Hey Snackers,
Lavender Jasmine, Cedar Balsam and... 100% Fresh Beef? McDonald's just introduced a line of burger-scented candles. Choose from aromas like Pickles, Cheese, and eau de Ketchup to make your whole house smell like a Happy Meal.
The Dow slid last week while the Nasdaq suffered its worst day in a month. And growing coronavirus concerns are expected to keep investors nervous again this week.
This is a smog-free zone... Upstate New York's Plug Power wants to be the "leader in powering electric motors" — but it's 23-years-old and definitely isn't that. It's taking a different approach than Tesla to clean electric motors: The Hydrogen Fuel Cell. Now it's getting major attention from investors in its 24th year.
But you've still never heard of Plug Power... Until this year. In January, the company announced a major order from one Fortune 100 company — the single order will generate nearly as much revenue ($172M) as Plug Power made in the entire past year ($191M). It also announced a new engine it's working on specially for delivery trucks. But its stock has risen over 150% in 5 months and 27% just last week... despite 2 decades of consistent unprofitability.
We have to talk about "cult stocks"... 3 stocks this year have enjoyed gigantic stock price jumps that can't really be explained by fundamentals or company news. Tesla and Virgin Galactic both hit the upper stratosphere of Wall Street recently, and elements of their inexplicable rise can be seen in Plug Power (although valued at under $2B, Plug Power is much smaller). We noticed a cult stock formula:
Put your back Intuit.... The creator of TurboTax and QuickBooks is adding to its clique of popular financial products, just in time for tax season. Intuit is close to striking a deal to buy privately held Credit Karma for $7B — its largest acquisition ever. In 2009, Intuit acquired budget tracker Mint for $170M. Now Intuit's splurging more because it wants to be aggressively involved in your daily finances (not just your yearly tax frenzy).
Tastes better when you DIY... Domino's global sales jumped 8%, sending shares up 30% last week. It's one of the only big chains that refuses to partner with delivery apps like Gruhub and DoorDash. For years, it's taken a DIY approach to delivery, investing big in its own app — now it's expanding GPS-pizza tracking for hangry orderers. FYI, takeout now makes up nearly half of Domino's orders — and it's more profitable than delivery (because delivery costs extra time & money).
Don't hate the player... hate the benchmark. Shares of Warren Buffett's legendary holding company Berkshire Hathaway rose 11% in 2019 — not bad, right? Until you compare that with the S&P 500, which jumped 31.5% last year. That means that if you'd invested in an S&P 500-tracking ETF for all of 2019, you would've made a 31.5% return (that's almost triple the return of Buffett's baby). But Warren reminded us as always in his annual letter to shareholders (which came out Saturday) that Berkshire has performed twice as well as the S&P 500 historically since 1965.
Secret goes private... Victoria's Secret was sold off by struggling parent L Brands. And get this: the lingerie chain is only worth $1.1B as a private company. Vicky hasn't adapted well to an era of inclusivity and bralettes — slowing sales and bad PR dropped L Brands' value by 75% over 5 years. With the sale of VS (and its PINK brand), all L has left is a healthy-ish Bath & Body Works brand. Scented shower gel may help clean the financial woes.
Disclosure: Authors of this Snacks own stock of Beyond Meat and fractional shares of Berkshire Hathaway (Class A)
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