    I think we see 50 before earnings, not an exodus on fear, but speculation that this rush for the exits - today in particular, was led by lemmings.

  • Same as the previous short trade (which I took off too early, as always) -- this trade will be short term. I think the drop is overdone because:

    1. The buyback continues and will rear its head again at the Company's discretion, possibly before earnings to stabilize perception

    2. Even the most conservative estimates and a reasonable multiple (15X) have the base case at about $50 per share. And that' forward P/E, so I don't see any bottom falling out here

    3. The Company's Hot product line extensions have been pretty good. I had a chance to dig in, went to Amazon, their site, saw the range. Coffee consumption is strong and growing, the Hot business is still growing at 25% plus. The wildcard remains knockoffs -- commoditization of the Category, which I've been clear is the #1 threat here. I don't come down off that, but GMCR's legitimate product differentiation is striking, especially at a time of year when the relevance of/consumer connection to these specialty products is high.

    4. It's the Holidays. I haven't been around this stock long enough to deeply understand the seasonality, but in terms of actual sales volume, investor awareness and consumer perception, I would think the stock is moving into a strong time seasonally.

    5. I don't think KOLD will be successful and no one else does either. The value proposition is misplaced, and the Category itself (CSD's) is in decline. Coke won't buy Green Mountain to enter the home on-premise production market (at least on the foundation of today's GMCR technology), but Coke still may have interest in Green Mountain for it's HOT portfolio and distribution opportunities. Remember, CSD's are in decline, and diversification remains critical for both Coke and Pepsi. There must be a tad of this built into the PPS to be reasonable, imo.

    My call is -- the risk, plus all of the above, surface at earnings, with 50+ a reasonable short term resting place. We'll see.

  • Haven't been around in a while, but saw the drop upon earnings, then the follow-through and today's swoon. Small position, but wonder if there wont' be a bounce this week. Regards to anyone who's still around from a few years ago. Will look into what's going on, read recent reports as I get the chance this week. Oh, how the might have fallen....

  • Reply to

    Where in the World is Lori Tauber Marcus

    by jpmarketer Oct 13, 2015 4:04 AM
    jpmarketer jpmarketer Nov 7, 2015 9:05 PM Flag

    "commoditization of the industry, erosion of profits and the huge multiple driven by the growth projections, which are no more."

    which piece of that is unclear --

  • Reply to

    Where in the World is Lori Tauber Marcus

    by jpmarketer Oct 13, 2015 4:04 AM
    jpmarketer jpmarketer Nov 4, 2015 3:41 PM Flag

    No, she wasn't a temp working for the launch. She was a member of the Leadership Team, one of a handful. She was brought in specifically to put together the product lineup for Kold. She did strike the deal with her old friends at Dr. Pepper, but then she was gone, without a trace.

    She did have cancer several years back (was featured on a Pepsi can as a breast cancer survivor). So prayers for the individual that no disease has returned, that this has nothing to do with her mysterious removal. But you are probably right that she had something to do with it, and if she didn't, to be fired on the eve of the launch like this -- either way it's no good. I think it's a given that Kold is a flop, which puts this company in a heap of strategic trouble in terms of the commoditization of the industry, erosion of profits and the huge multiple driven by the growth projections, which are no more. Anyone who doesn't see this before earnings is going to have a huge surprise, and it won't be fun.

  • Reply to

    Coke's Breakmate - 1988 - Valuable Lessons Learned

    by jpmarketer Oct 13, 2015 12:22 PM
    jpmarketer jpmarketer Nov 4, 2015 7:55 AM Flag

    So how are the reviews? Any mention of economics (not to mention it's coming out the product doesn't taste original)?

    So not only is one paying through the nose, one is paying through the nose for inferior product.

    So extraordinarily high price, questionable product and operating benefits. This is a poster person (want to be PC!) for a strategic failure.

    I have that short on again because there is no way - unless the street is dreaming - that concern won't build before earnings that today's multiple cannot be sustained by the eroding Hot business, and KOLD didn't go anywhere, in fact, it's a flop.

    Yes, it's a flop. Oh, surprise.

  • Inclined to short again here. Core business is under tremendous pressure and the Kold Launch won't help, it will detract.

    The concern is that numbers are going to start to filter through before earnings -- if there isn't a pre-earnings warning -- that take on Kold is nil/writeoff -- and the core business is being eroded/commoditized at an increasing rate. It's awareness of this that will hit suddenly and 50 won't be support anymore.

    That's how I see things shaping up -- high probability anyway. Recognize it could go the other way -- but I think Holiday excitement this year works against the Brand, not for it. Time will tell.

  • jpmarketer jpmarketer Oct 31, 2015 8:55 PM Flag

    You don't have me on ignore. You are obsessed with me, apparently.

    Listen, you were just wrong about everything and you lost face. Like I said, it happens, it's a message board, get over it.

    You stood on that soap box for months and screamed that margins were declining, China was going to hll in a hand basket, and the probability of the synergies - and resulting cost savings being achieved - was next to nil. For you to now retract or reinvent these positions is the height of dishonesty, period.

    Anyway, the outcome of the most recent earnings report was that margins are going gangbusters (with FY net operating profit forecast to be at the top of the 8-11% range, an IMPROVED outlook), China is going gangbusters (which you downplay as being cyclical) - to the point where it more than offset the EXPECTED North American decline, and the synergy-driven savings (and regulatory approvals) are WAY ahead of schedule. The special dividend reflects the confidence generated by these developments.

    These are facts, plain and simple facts.

    It's really necessary to also get into the risks, setbacks, etc - with vigor. I agree.

    But that's not what you do. You present an entirely unbalanced view - completely negatively skewed. Each of your posts can be scored on negative, neutral and positive messaging. The results are overwhelming. You are an aggressive basher, plain and simple. To present yourself and your alter aliases as anything else is ludicrous.

    And also, no one cares about your ancient exploits in the online boiler rooms of the 80's and 90's. That is just very telling. You seem to have a need to tell, and to get all emotionally distraught over anyone presenting a balanced view.

    Ignore that.

  • Reply to

    Little napkin calculation

    by dockter_evil Oct 29, 2015 1:13 PM
    jpmarketer jpmarketer Oct 31, 2015 5:20 PM Flag

    My response had nothing to do with the form. It had to do with paying more in foreign dividend taxes.

    Most do consider it in poor taste (and often, emotionally/socially needy) to disclose one's position in terms of dollars or share count, as you have. Best of luck to you and your automobiles.

  • jpmarketer jpmarketer Oct 31, 2015 11:35 AM Flag

    Don't bother asking. "osmosisjosh" is here, at least now, to bash. The reams of data that are cut and pasted -- sprinkled with relentless negative messaging, is one component of the strategy.

    The other is to insult/abuse any poster who challenges, and to promote unbridled pessimism, creating a "groupthink" dynamic where common opinion migrates toward the "norm,"- the "norm" being defined here as the messaging put forth by the one who (shrilly, emotionally in this case), claims leadership of the group through of volume of data, frequency of posting, etc. - and then aggressively enforces the position by attempting to intimidate other posters with sharp elbows and phony aliases. the "Zutkol" alias plays that role of late.

    Regardless of this poster's motives (professional/paid message board basher, older/retired broker, trader, etc.) - the objectives of this poster are crystal clear.

    So you can ask her or him whatever you want, but the outcome will always be an answer which denigrates Nokia, or attempts to cast positive information in a neutral or negative light.

    China, like any other geographic, product, service or other Segment, is a mix of threats and opportunities. The Wall Street Journal says China is going better than expected for Nokia. Osmosis Josh on the Yahoo Message Board tells you to ignore that, think for yourself (adopt his positions), or you're a stupid "muppet," I think was the term.

    For my part, I closed a very large deal this week in my core business, and the Nokia portion of my investment portfolio took a nice leg up, for great reasons. May some day, I will choose to turn my sights on exploring the intricacies of Nokia's business. It's an issue of opportunity cost for me, and most other long-time retail investors.

    Now, onward with your craft, Osmosisjosh. No one can claim you're not prolific, at least. But since I'm on ignore, you will never see this, I guess.

  • jpmarketer jpmarketer Oct 29, 2015 2:17 PM Flag

    Please, take your angst to the Wall Street Journal, have your last word with them. It is their staff who has published this morning the three success drivers -- China, margins and achievement of the synergies -- all of which you have taken the other side on now for months. You can name call and flail your arms all you want. You were simply wrong -- consistently, and have now been exposed. Your reaction is very telling. Try to stay calm.

  • jpmarketer jpmarketer Oct 29, 2015 2:10 PM Flag

    You seem to highly personalize this. And your anger is palpable. The simple fact remains that your calls on margins, China and the realization of the synergies were wrong. All of it. Own up to it and lose the bluster. You have slammed this stock with biased representation of facts for several months and have now been taken to the carpet. Get over it.

  • Reply to

    Little napkin calculation

    by dockter_evil Oct 29, 2015 1:13 PM
    jpmarketer jpmarketer Oct 29, 2015 1:16 PM Flag

    I guess now that foreign dividend tax issue is going to become much more relevant. Kind a great development and scks at the same time.

  • jpmarketer jpmarketer Oct 29, 2015 1:14 PM Flag

    Wall Street Journal Today quoted three reasons for the upside -- Among them, the China business is growing. You say it is evaporating.

    They said margins are up. You said they would decline.

    They said the synergies will be realized a year early. You said the last 20% will be a knife-fight (or something like that) and that the synergies will never be realized.

    You cut and past voluminous information that is tangentially related to the topic -- then sprinkle negative bias all over it and serve it up. Same fare every day. But you were WRONG about everything and the facts are the facts.

    of course, you will lsay that because I am not stating the facts as my own -- as you do, often plagiarized -- that my facts are not relevant. Well, before it was Goldman conviction buy, and today it's the Wall Street Journal. I do believe you would agree that these are more credible sources for commentary/opinion than Osmosisjosh on the Yahoo message board.

  • jpmarketer jpmarketer Oct 29, 2015 1:01 PM Flag

    Not really, just laughing at you.

245.66-1.26(-0.51%)Nov 25 4:01 PMEST