Appdate with Comscore

Comscore (SCOR) is the leader in measuring where we go on the internet. They have great insights on how we spend our time. Their most recent app update shows that Facebook and Google owned apps continue to dominate with 8 out of the top 10 apps.

Source: Comscore insights

Apple now has over 1.4 million apps. The bad news is that it's very hard to get your app to stand out as usage is very concentrated (see below). 40% of the time spent on your phone is social networking and games.

Comscore's own update
Getting an app out there is competitive and so is the general battle for eyeballs. Time spent on devices is moving to mobile and more television viewing is shifting online. We think a business that measures these changes is a better way to participate in this growth. SCOR has the opportunity to leverage its online measurement to measure TV viewing across device and as it moves online. The increasing adoption of internet TV and watching on mobile devices means that traditional TV measurement no longer makes sense.

Measurement less exciting but with more potential
Media companies are voicing concern that current measurement systems (mainly Nielsen) are not making enough changes to measurement when viewing habits have changed. Given the measurement limitations they are leaving precious advertising revenue on the table when online viewing is not included. Nearly every media conference call involves some comment or complaint about television measurement in an internet world. This change creates an opportunity for someone to crack the cross media device code.

Source: Comscore 4Q presentation

Doing what your customers want
Customers are asking SCOR for a solution. They believe they can accomplish cross-measurement best in a recently announced strategic alliance with Kantar (see above). Kantar is the leader in TV measurement outside the US and is owned by WPP. This alliance will aid SCOR's expansion overseas combining Kantar's overseas TV assets and SCOR's digital measurement business providing a world class cross media measurement system. Everyone is watching media on TV, phones, tablets and desktops, media companies are asking for it and now we have someone to measure it.

Jason

http://www.decisiveassetmanagement.com/

Disclosure: Decisive has a long position in Comscore (SCOR) stock.

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

Hasbro playing well with Disney

The toymaker Hasbro (HAS) has got game. Their brands reported record earnings last week, raising their dividend and announcing a $500 million stock buyback. Lately they have had plenty of good news to share. Late last year Disney Princess ditched Mattel for HAS. Starting in 2016 Disney Princesses will be hanging out with the team at HAS ending a nearly 20 year partnership with Mattel. HAS has traditionally been strong in boys but with Frozen and Disney princess HAS will have a massive legup against its rival Barbie and Mattel.

Playing with Disney
Disney Princess is a 2016 story but this year the boys will be kept busy with Disney movie releases. In addition to Disney princess HAS has the rights for Marvel and Star Wars. It's a big year for boys toys as Avengers 2 comes out in May, Ant Man, Fantastic Four and the big one Star Wars comes out December 18. The last Star Wars film in 2005 helped sell $494 million of HAS toys. HAS are looking to up their game working on light sabers that kids can customize. It's like lego for light sabers (see below).

Source: http://kotaku.com/star-wars-bladebuilders-let-you-craft-your-own-impracti-1685846217

Monopoly is a monopoly
HAS revenues are split between licensed brands from the likes of Disney and Sesame Street and their fully owned brands. HAS owned brands have seen a renaissance by combining media and play (see below). The main driver has been movies and TV with Transformers benefiting the most. HAS has made sure that their brands are well represented on TV commenting that kids are consuming 12 hours of media within 8 hours. Kids are multi-tasking just like the rest of us doing two things at once, playing and listening to music etc at the same time.

Source: Hasbro investor day 

Entertainment and story telling has been a driver of HAS success. According to NPD entertainment based toys grew at a 7% compound annual growth rate while non-entertainment toys were flat from 2012-2014. Great stories and characters are attracting kids to their toys.

The most interesting thing about HAS is that Disney has given them their vote of confidence. HAS already has the biggest boy brands in Marvel and Star Wars, starting 2016 they will also have Frozen and Disney Princess. HAS toys will greatly benefit from Disney's film schedule. An investment in HAS is a bet on Disney's story telling success.

Jason

http://www.decisiveassetmanagement.com/

Disclosure: Decisive has no position in Hasbro (HAS) stock but is long Disney (DIS).

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

Visa and Mastercard insights to the consumer

Consumer stocks have been the biggest beneficiaries of the drop in oil and gas prices reporting some of the best results from earnings season. Visa (V) and Mastercard (MA) were also standouts and gave a great insight into the spending habits of consumers. The drop in gas prices is like a tax cut in an improving economy, with more jobs consumers should be able to save more and spend more. So far the read through is that consumers are still cautious but both of these companies are expecting this to change.

From Charles Scharf the CEO of Visa. "This drop amounts to approximately $60 per month for the average consumer. According to our surveys, approximately 50% of the savings consumers are seeing is being saved. 25% is being used to pay down debt, and approximately 25% is being spent in other discretionary categories. These categories include grocery, clothing, and restaurants. This is consistent with what we've seen in our own spend data. As we look forward, we would anticipate the savings will accumulate, and ultimately we would see more spent in the discretionary categories, including higher ticket items such as home improvement, electronics, and travel and entertainment."

"And just keep in mind a little bit, the average of $60 a month, $60 a month in its own right

doesn't change – it's unlikely that people change their behavior. I mean, if you boil it down to people filling up their tanks once a week, right, at that point you're down to $15 a week. How are you going to go spend differently? So the places that we're seeing it, which I mentioned are the grocery stores, quick service restaurants especially, are the types of places where you would see that kind of additional dollar amount. But as I said from our surveys, we know that 50% of it is being saved. That amount of money accumulates, people start to see that they have additional money, and then over a period of time will potentially buy higher-ticket items is what we would anticipate."

From the MA CEO Ajay Banga. "I think about the fact that it's $800 a month (I think he meant year, Jason), or whatever it is to a middle-class family, the gas prices are down 12% over this same time the previous year, and that's not a small number here. So, when we put all that into context, you would've thought it'd flow through. But the way, I think about it, I was in Davos, we've talked to so many other fields about this, I just feel that maybe it is that it's going to take three months or four months for the U.S. consumer to feel that this is something that's going to be with them for a little while. If you have a longer-term perspective of the price of gas, not going back to $100, but maybe settling in at $75, $80, that's where we're thinking. I don't think the U.S. consumer knows whether to expect this to be sticking around or not, so I think there's some degree of, let's say, the desire to see that through before they really start spending that kind of money. So, if you were to ask my opinion and my guess, I would say, we're probably a month or two or three away, if this price stays where it is, for them saying, you know what? I do have $800 a month more in my pocket, and I could afford to go and buy X. I think that's kind of what I think about it".

Source: Visa investor day

Both companies were impacted by the decline in gas prices reducing revenue growth by 1%. However this was offset by the trend to e-commerce. The great thing about e-commerce is that cash does not work in the online world and it is growing nearly three times the rate of retail spend. Cash is still the number one competitor for these companies and luckily for them cash can't be accepted online. Also while V and MA are big marketers cash can't advertise. Both companies are in a great position when their main competitor (cash) cannot advertise back! 

Jason

http://www.decisiveassetmanagement.com/

Disclosure: Decisive has a long position in Visa (V) stock.

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

China Hurun

The Hurun Report recently released their Best of the Best Awards for 2015. Hurun is famous for releasing China's equivalent of the Forbes 500, a magazine targeted towards China's richest. Their survey saw Apple voted as the top gift brand for both men and women. In China Apple is the luxury brand iPhones are now officially more valuable than handbags (see below). The corruption crackdown is still having an effect on gift giving down 5% year on year on top of the 25% fall last year.

Source: http://www.hurun.net/en/ArticleShow.aspx?nid=9604

Australia was the preferred international travel destination with Qantas voted as having the best year on year performance for business class meals. In what should be good news for the Aussie economy travel and retail go hand in hand 7 out of 10 luxury purchases are bought overseas.

Source: http://www.hurun.net/en/ArticleShow.aspx?nid=9604

Jason

http://www.decisiveassetmanagement.com/

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.