Investment U<\/em> Video Archive<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\nIn focus this week: getting juiced takes on a whole new meaning, AT&T and Verizon’s war for mobile data, and the SITFA.<\/p>\n
There’s a Bull Market… in Juice!<\/h2>\n
According to Barron\u2019s,<\/em> what do Bill Clinton, a million hedge fund managers and a lot of housewives have in common?<\/p>\nJuice! Spinach slurpees, kale cocktails, super fruit smoothies!<\/p>\n
A Barron\u2019s<\/em> article said the liquid lunch is taking on a whole new feel in our well-heeled suburbs and trendy cities. Martinis are out, brackish-looking goo is in!<\/p>\nA 17-ounce bottle of cucumber, celery, parsley, kale, dandelion, Swiss chard, lemon and ginger juice will set you back $13.<\/p>\n
It\u2019s a $5-billion industry and growing like crazy!<\/p>\n
Big players are jumping into it in a big way. Campbell Soup, Coke, Pepsi and Whole Foods are buying small juicers, and a Whole Foods spokesman said this segment is growing faster in traditional stores than in others.<\/p>\n
Sales have grown 58% since 2004. Starbucks<\/strong> (Nasdaq: SBUX) is in on the game with Evolution Fresh that has an 11-foot wall with spigots that dispenses all kinds of juices.<\/p>\nA SBUX spokesman said they will do for juices what they did for coffee. Wow!<\/p>\n
Matthew DiFrisco, an analyst who follows SBUX, said this could hit 1.3 billion in sales just at SBUX!<\/p>\n
McDonald\u2019s and Dunkin Donuts have been pushing a part of this segment with fruit smoothies, and some of the names to watch for: Juice Press, Organic Avenue and Earth Bar. In fact, Earth Bar is opening stores in Malaysia and Singapore.<\/p>\n
Scott Van Winkle said in the Barron\u2019s<\/em> article that every player in the food business is either looking at juicing or moving on it.<\/p>\nKale cocktail, no thanks!<\/p>\n
AT&T and Verizon Fighting for Your Data Dollars<\/h2>\n
AT&T<\/strong> (NYSE: T), according to Barron\u2019s<\/em>, is the pick over Verizon<\/strong> (NYSE: VZ) as the dividend play in the data and wireless area. The demand for wireless may not be good for our wallets, it\u2019s getting pricey out there, but it\u2019s great for AT&T.<\/p>\nAT&T has $4 billion in stable cash flow, and it could expand even further as our demand for data usage and their customer loyalty grows.<\/p>\n
With a 5% yield, and a lower price-to-earnings basis than VZ, it still has a comparable long-term growth estimate.<\/p>\n
AT&T pays three times the 10-year Treasury yield with good upside potential, and, according to Dan Genter of the RNC Genter Dividend Income Fund, the dividend will continue to grow.<\/p>\n
AT&T will be spending $9 billion in a stock buyback, that\u2019s about a 5% of the float, Verizon isn\u2019t, and analysts expect earnings to grow at 5% quarter over quarter.<\/p>\n
The company\u2019s subscriber base is also less fickle than it used to be. Most of their base is family and business with less churning than in the past.<\/p>\n
Analysts see the industry coming down to two players, AT&T and Verizon, many of the small players have been bought up or forced out, and right now the edge is with AT&T.<\/p>\n
Look for earnings to grow and increasing margins as demand for data increases, and everyone is looking for constantly increasing demand\u2026<\/p>\n
The stock is not likely to explode upward, but we do have a very nice defensive dividend play in AT&T.<\/p>\n
Finally, the SITFA<\/h2>\n
This week the slap-in-the-face award goes to the folks at Squawk Box on CNBC.<\/p>\n
In an economy where we have 15% real unemployment, a GDP that looks like it headed for the toilet, the EU crumbling, China slowing and almost no good news for the consumer in the energy and food sectors, CNBC ran a segment this past week about how cheap it is to own your own island.<\/p>\n
I\u2019m not kidding!<\/p>\n
Yes, when folks are being put out of their homes, the over-50 crowd is being forced out of the job market, the market seems to have nowhere to go but down, the producers run a segment about how affordable your own island can be? Come on!<\/p>\n
But wait, says CNBC. Islands have dropped in value anywhere from 20% to 80%. Oh, boy!<\/p>\n
You can buy an entire chain of islands in Greece for less than 5 million euros. Why have one when you can have a chain?<\/p>\n
Why have prices gotten so low? One island owner was quoted as saying that his kids have so many soccer matches they can\u2019t find the time to use it.<\/p>\n
Well, a little reality anyway.<\/p>\n