Breweries at all time highs

If you're a beer drinker there's great news. The number of breweries in the US is at all time highs. It's surpassed even the late 1800's when your local beer was really local. Without fridges a horse and cart limited the distance for a cold beer. Prohibition was the cause of the large dip in the 1920's.

The range of beers has increased significantly but as an investor its hard to get exposure as the majority of craft beer are local private companies. One listed craft brewer is Samuel Adams (SAM) they also sell Angry Orchard Cider and Twisted Tea. SAM has grown so tremendously that the Brewers Association of Craft Beer has had to change its barrel production limit from 2 million to 6 million to accommodate their growth. SAM is a great company but the competition in craft beer and their 'size' has led to slower growth with sales for SAM's declining last year. The major beer companies have bought into a number of smaller craft brewers.

While growth for SAM has slowed it's hard to count them out Angry Orchard is the no.1 cider brand they are also introducing nitro beers. Apparently nitrogen gas gives beer a creamier, smoother texture. If that doesn't work they are also introducing alcoholic sparkling water. SAM is continuing its innovation alongside the 4,300 other brewers. The investment outlook is cloudy but it sure is a great time to have a drink.

Decisive has no position in Samuel Adams (SAM). 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.

Google and Facebook the online duopoly

Traditional media is dominated by the big 6 movie studios (Warner Bros, Fox etc) and 4 broadcast channels (ABC, Fox etc) however as we move online it reduces to two. Google and Facebook are new media and dominate the time we spend online. Top online activities are not just media viewing but also social networking and messaging. Google has 5 of the top ten apps while Facebook has 3.

As a social network Facebook is on another scale. Its 17.2% of all digital media time spent.

Want to keep up with the hottest new apps? See the fastest growing below.

Maps continue to be the most used mobile app (thank goodness no more map directories)

Note charts are sourced from Comscore's 2016 US Cross Platform Future in Focus report

Decisive has a position in Alphabet/Google (GOOG) and Facebook (FB). 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.

It's Easter and what's Easter's favourite ingredient? Chocolate. Chocolate sales always increase in Easter but in a sign of the times chocolate sales fell -0.6% over Valentines (4 week period ending Feb 21) versus a year earlier. Let's hope Easter works out better I'll be doing my part with some of the products below.

Cadbury (owned by Mondelez) is the chocolate leader in Australia its products make the chocolate hall of fame you might have heard of Freddo 90 million are eaten every year in Australia, Cadbury Roses, Cherry Ripe and Picnic. During Easter many of these products turn into eggs.

There are certain brands that retailers have to stock to be in business Mondelez has a portfolio of them. They are also dominant in the biscuit category with brands such as Oreo otherwise known as milk's favourite cookie with 35.9% share of the US market in 2015. Over the last two years Mondelez's profitability has increased substantially but at the cost of sales. They used to have 74,000 product varieties its down to 30,000 today. Less choices for you means greater profits for Mondelez.

Chocolate is still a good investment though growth is slowing. Snacking is a $1.2 trillion market with emerging markets just beginning to snack. Branded chocolate typically have good margins, when was the last time you craved private label chocolate? We all want our Cadbury. Let's hope you get it Happy Easter everyone.


Decisive does not have a position in Mondelez (MDLZ). 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.

Best performing stocks since the market bottom

It's been 7 years since the GFC stockmarket bottom. How things have changed. Apple was only the 15th largest company in the world with a market cap of $74 billion on the 9th of March 2009. Today Apple has a market cap of $561 billion (including $216 billion cash) the largest company in the world. Energy has been a notable laggard Exxon Mobile once the largest in 2009 is now the fourth largest in the world.

Source: Bloomberg numbers total return

Hopefully you own some of the best S&P500 performers since the bottom above. Hindsight investing is a lot easier but property and hotels were the top two performers followed by consumer discretionary which dominated the list. Underwear seemed to be a standout with L Brands (owner of Victoria Secret) and Hanesbrand making top appearances. Interestingly a lot of the top performers are fairly well known brands.

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.

Tinder and Buffet not yet a Match

Buffet released his annual letter last week and as usual its a must read. The one surprise I had was Buffet mentioning Tinder saying that he was not ready to use it (see below). I was amazed he had heard about it, you've made it as a service once you're mentioned in his letter. Tinder has entered popular culture becoming a verb for meeting people online.

Tinder is a part of Match group alongside 45 other dating brands. Buffet doesn't use it so it might not pass his investment process but its interesting because Match.com is an established business with great cash flow partnered with the future growth potential of Tinder. All up they have around 59 million monthly active users with 2.5 million confirmed marriages. Match Group was spun out of Interactive Corp late last year whose track record of spin-off's include Expedia, Tripadvisor and Lendingtree.

Online dating is mainstream
If you weren't on a Valentines date last month you're very likely married or looking at online dating sites. The market for singles is expanding people are marrying later and online seems to be the best chance of meeting someone outside of friends and work. In the 70's 28-30% of Americans were single compared to 45% today (2014 US census).

Tinder has become a phenomenon it's how young people meet. It's a first impression swipe right if you like someone app. 3Q data has users swiping 1.4 billion photos a day with 9.6 million daily active users spending on average 35 minutes swiping through photos. If you haven't heard of it you must be over 35, 86% of users are under 35.

Tinder swipe right
Match has grown as online dating has become mainstream. But they do have difficulties Tinder monetises at a lower rate as most services are free, on average Tinder revenue per user is 50% lower than Match. Though Match argues that as people get older they upgrade to paid services to figure out who is serious in finding a long term relationship as compared to a shorter term Tinder crowd. Out of all of the IPOs last year Match Group was one of the more interesting having both good cash flows and future growth through Tinder it's one to swipe right and stay connected to.

Decisive has no position in Match Group (MTCH). 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.

How not to downgrade earnings

There is a certain art to profit downgrades. Some CEO's try to sneak them in on Friday afternoon others like Gary Friedman from Restoration Hardware sign off with Carpe Diem. No need for yours sincerely investors seized the day selling the stock off 26% last night (it's down 51% YTD). In what may be a first the word destroy was used twice in an earnings report. Investors took the hint and destroyed the stock.

Currency, oil and stock market fluctuations were reasons for under perfomance. Being a domestic retail company it was a bit of a strech to use currency as an excuse. I have to give it to the CEO (see below) he produces an excellent video every quarter. He's a fantastic communicator I'm looking forward to his next video release.

Decisive has no position in (RH). 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.

Macau betting with the billionaires

Ask casino owners if they gamble and the answer is no. They know the odds! It's much better owning a casino then gambling. In a down market many casino shares are up. After a tough 2015 caused by the anti-corruption crackdown in China it seems that lady luck is on their side. Some billionaires are doubling down. Steve Wynn of Wynn resorts has gone on one of the biggest insider buying sprees I have ever seen. Buying 1 million shares for $63.8m in December (real money even for a billionaire.) He then spent another $32m in January for 572,850 shares and $15m for 258,523 shares in February. It seems that Macao is making a bottom he's put his money where his mouth is.

Wynn's conference call "management is great"

Commentary from casino magnates is always entertaining. The question on why he bought so much stock. "My view is that I like Wynn Resorts especially because I think the management is great." He also mentioned that " January in Macao was the "best month in a long time." Other random comments on the call "only an Irishman would call a $1.5 billion hotel a joint. See how relaxed everybody is in this company? He might be a little biased but putting in nearly $100m to back himself is working out the stock is up 15% year to date.

Must see attractions in  Macao
Las Vegas Sands, Melco Crown and Wynn are exposed to Macao. Las Vegas Sand's Venetian is the highest grossing Macao property exceeding $1 billion plus in EBITDA in 2015. The only property that exceeded it globally was one of LVS's other properties Marina Bay Sands in Singapore. The founder Sheldon Adelson is also calling a bottom based on "well if you look it's just 70 years of experience that I have in business."

Downtown versus the strip
These companies will benefit as Macao shifts from the Pennisula to the Cotai Strip. Sheldon quoted that visitation in Cotai is now 60% whereas it used to be 100% to the Peninsula. It's a bit like downtown and the strip in Vegas. The strip is where all the non-gaming facilities are its the place to be.

Lady luck on Macao's side
Signs are improving for diversified casino operators. Melco Crown's Studio City was initially allocated 200 tables a disappointment to some but they received an additional 50 tables in January in recognition of their non-gaming attractions. It's a big deal as each table can be expected to bring in around $10,000 a day. 4 new casinos will open up in Macao this year (Macao had nearly 3 years without a new resort). The increase in supply creates more competition but it also helps to increase the Cotai's appeal over the pennisula. Las Vegas Sands and Melco Crown properties are well positioned on the strip.

For all the doom and gloom in Macao it is still the only region in China where gambling is legal. It is a market oligopoly only 6 gaming operators have access to this market. A scare market with billionaires betting on themselves sounds like better odds than gambling at a casino.

Decisive is long Las Vegas Sands (LVS) and has no position in Wynn Resorts (WYNN) or Melco Crown (MPEL). 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.