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KEY POINTS
OVERALL MARKET
The Consumer Price Index showed higher consumer prices but didn’t exceed inflation expectations.
The market indices ended the day mixed.
The Consumer Price Index by the Bureau of Labor Statistics was released today, and it showed higher consumer prices. Luckily, the core inflation numbers didn’t rise too quickly, falling just short of expectations. For example used car prices have only gone up .2% in July, compared to 10% in June. Perhaps the Fed's insistence on the short-term nature of recent inflation is true, and things are cooling off as the economy deals with short-term shortages and logistic challenges. GET THE DAILY MARKET RECAP
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The ghost of Wendy’s (WEN) kitchens is looking like the future of fast food.
Sometimes ghosts can scare off would-be customers, but sometimes they’re good for business. The ghosts I’m talking about today don’t haunt people. I’m talking about ghost kitchens!
Last year, founder and ex-CEO of Uber (UBER), Travis Kalanick, turned his Uber Eats expertise into a new business venture. He watched food delivery services boom and found a need that he could fill. He named them “ghost kitchens” for restaurants that have no actual restaurant. Kalanick began renting out commercial spaces for restaurants just to fulfill online delivery orders for services such as Grubhub (GRUB) and more. It seems as though his idea has been validated by other companies following suit. In today’s earnings report for The Wendy’s Co. (WEN), the company announced that it would be launching 700 ghost kitchens for food delivery in the next four years. This comes through a partnership with REEF, the largest logistics hubs and kitchens operator in the United States and Canada. Wendy’s stock was up by almost 4% at closing today, after reporting a 20% jump in sales compared to last year’s second quarter. Looking at the company’s Stock Card, it is profitable, with solid free cash flow. It does need to work on its debt, mainly. I like how Wendy's is thinking, and I’m going to keep a close eye on the success of its new experimental kitchens to decide whether or not I should invest. WHAT'S DOWN?
What makes Weight Watchers (WW) a “Mom” stock?
I found WW International (WW) near the top of today’s loser list on Stock Card. You probably recognize this company by its previous name: Weight Watchers, which had Oprah Winfrey on its board and as an investor and promoter. Well, today, the company released its second-quarter earnings report, and the stock quickly plummeted. So what Has Oprah abandoned her investment, and should you? Let’s take a look.
It appears that investors weren’t impressed by the underwhelming outlook for new subscriptions to the company’s weight loss program. The 6% year-over-year growth in subscribers wasn’t quite up to the expectations of WW management. It might be that Weight Watchers is just not quite reaching the young adult population as well as it used to. New companies approach marketing and branding with a more modern angle like its privately-managed competitor Noom. Noom is a startup that maintains a heavy focus on the psychological side of getting fit and healthy. It’s an app that helps you understand why you eat what you eat and then builds a diet and lifestyle around that. It has even attracted corporate investors like Novo Nordisk Holdings (NVO), which became a shareholder in May of this year. That being said, is WW International just outdated? To me, it mostly feels like a weight loss program for moms! I’m just joking, of course, but I couldn’t help it. I looked at the WW Stock Card and noticed that it was a top-25 holding in the Invesco DWA Consumer Staples Mom ETF (PSL) on the left-hand panel on WW's Stock Card. The name gave me a good laugh. In this case, if you are wondering, “Mom” in that ETF's name represents momentum. But, it's indeed a good reference to WW's target customers. I think there are better stocks to invest in rather than WW International. If Oprah Winfrey's name couldn't lead to sustainable rapid growth, the brand is in trouble in my books. NEW STOCK CARD FEATURE
Announcing: Stock Card’s new ETF cards!
Folks, last week, we rolled out a significant new update to Stock Card. We greatly improved our ETF Cards! Earlier today, I uploaded a quick rundown to show you how to research ETFs using the ARK Innovation ETF (ARKK) example.
The Stock Card team and I are super excited to let you guys get your hands on this tool! ETF Cards have been one of the most requested features that you have asked for in the last 12 months, and your wish is our command. For a more in-depth explanation, I'd like to invite you to check out the demo video. WANT TO RECEIVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?Comments are closed.
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