Friday, October 31, 2014

MasterCard (MA) hits another earnings home run and makes strategic investments {Earnings Commentary}

Happy Halloween & Happy day for MA shareholders!

The 'future' of MasterCard, picture courtesy of TechCrunch

MasterCard(MA) announced third quarter earnings for year 2014 bright and early yesterday. I am not not sure whether the two leaders in payment processing technology have agreed to report earnings right after another but this was in fact the case. Less than 24 hours after Visa earnings were announced along came MasterCard with another home run in earnings announcement.

Original Investment Thesis

If you follow the blog you know that I just recently purchased shares of MasterCard and have owned shares for less than a year. Check out the article here where I talk about why I decided to start a position. The stock is up over 11% overall in about 4 months. After earnings yesterday, the stock was up over 7% in just one day.

Highlights of the Earnings Call

  • Net income for third quarter 2014 reported to be $1 billion, an increase of 15% in comparison to same quarter last year.
  • Net revenue for the quarter came in at $2.5 billion, up 13% in comparison to same quarter last year.
  • Worldwide purchase volume increased 11% year over year to $843 billion
  • Operating income increased 14% year over year, resulting in an operating margin of 56.7%
  • CEO Ajay Banga also announced that operating expenses increased 12% to $1.1 billion in comparison to same quarter last year mainly a result of strategic investments and acquisitions. So far, the strategic investments have contributed to the 9% increase in growth for the company. Company also reported "other expenses" of $2 million (in comparison to "other income" of 6 million year over year).

My Two Cents

Felt this picture would be helpful in illustrating the future prospects for card transactions...

Two facts that caught my eye the most from this earning calls were: 1. The company's emphasis on making strategic investments for continuous growth and development. 2. The increase in operating margin to 56.7%-- in simpler terms, this means that MasterCard is now getting about $0.57 per dollar of sales. That percentage is pretty significant and is actually up from the 54.8%  previously announced for 12-month ending June 30, 2014. I have a lot of confidence in the payment processing leaders. Just the first picture above {courtesy of techcrunch on the future of MA) and reading about its strategic investments comes to show how the company refuses to stay behind and are making strides to remain relevant and at the forefront of the industry. 

I have to admit that I wasnt noticing much movement for several months since I purchased shares.I wondered why the stock price was showing so much resistance (stalling around the ~$73 range or so). I would look up any 'relevant news' that would explain it, and nothing significant would come up. The price even came down to less than my original purchase price several times. Nonetheless, I'm glad that my instincts were right in knowing that sooner or later the stock market and stock price would catch up and reflect my strong believe in this company. The stock is trading at nearly $85 as of the publishing of this post. Patience is one of the most important aspects of long term investing and I have a long way to go with this one. As mentioned, I've only been a part-owner of MasterCard for about 4 months. Excited to see where this takes me.

....I also get $0.44 per share every 3 months (yield of 0.60%). Perhaps not as higher yield in comparison to Visa but I have to admit I like the way the company is using the money towards strategic R&D and continuous growth. Call me the Dividend Diva. 

Tell me, how many cards with the MA logo do you own? What are your thoughts on MasterCard as a company?

Thank you for reading.

Cheers to Profits,

Disclosure: currently a shareholder of both, MA & V.

Thursday, October 30, 2014

Why Visa (V) is one of my Portfolio Champions {Earnings Commentary}

Hello World!

Visa (V) announced earnings yesterday afternoon and to say they've had a great quarter (and year) may be an understatement. Last night's report was in regards to Visa's last quarter and full year 2014 results. Before I get in to the highlights I'd like to share a little background as I have been doing with my previous commentaries.

Original Investment Thesis

I purchased shares of Visa for the first time a couple of years ago and is up over 60%. If you can find me a reliable investment that would give me 30% return per year please let me know. If I could do things differently with this stock I would have purchased a whole lot more shares than I did. I currently only have a small position. However, the assurance that I picked a true winner, nonetheless, its what makes me excited about the stock market. 

I purchased Visa for  very similar reasons why I buy most of the companies in my portfolio- strong brand, strong positioning within the industry, long term prospects, and profitability. In Visa's special case I also purchased because, as we all know, this is a company with only one "major" competitor and that is Mastercard (MA). Sure, American Express and Discovery are still out there but no one is close to competition with Visa as MA. Hence, in my eyes they only have one major competitor. I am confident that the business model of payment processing companies is extremely clever and is very hard for competitors to enter this specific space. You can read more about the business model in this post I wrote about master card not too long ago. 

I remember clearly one morning in 2012 as I was getting ready for work I was listening to news radio and they announced Visa's results pre-market. At the time, they had once again reported strong profits for the quarter. I took a "leap of faith" and bought shares pre-market as I had to get to work (I normally dont do this but with a company as solid as Visa, I felt confident it was okay to do so). And the rest is history!

Highlights of Earnings

  • Adjusted net income for this last quarter was $1.4 billion, up 14% in comparison to same quarter last year. Adjuster net income for full year 2014 was $5.7 billion, up 15% in comparison to full year 2013 results.
  • GAAP Net operating revenue for this past quarter alone was $3.2 billion, an increase of 9% in comparison to same quarter last year. GAAP net operating revenue for the full year 2014 was $12.7 billion, a nominal increase of 8% in comparison to full year 2013 results.
  • Earnings per share increase was 17% in comparison to same quarter last year while full year earnings per share increase was 19% in comparison to full year 2013. Visa's CEO attributed this stellar EPS growth to Visa's "enviable competitive position, strong business model, and great talent".
  • There appears to be an increase in usage when it comes to Visa card holders as total payment transactions processed by VisaNet were confirmed to have increased by 9%, to 16.9 billion transactions, in comparison to same quarter last year. 
  • Service revenues increased by 8% to $1.5 billion in comparison to fourth quarter 2013 and 14% full year increase to $1.3 billion in comparison to full year 2013.
  • Company has also put money aside for litigation purposes for a total of $450 million, pre-tax. This shows me this company is thinking ahead. Whether this amount is enough or not may be up for discussion but something tells me this amount was strategically agreed upon.

My Two Cents

I plan to continue being a shareholder of Visa for many years to come. I am confident that, as a leader in the payment processing industry they have what it takes to maintain their competitive advantage. Although "up and coming" competition may be fierce; Visa understands this and makes solid investments in their research and development not only to retain their position within the industry but go above and beyond. As CEO Charles Scharf noted in the press release: "Our investments in Visa Checkout, Visa Token Services, and Visa Digital Solutions are just beginning to have an impact in the marketplace. We will continue to invest in these and other areas and remain confident in our ability to capture the growing opportunity in payments."

In my opinion, companies like Visa will be benefiting strongly from new developments such as Apple-Pay and others that I am sure will follow suit. Credit cards provide convenience, even if you aren't necessarily holding the plastic and the information is simply stored in your smart phone; payment processing services will still be involved one way or another. I am looking forward to witnessing how this company continues to evolve, develop, and adapt to new technology and a "changing world" as time goes by. 

...and you guessed it, Visa also pays me a quarterly dividend of $1.92 per share (yield of 0.90%). Shares are up over 8% since market opened this morning. 

Thank you for reading!

Tell me, What are your thoughts on Visa? How many cards with the Visa logo do you currently own?

Cheers to profits,

Wednesday, October 29, 2014

Coach (COH): {Earnings Commentary}

Coach announced earnings around 7am yesterday morning. I woke up bright and early and listened to the results as I got ready for my workday. Coach is a company I've been keeping close track of for a couple of years now. I bought coach in 2012, ironically right before the time in which it started its downward spiral. As the say--- with the stock market you win some and you lose some. Owning this company during its tormentous years has taught me a whole lot not only about my personal risk tolerance (which, to my surprise, appears to be quite high) but about investing in general. I have been lucky enough that the vast majority of my portfolio has been successful but then there is always that one stock that you either need to sell immediately or you understand that it needs "more patience" than others-- and the latter is where coach has been for me for some time now.

Original Investment Thesis

One of the reasons why I first purchased shares was primarily because of the company's internationally recognized and incredibly strong brand. I had been wanting to put some money in retail- but not just any retail. I wanted a company with a history of strong earnings, profitability, and a solid brand. Truth is that for a very long time coach was one of the most profitable companies out there and they pretty much dominated the luxury bags sector for many, many years. However, as we all know-- past results are never a guarantee of future performance.

I still remember the days (not long ago) when owning a coach bag or any of its products was synonymous with style, elegance, and utmost luxury. Although this may still be the case to an extent the truth is that fierce competition, special from companies like Michael Kors (whom I believe to be its current main competitor) has resulted in Coach struggling to maintain its competitive advantage and the prestige of its brand. My original thesis for purchasing this stock has obviously changed in more ways than once including the fact that there has been a changed of management since my purchase of the stock. The company is currently going through growing pains resulting from an laser-focused and determined corporate strategy that is meant to position the company back on to a path of profitability. In general, the company is looking to transform in to more of a lifestyle brand and steering a bit away from that "luxury-only" focus the company has had pretty much since its inception.

Highlights From this morning's earnings call

The good…

  • The coach brand seems to continue its growth and strength at the international level. Overall- international sales increased 4% to $381 million in comparison to $365 million during this same time last year.
  • In China alone, sales increased 10% this past quarter with positive comparable store sales. Per the press release, Europe sales also came out strong growing at a “double digit pace” in both, total and comparable store sales.

The not so good…

  • Reported general sales of $1.04 billion, a decrease of 10% in comparison to sales same time last year which were reported at $1.15 billion. Net income was reported to be $146 million in comparison to $218 million, during same quarter last year.
  • Sales in North America decreased 19% to $634 million in comparison to $778 million during this same time last year—As per CEO Victor Luis; the sharp decrease in sales was triggered by Coach Strategy to lessen promotional events; a strategy that is meant to uplift the brand by lessening the amount of discount on products. The thought process behind this is that ongoing sales and coupons as well as ongoing outlet promotional events contributed to brand dilution. Hence, by lessening promotions; the brand is looking to strengthen; and this is an area of focus.
  • Operating income, margin and gross profit also showed a decrease in comparison to same quarter last year.

My Two Cents

The majority of my shares of Coach are on hold. As a long time investor, with a very long term view on my investments, I've made a decision to wait out this transformation period and keep the shares I currently own for at least 5 years. Although it feels like its been a century; I purchased shares for the first time around November 2012 so it hasn't even been two years. 

I have to be transparent and completely honest on this blog in terms of what I would tell an investor just starting out. Thus, I do have to say that unless your risk tolerance is extremely high and you understand this company is going through an aggressive transformation phase; this is not a stock I would recommend to anyone looking for a quick profit or a quick turn around. This is one of those high quality companies for which a whole lot of patience (and risk tolerance) is needed. 

In the meantime, I plan to continue collecting my dividends which is currently at a very nice yield of 3.80% ($1.35 per share). The company has agreed to continue paying this dividends as they continue working on their strategy of transformation. And this is a perfect example why most of my portfolio is composed of dividend-paying stocks; because you truly never know what can happen and at least you can still collect income  when the unexpected occurs. 

Tell me, what are your thoughts on Coach (COH)? {Its products and/or the stock itself}

Sunday, October 26, 2014

Procter & Gamble (PG): Earnings Commentary

I have to admit PG is one of my favorite companies. It is a solid leader within its industry and its products are recognized globally for value and quality. In case you were not aware, PG is the owner of the following brands:

I actually purchased shares of P&G back in 2012 as part of a family members portfolio. The stock has been doing very well since time of purchase. This recent earnings call was particularly interesting as CEO A.G Lafley has announced that PG will exit the pet care industry, selling off their division to another company. They'll also be spinning off Duracell which will be operating as a stand-alone company. 

I have to admit one of the reasons why I love studying businesses (I did a lot of that during my MBA years) is because it intrigues me to see the strategies companies come up with in order to remain competitive, grow, and strengthen their leadership position. In exiting a particular division and spinning off another, P&G is looking to focus on their "biggest opportunities", as it was noted in their earnings report. My take away from reading about this initiative is that PG wants to zero-in on those businesses in their portfolio of brands which they feel can continue growing for the utmost profitability . This will help ensure a focus and will help them remain remain successful.

Here are some of the financial highlights of the earnings call:
  • Earnings per share increased 2% year over year to $1.07 per share
  • Organic sales across all segments increased 2% for the quarter
  • Net sales for the quarter were at $20.8, remaining flat in comparison to same quarter last year.
  • Operating cash flow for the quarter was at $3.6 billion while free cash flow was at $2.8 billion.
  • A total of $4.2 billion was returned to shareholders in the form of dividends and share buy-backs.
  • Health care segment organic sales increased 7% while baby, feminine and family care segment organic sales increased four percent. All other segments remained unchanged.
As per CEO Lafley, results were on track with expectations.

Brief background on Duracell-- The business was acquired in 2005 as part of Gillette (Procter and Gamble acquired Gillette corporation back in 2005 and this included all the businesses and brands within it). Since the acquisition took place, Duracell has continued to strengthen its position as the global market leader in the battery category. As per Lafley: “It’s a business with attractive operating profit margins and a history of strong cash generation. I’m confident the business and its employees will continue to thrive as its own company.”

I don't know for sure why but I have a good feeling about the strategies P&G is undertaking and I have confidence in that management is doing a phenomenal job running this company. I am not sure whether I'd like to participate in trading in some PG shares for Duracell once the company officially goes off on its own, but I may consider it. We'll see what happens. In the meantime, my family member is to remain a happy shareholder of PG.

Tell me, what are your thoughts on the Duracell spin off? were you surprised?

Thursday, October 23, 2014

Coca Cola (KO): Earnings Commentary

Hey all!

Hope everyone's week is going great so far. We are having some rain here in New York City but I love rainy days so, works for me.

As time permits, I try to make it the norm here on the blog to share a quick summary of the earnings results for stocks in my portfolio as well as my opinion or "two cents" on said results. The first company in my portfolio to report earnings was Coca Cola (KO) a couple of days ago on 10/21/14 {third quarter 2014}. Without further 'ado, lets get right to business.

Quick Background/Original Investment Thesis:

I bought shares of Coca Cola for the first time back in 2010. I cant believe its already been four years. My original thesis for buying coke was that I wanted to have a reliable, consistent company in my portfolio with a history of solid earnings and a company I didn't see going out of business ever, or at least not in my lifetime. I also loved the fact that coke pays dividends and it doesn't hurt that Warren Buffet loves the company, believes in it, and has an outstanding 9% stake in the company (is actually Buffet's largest holding right next to Wells Fargo). I've always seen coke as more than an  "American trademark", this is a brand that is recognized pretty much in the entire world. So, for said reasons, and a few others, I wanted the company to be part of my portfolio. With a solid ROI since time of purchase, the stock has not disappointed me but I am now facing a dilemma. And that brings me to the next headline below.

Highlight of Results:
  • Cash from operations year-to-date is at $8 Billion
  • Net Revenue declined 2% year to date
  • International volume grew 1% for the quarter but decreased 1% in North America
  • Reported operating income increased 10% for the quarter, 2% year to date
  • Third quarter earnings per share came in at $0.48 which represented a 13% decline from the second quarter 2013. Comparable EPS reported at $0.53, same as last year same quarter.
Where do I even begin with this? I suppose the bottom line is that Coke is not doing very well when it comes to growth and sales increases, specially in North America. CEO Muhtar Kent attributed the slowing in growth {in part} to a "challenging macroeconomic environment". I suppose that part of those 'macro reasons' include the fact that a lot of people are moving away from items labeled as unhealthy such as soft drinks and going more towards "healthier" alternatives. It doesn't help that sodas {including diet alternatives} have been getting a bad reputation in the media for a long time coming now. It is true that for many years now coca cola executives have understood the fact that they need to diversify in terms of product offerings and offer more "health conscious" alternatives. Because of this, they have invested in teas (i.e.: honest tea), as well as offer smaller sizes in their cans and bottles (less calories, etc.). However, the strategies do not appear to be doing enough and more needs to be done.

One thing I like to see companies do when "issues" arise is that they immediately identify said issues, communicate with shareholders, and apply a course of action with goals and objectives. This is exactly what Coke has been doing. During their recent earnings call announced they will be carrying out a series of strategies in order to "reinvigorate long term sustainable growth" and strengthen long term financial performance. Part of this plan involves increasing productivity target to $3 billion in annualized earnings by 2019. They will also focus on streamlining/simplifying the organization by refranchising company-owned bottling territories in North America and pretty much handing over operations to bottlers. This should lessen the burden of expensive/labor intensive bottling processes and can allow coke to focus back on its core product and operations.

My Two Cents

Coca cola remains an internationally recognized and incredibly strong brand. I doubt that will change from one day to the next (or anytime soon). I strongly believe hard core soda lovers have deaf ears to any negative commentaries regarding how "unhealthy" soft drinks are and they will continue drinking soda. However, what I do question is whether the number of "die hard" soft drink lovers and devotees is lessening over time. Also, whether this is a trend that will continue on as the years go on.

As mentioned, I love the fact that coca cola recognizes its weaknesses, acknowledges them, and has set up a plan of action. However, I also feel that it will in fact take time for the company to reposition itself back to growth and I wonder if growth is even possible (unless they start making more strategic acquisitions which something I've seen competitor Pepsi Co. doing aggressively over time).

My dilemma- I could either keep coke in my portfolio and continue collecting the dividends. I can see the stock price appreciating over time but I wonder if I will have to wait a long time for significant stock price appreciation and whether my money is better off invested in a different company with stronger growth prospects. If I do decide to sell my shares of coke, however, I want to know exactly where that money will go. I will leave my position as it is right now until I figure that out. Will keep you guys updated! Any thoughts and/or comments are welcomed.

Tell me, what are YOUR thoughts on coke?

Thank you for reading!

Cheers to profits,

PS: I shared coke as a great "starter stock" on my prior post for individuals just getting started in investing. My position on that has not changed.  However, I will write a follow up post with an "alternative" for individuals whom may be looking for more growth-focused companies. I have edited the prior post to include this comment.

Wednesday, October 15, 2014

Women and Investing (Part Two): five simple steps to get started *Plus* five great companies under $100

...felt this quote would be perfect for the purpose of this post:

One of the very first posts on the blog emphasized the fact that stock market investing is not rocket science. This is something I have tried to explain to ‘skeptical’ people time and time again. In this blog post I’ll try to narrow down the instructions on how to get started and offer a list of 5 individual starter stocks which you can purchase for well under $100. I want to make it known that you aren’t going to become a millionaire from investing in one single stock. The point is to I truly believe that taking that first step can significantly lesser (or eliminate) the fear many of my fellow ladies (or people in general) have in starting to participate in the stock market. So, without further ado, here are the steps. Straight to the point:

1. Open a brokerage account. I recommend Tradeking simply because they are the best deal I currently know of + I have experience using them. At $4.95 per trade you can buy or sell any number of shares of individual stocks for a particular company.
I have mentioned in the blog that I also have an account open with TDAmeritrade but it charges me $9.99 per trade and to be quite honest, there is no much difference between the accounts (at least not in terms of the features that I use). I simply want my money to be safe and to be able to buy and sell stocks whenever I want without incurring unreasonable trading fees. Tradeking does that seamlessly. There are several other brokerages out there, even cheaper than $4.95! but do your research and make sure is a legit company and that they are protected by an entity such as the Securities Investor Protection Corporation (SIPC).

Note: I do not get any kind of commission/payment/compensation from any brokerage firm (zero, zilch, nada). I am simply sharing my personal experiences and like to recommend companies I have used myself.

2. Confirm your identity with the brokerage account. In the case of Tradeking, they may ask you to fax them a void check with a picture ID. I am sure most of the brokerage accounts have a similar process . You know- to make sure you are not laundering money or pursuing any illegal actions of the sort.  

3. Link your checking account with your brokerage account and transfer money. Soon after you complete your application you will get a notification/email on how to complete this process. They offer several options from sending in a personal check to simply linking your bank accounts. However you decide to do it-  I recommend transferring $100 to start off. That’s more than enough to get started. Again, the point of this is to

4. Wait the three or so days clearing period that it takes for your money to be available for investing.

5. Once you have the green light from the brokerage account is time to start investing!

Great companies under $100 you can invest in:

The prices posted below are as of end of today 10/15/14 (remember that stocks go up and down on a daily basis. I have embedded the link to the Yahoo! Finance page for each company below. You can click on the company name for the most recent prices.):

1. Starbucks $72.12 // Yearly dividends: $1.04 per share

2. Coca Cola $43.20 // Yearly dividends: $1.22 per share

3. Master Card $70.36 // Yearly dividends: $0.44 per share

4. Colgate $63.33 // Yearly dividends: $1.44 per share

5. Procter & Gamble $82.49 // yearly dividends: $2.57 per share

*BONUS POINTS: After you've bought your share of said company; you can contact the brokerage company directly and ask them to involve you in "DRIPS". Drips stands for dividend reinvestment program. Each of the above noted companies pays dividends on a quarterly basis. Hence, what will happen is that each time the company pays you a dividend; the brokerage account will automatically reinvest that money back in to the company, buying you a percentage of an additional share. I like to think of this as a "little money machine". The more shares you have, the more dividends you'll get every quarter. I would highly recommend doing this in the meantime until you get more confident in investing and are willing to buy additional full shares. With the drips program you don't need to add any additional monies. This is no "get rich quick scheme". Again, I just want you to get.started. Cant emphasize that enough.

I've shared this great article about DRIPS in the past but plan to write a quick and practical read providing general information on the subject. Stay tuned for that.

Note: If you want further clarification or details on the above noted steps or would like for me to sit with you, meet with you, talk to you over the phone, etc. in order to walk you through the process; do not hesitate to contact me. You can email me at
Thanks for reading and as always, cheers to profits!

Edited to add: I currently own shares in all of the above: SBUX, KO, MA, CL, PG

Edited to add: Coca Cola just recently announced earnings on 10/21. {after I wrote this post}. You can read my earnings commentary here where I mentioned that, although I still feel coca cola is still an amazing starter stock, I will be sharing a new post with an "alternative" for individuals whom may be looking for a company with stronger growth prospects.

*please do not invest or cease to invest based on the information noted above. The named companies are simply suggestions based on my own experience and research. Please conduct your own personal research and assessment of the noted companies prior to investing.

Saturday, October 11, 2014

Why more women should invest in the stock market (Part One)

When I first became interested in the stock market and learning how to invest (over 10 years ago!) one thing that became very clear to me from the beginning is that many of my fellow ladies did not share my same enthusiasm. Fast forward a few years later when I actually started to invest and attempted to share insights with friends I realized that the majority of the people that wanted to have a conversation about it where male. While many of my female friends seemed interested up to a certain level; I got the impression that fear was preventing the majority from making the leap from talking about it to actually taking action (I was one of those people!).

I have shared many times on the blog (and in the 'about me' section) that if it wasn't for a former male co-worker teaching me how to invest in individual stocks, step by step, and assuring me how the majority of my fears were unfounded-- I probably would have never gotten started. Or would have started a lot later than I actually did.

This is the ironic part: There are tons of studies out there showing that women make better investors than their counterparts for  several reasons. A couple of the reasons that are brought up the most are:

1. Women have more patience when it comes to investing and don't overreact as often (read: less testosterone)
2. Women are more risk averse.

(...hey guys, don't get offended, just citing the evidence, evidence, evidence).

In other words, females have less of a tendency to panic when facing the inevitable ups and downs of the market and therefore, hold their investments for the long term, saving in trading fees and financial expenses of the sort. Women are also more analytical by nature when it comes to the investments that they make and are more skeptical when it comes to investing in complex securities that do not make any sense (one of the main reason for the financial crisis). Women invest in what they can understand and what they are familiar with rather than jumping head first in to the unknown {not saying all males do it. This is simply an example}.

I know this can turn in to a controversial topic and I am not one to point any fingers and/or make generic statements on the matter. I know everyone is different, regardless of gender, and one's ability and propensity to invest depends on a multiple number of factors. But nonetheless, as I eagerly researched the reasons why there is such scarcity of women in the stock market, I found that fear seemed to be a common theme. Hence, what I am trying to bring across with this post is that the majority of those fears do not have a basis and thus, I would love to see more women participating in the world of individual stock investing. I am making it my mission to encourage this (more to come on that).

To put things in to perspective, studies show that only 25% of women feel confident enough to manage their own stock market investing. That means that a staggering 75% would rather not get involved at all or give the task to someone else.  And this is whats more interesting-- women are known as the "Chief Purchasing Officers" of the home. Often in charge of making the ultimate decision of where and how to spend the money that comes in. If women only knew that they could make a nice sum of money simply by applying those 'strategic purchasing decisions' to their brokerage accounts, we would see a lot more involvement.

Women are often  the first to know what is popular and what is on style when it comes to retail, accessories, brands; they know which products are worth a splurge and which can easily become a substitute, they know which items they purchase consistently or "cant live without", and which they only buy when the economy is "good"-- all factors that can become significantly important when it comes to affecting the bottom line of any publicly traded company.

As a general example--a women that is "in the know" when it comes to brands and style could have probably been quite valuable in identifying when the shift in brand preference began to transfer between the Coach brand to Michael Kors, about 2 years ago and could probably identify when this trend begins to shift again to either another brand or something else.

In part 2 of this post, I want to give some practical tips for 'skeptical' women on how they can get started with minimal risk and limited funds. Invite your girlfriend, wife, mother, sister, friend, neighbor, every female you know to read these post and get excited about the wonderful world of investing. I'll also share another post on popular brands who make a fortune thanks to the female consumer. Why should men be the only ones making the profit from the stuff women buy?! We should all benefit.

What are your thoughts regarding women and investing?

Thank you for reading.

...and as always cheers to profits!


Wednesday, October 8, 2014

A Stock on my Radar: Amazon (AMZN)

Hey all!

Hope you've all had a good week so far. Im excited because earnings season starts today with Alcoa (AA) being the first company on line to report earnings, as it is the norm. I already have the dates in which the companies in my portfolio are reporting and will be sharing the results with you guys (and my thoughts on it) as time permits.

Today I want to talk to you about a company that has been on my radar this year but I have yet to purchase any shares. That company is Amazon (ticker symbol: AMZN).

I think the first time Amazon really caught my attention was about 3 years ago when my accounting professor in graduate school was explaining how incredibly clever the business model of this company is. The professor was letting us know that high levels of investory can be a killer for any company if the inventory doesnt move fast enough. In the case of amazon, the company had zero inventory yet was highly profitable and was able to keep their profits on the books for about a month before they had to pay their suppliers for anything. Basically, someone would order an item and amazon would let the supplier know about the order. Amazon would be serving as some sort of "middle man" simply collecting payment and orchestrating the delivery of the items. Simply genious.

This summer I listened to a webminar series from an incredibly intelligent investor whom I respect very much. During the presentation, someone asked a question about which companies should one focus on when it comes to investing considering that there are so many publicly traded companies out here. In a very insighful answer he advised that one way to approach this is to have a vision in our minds of how we feel the future will look like. We should then invest in the companies that match that same vision of our future.

I dont know about you but when he said that everything made sense to me and I was quite impressed by such a 'simple' yet right on theory about investing. When he said this, my mind immediately ran towards technology and web based companies. I truly believe that one day every single transaction we ever do will take place electronically- via our smart phones, tablets, laptops and through some sort of technology (it feels as if we are there already, doesnt it?). I also feel that companies that already have some history, traction, experience and a strong customer base will be the ones to lead the pack and be at the forefront of this continuously changing world.

So, why Amazon? Not only do they have an incredibly clever business model, as previously explained, but they seem to be the end all be all for online shopping and people love it. It kind of reminds me of the reason why I bought shares in Google about 6 years ago-- because the first thing that would come out of peoples mouth when it came to researching something was "google it". In that same respect, when it comes to Amazon, the first thing most people would ask when shopping for the best deal on an item is "did you check amazon?". And those are the kind of companies I want to be part of.

It is true that Amazon has gotten a whole lot of criticism over the years considering management is pretty much reinvesting all the profits back in to the company in different ventures and "experiments" as it seeks to add additional services for its customers. However, I feel the company is simply getting ready to take over the future {maybe the world} and is making strategic up front investments today in order to be able to reap the rewards in the future. The company is making sure it remains relevant with the times and what the customers want by offering diversified services. Long gone are the days in which people simply used Amazon to buy a book. Now you can pretty much buy anything from toilet paper to groceries and everything in between and have it delivered to the comfort of your own home-- for free! (with a prime membership). Not only that but they have been creating their own exclusive products from phones, to tablets, ereaders, television, shows, music, you name it they probably have it or are working on it.

And lets not even get in to the drone revolution and how they are already conjuring a away to eliminate the postal service system as their "middle man" in delivery. Instead, they want to deliver things to you via a flying device (although I am yet to understand how they'll be able to pull that off but everything is possible in this interesting world of ours).

As I write this, the stock is trading at $317.22 per share and pays zero dividends. One of the issues that seems to have current shareholders a bit upset is the fact that because of all the R&D investing going on, the company refuses to pay dividends as of yet and, please correct me if I am wrong, I dont think there's ever been a share buy back. Instead the money is being spent on new products and developments, as previously mentioned. I dont think theres necessarily anything wrong with that as long as there is a hefty profit at the end of the rainbow.

I have yet to purchase shares and I am ashamed to admit that it is because of the price. I recall I bought Google around the same exact price and look where it is today. Nonetheless, we shall see what happens in the coming months and whether I gather enough courage to click that "buy" button on my brokerage account. I strongly believe this is a solid company that will be highly profitable for many, many years to come.

Amazon has been around since 1994 and its founder, Jeff Bezos, remains in the company as the CEO and is highly involved in all operations which is something I love to see in the companies where I invest.

Tell me, what are YOUR toughts on Amazon?

Thank you for reading and cheers to profits!


disclosure: I do not own any shares of amazon (amzn).