Chipotle Improving Its Digital Menu to Support Its E-commerce Growth Runway
March 10, 2021
Image Shown: Over the past year, shares of Chipotle Mexican Grill Inc have been on an upward tear, supported by the restaurant’s improving omni-channel selling capabilities. By Callum Turcan Shares of Chipotle Mexican Grill Inc (CMG) surged higher during normal trading hours March 9 after the firm announced it was adding customizable quesadilla offerings to its digital menu in the US and Canada starting March 11. This offering is only available for customers ordering while using Chipotle’s digital platforms (potentially due to the longer preparation times) and will likely require new cooking equipment at the company’s restaurants. The company offers both home delivery and curbside/drive-thru pickup services (including its order ahead and pickup services) through its digital platform. We continue
Johnson & Johnson’s COVID-19 Vaccine Gets the Green Light
March 10, 2021
Image Shown: We include Johnson & Johnson as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. The health care giant is home to over two dozen ‘platforms/products’ that generate $1.0+ billion in annual sales, as you can see in the above graphic. Recently, Johnson & Johnson’s COVID-19 vaccine received emergency use authorization from the US CDC, which will provide public health authorities with another arrow in their quiver as it relates to bringing an end to the public health crisis. Image Source: Johnson & Johnson – Fourth Quarter of 2020 IR Earnings Presentation By Callum Turcan At the end of February 2021, the US Centers for Disease Control and Prevention (‘CDC’) gave emergency use authorization
French Conglomerate Bolloré Is Intriguing
March 3, 2021
Image Source: Bolloré SE – 2019 Business Report We are intrigued by the extensive reach of Bolloré and the very diversified nature of its asset base. The French conglomerate’s ability to generate meaningful free cash flows during the initial stages of the COVID-19 pandemic highlights the resilience of its business model and cash flow profile. However, we caution that the Bolloré family will continue to exert an outsized level of influence on the trajectory of the conglomerate going forward. Nonetheless, this is one for the radar. By Callum Turcan The French conglomerate Bolloré SE (BOIVF) is a behemoth. It operates in ~130 countries across the world, has ~84,000 employees, and is controlled by the Bolloré family. Cyrille Bolloré is chairman
Aon and Willis Towers Watson to Join Forces
March 2, 2021
Image Source: Aon Plc – Willis Towers Watson Plc Merger IR Presentation March 2020 Executive Summary: Two global professional services firms, Aon and Willis Towers Watson, are in the process of merging through an all-stock deal. Should the transaction proceed as envisioned, the pro forma company should be able to unlock material synergies within a few years after the deal closes. We would want to see how the combined company performs first before updating our opinion on the pro forma entity, though we view the merger quite favorably given the expected free cash flow uplift. By Callum Turcan Aon Plc (AON) is in the process of merging with Willis Towers Watson Plc (WLTW) through an all-stock transaction announced back in
Members Only: The March Edition of the Dividend Growth Newsletter Is Now Available
March 1, 2021
Please select the image below to download the March edition of the newsletter or select here (pdf).
Earnings Roundup: BYND, DASH, DPZ, NVDA
February 28, 2021
Image Shown: Shares of DoorDash Inc tumbled after the food delivery service reported its latest earnings report near the end of February 2021. In alphabetical order by ticker: BYND, DASH, DPZ, NVDA By Callum Turcan In this article, we’ve highlighted four companies that just reported their latest results. Domestic and international economic activities continued to face major headwinds from the coronavirus (‘COVID-19’) pandemic near the end of last year and into the beginning of this year, though corporates are now starting to plan for a world when “pre-pandemic” activities (such as going to eat indoors at a restaurant) can resume in earnest. Global health authorities are working to put an end to the public health crisis via ongoing COVID-19 vaccine
The Invisible Hand Will Sink These Markets
February 26, 2021
Image: Nan Fry By Brian Nelson, CFA Adam Smith’s “Invisible Hand” is often thought to be a blessing by the capitalists of the world. The free-market economy will find the right answer, they may say. Self-interest and greed will inevitably push humankind to new horizons and achieve levels of greatness no person before thought possible. What fools we are to believe. Irrational behavior around shares of GameStop (GME) continued Friday, February 26, with the company trading in a huge range of $86.00-$142.90 on the session. We re-released our 16-page report on the stock and peg a fair value estimate of just $4 per share, with the high end of the fair value estimate range of $7. A Bank of America
Public Storage’s Traditional Free Cash Flow Coverage of the Dividend Is Unique for a REIT
February 25, 2021
Image Source: Mike Mozart By Brian Nelson, CFA Public Storage (PSA) reported better-than-expected fourth-quarter 2020 results February 24. For the period ending December 31, 2020, net income came in at $1.67 per common share, down from last year’s level but mainly because of a non-operating negative impact related to forex on Euro denominated debt ($35.1 million). On an operating basis, Public Storage’s self-storage net operating income advanced $16.5 million year-over-year in the quarter, which was only modestly offset by higher general and administrative expenses ($12.3 million). Underlying business performance at Public Storage remains very healthy, in our view. Core funds from operations (FFO) per share came in at $2.93 in the quarter, up 3.2% in the year-ago period (above the
Realty Income’s Dividend Track Record Unfazed by Its Weakened Theater Exposure
February 25, 2021
Image Source: Realty Income By Brian Nelson, CFA On Monday, February 22, Realty Income (O) reported solid fourth quarter results that beat expectations. For the quarter ending December 31, 2020, net income per share came in at $0.33, adjusted funds from operations per share was $0.84, and the REIT collected 93.6% of contractual rent, a decent percentage given that the troubled theater industry comprises ~5.6% of its annualized contractual rent. Regal Cinemas and AMC Entertainment (AMC) are top-10 customers. Though Realty Income continues to face headwinds from its non-investment grade client tenant portfolio, the REIT continues to invest for the future, with over $1 billion allocated to properties and properties under development or expansion in the period. As with many
