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The Seattle giant jumps into the $500 million market for K-Cups, which could sink smaller rivals.
By Jeff Reeves, editor of InvestorPlace.com
In December, there was big news as coffee giant Starbucks killed its contract with Kraft, scrapping a 12-year distribution deal to retail outlets and prompting speculation that Starbucks would make a bigger push into grocery aisles and even sparking a legal battle.
But now that a judge has ruled that Starbucks (SBUX) indeed is within its right to cancel its relationship with Kraft (KFT) as of March 1, the Seattle coffee behemoth is forging ahead with its new retail plans. Its first major change is a splash into the single-serve-coffee market for machines like the Keurig K-Cup brewing system.
That could mean tens of millions of dollars in new revenue for Starbucks and perhaps spell the end of the line for smaller single-serve companies that have seen big growth in the absence of a major competitor.
It's time to tap the brakes again by swapping out an earlier pick.
Living in Minnesota, I learned many years ago to drive in icy conditions. The first thing you are taught is never to slam on the brakes. If you do, you will slide out of control.
Instead, the best way to stay safe on ice is to tap the brakes gently in order to slow to a gentle stop in complete control. That is the concept I suggest investors use with respect to the current market state.
Last week I hit the brakes a bit with my five ETF buys for the week.
I’ll tap the brakes again by suggesting traders swap out one of last weeks picks in favor of the ProShares Short Russell 2000 (RWM).
JDS Uniphase is the right stock for the right time as people look beyond Qualcomm.
Last week, I took a look at one of my favorite stocks, JDS Uniphase (JDSU), to ponder whether the deal is done and the stock had run. I came back with an unequivocal no, not yet, and backed it up with Ken Shreve's analysis (man, has he been hot).
You can always tell when a stock is under-owned, and that's what JDS Uniphase must be, as it gapped up and then just continued to ramp on top of the gap. I think people have been looking for 4G plays, trying to broaden beyond Qualcomm (QCOM), and have stumbled on JDS Uniphase as a company that you must use to test 4G systems. It looks like the company will be rolling out a new line this week at the big Barcelona telecom equipment conference.
I also think people are recognizing that JDS Uniphase powers a key portion of the Kinect, the cool-as-all-get-out Microsoft (MSFT) game system -- and you don't have to own the boring Microsoft stock to get the benefit. (Microsoft owns and publishes MSN Money.)
A recent investigation prompts layoffs of illegal immigrants, which will surely increase labor costs.
Written by Douglas Estadt
Despite Chipotle Mexican Grill's (CMG) recently reported positive results and its all-too-tasty fajita burrito bowl, we believe shorting CMG will prove to be profitable. The company's steady rise in stock value and its recent earnings report are trumped by its current labor issue and its overrated build-up by momentum players. A recent investigation by Immigration and Customs Enforcement prompted a major layoff of illegal immigrants that will surely increase the company's labor costs. We consider these facts before shorting the stock:
Economists have begun to lower their forecasts for economic growth in India.
The fund manager that made a big bet against Netflix says he was wrong. But he's still not recommending a buy on the stock.
Tilson's arguments hit a nerve, and Netflix's chief executive went online a few days later to defend the stock. Reed Hastings posted a long response on Seeking Alpha telling Tilson: "Cover your short position. Now."
It didn't help Tilson's case that Netflix shares have risen 25% since that argument. So Tilson ended up taking the advice, saying this week that he closed out his position because he was no longer confident that his investment thesis was correct.
You gotta admire the guy for owning up so publicly about this. Here are the three reasons why he abandoned his short strategy:
New models from Hewlett-Packard and other makers will challenge Apple's iPad.
A number of companies are putting finishing touches on new tablets, and some beat what the iPad has to offer. That's why some Apple observers think the company must debut an iPad 2 and perhaps even an iPad 3 this year just to keep up.
All of which is shaping 2011 as the start of a new chapter in personal computing. By year's end, we'll have a number of really good tablets to choose from, and that will trigger changes across the computing sector.
Tablets are lighter and cheaper than traditional computers, but they have fewer abilities and less storage. They can do enough, however, to make us less reliant on laptops and desktops -- categories that could see a drop in sales.
Use these funds to mimic the investments of the world's richest man.
By Don Dion, TheStreet
With a fortune totaling $53.5 billion, Mexico's Carlos Slim topped Forbes' 2010 list of the world's richest people, beating out notable names from around the world including Microsoft (MSFT) founder Bill Gates and Berkshire Hathaway's (BRK.A) chairman Warren Buffett. (Microsoft owns and publishes MSN Money.)
A major percentage of Carlos Slim's staggering fortune can be attributed to his telecommunications business. In particular, the wireless carrier under his command, America Movil (AMX), has seen impressive growth in recent years as rampant economic growth and expansion in the emerging markets have resulted in more consumers entering the mobile phone market.
Although his telecom-focused endeavors represent the bread and butter of his business empire, Slim's reach expands well beyond this sector, allowing him to profit from other market trends. For instance, the precious-metals industry appears to have played a major role in the growth of his wealth as well.
Groupon trivializes decades of China's oppression of Tibet. Walt Disney infiltrates maternity wards. Marketing plan for Verizon's iPhone flops.
By TheStreet Staff, TheStreet
Here is this week's roundup of the dumbest actions on Wall Street.
5. Groupon trips on Tibet ad
A few Google (GOOG) executives watching the Super Bowl might have done an end-zone dance in their living rooms after seeing Groupon's idea of savvy advertising. Watching Groupon waste the world's most expensive advertising opportunity by trivializing decades of Chinese oppression of Tibet probably probably didn't excite any Google executives.
However, realizing you dodged a $6 billion bullet -- the reported price Groupon wanted Google to pay for the online coupon company -- was probably a cause for celebration.
This small steeler packs a big punch in the industry.
Ampco-Pittsburgh isn't exactly a household name, but cold-rolled steel producers know all about it. Foolish analyst Alex Pape says the company has a couple of crucial advantages that should help it forge a higher stock price.
Rex Moore, Motley Fool Top Stocks editor
Forged hardened steel rolls. Strip mill cast rolls. Plate finned heat exchange coils. Don't these phrases just scream huge stock market profits?
As obscure as these may be to most people, they are a big deal in the steel industry, which relies on products like these every day in production facilities all over the world. Many of those steel mills rely on Ampco-Pittsburgh (AP) for these crucial pieces of equipment.
Unfortunately, the duo's alliance to fight the iPhone is dead in the water, as Apple and Android already hold dominant positions in the smart-phone market.
By Jeff Reeves, Editor, InvestorPlace.com
Nokia (NOK) was once the king of cell phones, garnering as much as half the market. But as the devices have gotten smarter, Nokia has found itself left behind. Nowadays, every gain for the iPhone and Android-powered gadgets is one more body blow to the Finnish electronics company, which has slowly and steadily been losing global market share.
The company hopes to change its fate, however, by teaming up with another tech powerhouse left out in the cold when it comes to the mobile market: Microsoft (MSFT). The companies today announced a partnership to create compelling devices with great apps that run on a mobile Windows OS and thus strike back against iPhones and Droids everywhere. (Microsoft owns and publishes MSN Money.)
Will the strategy work? In a phrase, "fat chance."
I criticize executives who blow it, and I applaud those who deliver. Meet 4 of my heroes.
I come to you now in praise of famous companies. These companies and the terrific CEOs behind them are heroes of mine. They are delivering remarkable results in the toughest of economies, and too many people just yawn at best -- and carp far more often -- despite their best efforts.
Let's start with Bob Iger and Disney(DIS). Excuse me for being in awe of a plain-spoken, nonpromotional man who took an undermanaged company with just a good brand and turned it into a veritable powerhouse of consistent strength.
Think about it. In the worst recession since the Great Depression, Disney was able to put up very good numbers for its most economically sensitive theme parks. Now that things are better, the company is just on fire.
Its movie business? So many are franchises: "Pirates," "Toy Story," "Cars" -- these are multiple revenue streams of regular business as strong as brands like Tide or Gillette but with more growth. Needless to say, if you watch ESPN as much as I do -- and many of you do -- you regard it as indispensable and as totally unable to be time-shifted, especially if you are watching the same games as your friends, as is often the case.
The video-rental chain could not get the money it needed to survive bankruptcy, reports say.
The struggling video-rental chain is preparing to put itself up for sale after failing to get the cash needed to emerge from bankruptcy, The Wall Street Journal reported. And even Blockbuster's bondholders -- the ones waiting to get paid back what the company owes them -- seem to be OK with rolling the dice on a sale.
Why? Because even after months in bankruptcy, it sounds like Blockbuster just couldn't put together any good plans -- plans for reorganization, plans for debt reduction and especially a good strategy to compete with rivals.
Netflix (NFLX), Apple (AAPL), Amazon (AMZN) and other video giants are charging full speed ahead. And Blockbuster is simply stuck. It could take years to get out of bankruptcy and rebuild -- and then what would the company have left of value?
Blockbuster needs "to get on with it," one source told the Journal.
The government proposes spending cuts, but getting lawmakers to sign off on them is another story.
Is the social-networking site truly that valuable? Or are we seeing another tech bubble?
So it's no surprise that Twitter is watching its value notch up as well. Facebook, Google and others have held "low-level" acquisition talks with Twitter, and those discussions place the company's value at $8 billion to $10 billion, The Wall Street Journal reports. It was only in December that Twitter was valued at $4 billion.
Twitter allows people to post messages capped at 140 characters. Is the service truly worth $10 billion? At any rate, for all the big numbers being tossed about, the acquisition talks have gone nowhere, sources tell the Journal.
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[BRIEFING.COM] The stock market ended the midweek session on a mixed note. Blue chip listings bolstered the Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%), while the Russell 2000 (-0.4%) and Nasdaq Composite (-0.02%) underperformed.
Equity indices began the day in the red, but wasted no time regaining their flat lines. Small-cap stocks were not as fortunate as the Russell 2000 spent the day in the red.
Upon returning into positive territory, the key indices were ... More
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