{"id":107760,"date":"2017-06-20T10:12:10","date_gmt":"2017-06-20T14:12:10","guid":{"rendered":"http:\/\/countingpips.com\/?p=107760"},"modified":"2017-06-20T07:12:37","modified_gmt":"2017-06-20T11:12:37","slug":"the-whole-foods-secret-nobodys-telling","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/06\/the-whole-foods-secret-nobodys-telling\/","title":{"rendered":"The Whole Foods Secret Nobody\u2019s Telling"},"content":{"rendered":"<div id=\"inves-1566811952\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">June 20, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/06\/0617_wholefoods_feature.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/06\/0617_wholefoods_feature.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/06\/0617_wholefoods_feature-300x155.jpg 300w\" alt=\"The Whole Foods Secret Nobody\u2019s Telling\" width=\"580\" height=\"300\" \/><\/p>\n<ul>\n<li>Amazon doesn\u2019t care about organic vegetables.<\/li>\n<li>Whole Foods is officially a tech company.<\/li>\n<li>Whoever owns the data owns the world.<\/li>\n<li><strong><a href=\"https:\/\/pro.agorafinancial.com\/m\/697023\" target=\"_blank\" rel=\"noopener\">Also recommended: OPEC\u2019s worst nightmare.<\/a><\/strong><\/li>\n<\/ul>\n<hr \/>\n<p><img decoding=\"async\" style=\"float: left; max-width: 85px;\" src=\"https:\/\/duip7hn7nchpo.cloudfront.net\/editor-circle-louis-basenese.jpg\" alt=\"Louis Basenese\" \/>As the dust settles on the Amazon\/Whole Foods deal, I figured it\u2019s time.<\/p>\n<p>Time for what?<\/p>\n<p>It\u2019s time to reveal why Amazon bought the organic grocery store chain for $13.7 billion.<\/p>\n<p>Hint: It\u2019s not because Whole Foods\u2019 salad bar is so darn tasty.<\/p>\n<p>Nope.<\/p><div id=\"inves-3930852938\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>Amazon plans to turn Whole Foods into a technology company.<\/p>\n<p>Let me explain\u2026<\/p>\n<p>Amazon is the world\u2019s foremost \u201cbig data\u201d company.<\/p>\n<p>In fact, Amazon is in a race with Google to claim the title of \u201cworld\u2019s largest database.\u201d<\/p>\n<p>Data are the blood that supplies Amazon its oxygen.<\/p>\n<p>The company leverages trillions of data points \u2014 millions per second \u2014 to serve you the juiciest ads.<\/p>\n<p>Therefore, Amazon bought Whole Foods for one single reason\u2026<\/p>\n<p>The 400 existing Whole Foods locations will now exist solely to transmit data back to the mothership.<\/p>\n<p>If you\u2019re a Whole Foods customer, you\u2019re now a data point for Amazon.<\/p>\n<p>Also, if you work for Whole Foods, you now work for a data farm.<\/p>\n<p>The truth hurts sometimes, doesn\u2019t it?<\/p>\n<p>There, I said it!<\/p>\n<p>Now, in other news, the retail carnage continues.<\/p>\n<p>An activist hedge fund just disclosed a large stake in the owner of Saks Fifth Avenue.<\/p>\n<p>The activists are already calling for Saks to go private.<\/p>\n<p>Is the arrival of an activist bullish for the company?<a name=\"video\"><\/a><\/p>\n<p>My senior analyst, Martin Hutchinson, blows the lid off of activist investing below.<\/p>\n<p>Ahead of the tape,<\/p>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <em>Wall Street Daily<\/em><\/p>\n<hr \/>\n<p><script src=\"https:\/\/fast.wistia.com\/assets\/external\/E-v1.js\" async><\/script><\/p>\n<div class=\"wistia_responsive_padding\" style=\"padding: 57.0% 0 0 0; position: relative;\">\n<div class=\"wistia_responsive_wrapper\" style=\"height: 100%; left: 0; position: absolute; top: 0; width: 100%;\">\n<div class=\"wistia_embed wistia_async_sn6m6a9bf6 videoFoam=true\" style=\"height: 100%; width: 100%;\"><\/div>\n<\/div>\n<\/div>\n<hr \/>\n<p><strong>Question:<\/strong> Martin, let\u2019s continue along the compilation of a library we\u2019re building here at <em>Wall Street Daily<\/em>, chronicling important catalysts. These are baseline concepts that every investor should know. Today we\u2019re going to discuss activist investors. So let\u2019s jump right in. Martin, what\u2019s an activist?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Activist investors are big shareholders. Typically they are individuals, but not always \u2014 since there are some institutions that do it. These investors use their share state to put pressure on management.<\/p>\n<p>There are two distinct groups. One is investors such as hedge funds \u2014 who use activism as part of their investment strategy to maximize returns. And secondly, there are institutions and some individuals who use their shareholdings to pursue a political or social goal. For example, this divestment from disfavored regimes. A few institutions, such as CalPERS, the California teachers pay pension scheme, fall into both categories.<\/p>\n<p><strong>Question:<\/strong> Hutch, tell us a few techniques that these activists like to use to influence management.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> There are a number of them.<\/p>\n<p>One is a proxy battle, where they put a resolution to the shareholders meeting and try and get the shareholders\u2019 vote for it.<\/p>\n<p>Then there\u2019s a publicity campaign among the shareholders. There are shareholder resolutions of one sort or another. Litigation, inevitably \u2014 when they sue management.<\/p>\n<p>And then they can just go to management and negotiate with them \u2014 with the threat of doing other things if management doesn\u2019t do what they want.<\/p>\n<p><strong>Question:<\/strong> Interesting. So Hutch, as a shareholder, are activists on our side or are they working against us? What\u2019s the lowdown on that?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> It\u2019s an interesting question. The second group of activists, the ones who are trying to make a moral point, distract management. So as shareholders, they\u2019re not your friend unless you believe the same moral point they do.<\/p>\n<p>If you\u2019re neutral on the issue, you should probably vote against their proposals. By and large, following them will reduce shareholder returns. Otherwise management would be doing it already.<\/p>\n<p>But keep an eye on these social-goals activists. Because if a lot of their votes are winning, it\u2019s probably better to follow the herd, because all the rest of the big money\u2019s going to be doing the same thing.<\/p>\n<p>For example, if the activists are telling you to sell Venezuela and tobacco \u2014 and they\u2019re successful in shareholder votes \u2014 then probably you want to follow the herd because the big money is going that way.<\/p>\n<p><strong>Question:<\/strong> And Hutch, what about the other group?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> The first group of activists, the group that are trying to make money, hedge funds and such, they can be more useful to individual shareholders. Activist investors often outperform, so in other words, activism does work to a certain extent. By following them, you can outperform too.<\/p>\n<p>It\u2019s especially useful in very large companies that are too big for takeover bids. For example, Nelson Peltz should be able to shake-up Procter &amp; Gamble (PG). Procter &amp; Gamble is something like $230 billion \u2014 too big to take over. But you can shake it up with an activist.<\/p>\n<p>So the pluses of a big activist are they shake up a dozy management, they may produce a profitable spinoff and they may produce a tender offer for part of the shares or a big dividend or an outright sale of the company.<\/p>\n<p><strong>Question:<\/strong> How about a few of the downsides, Hutch, when an activist is involved?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> The minus is they may recommend something stupid. They distract management. It\u2019s obviously costly to go through the process of shareholder resolutions and such.<\/p>\n<p>They will tend to encourage management to overleverage the company. And they may indulge in \u201cgreenmail,\u201d which is where they get paid off to go away and other shareholders don\u2019t benefit.<\/p>\n<p><strong>Question:<\/strong> All right, Hutch, just give us the bottom line on activism \u2014 bullish or bearish?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> It\u2019s probably not wise to chase after activists. There are too many people doing it for the modest benefit they bring. But if an activist buys into your company, Google his track record and try to determine whether he\u2019s made money for other shareholders. Because some activists do make money for other shareholders, and some don\u2019t.<\/p>\n<p><strong>Question:<\/strong> All right, Hutch. As always, thanks for your wisdom on the matter.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Great pleasure.<\/p>\n<p><strong>Question:<\/strong> This is <em>Wall Street Daily<\/em>, signing off.<\/p>\n<p>Smart investing,<\/p>\n<p>Martin Hutchinson<br \/>\nSenior Analyst, <i>Wall Street Daily<\/i><\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/06\/20\/whole-foods-secret-nobodys-telling\/\" rel=\"nofollow\">The Whole Foods Secret Nobody\u2019s Telling<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com Amazon doesn\u2019t care about organic vegetables. Whole Foods is officially a tech company. Whoever owns the data owns the world. Also recommended: OPEC\u2019s worst nightmare. As the dust settles on the Amazon\/Whole Foods deal, I figured it\u2019s time. Time for what? It\u2019s time to reveal why Amazon bought the organic grocery store chain [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-107760","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/107760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=107760"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/107760\/revisions"}],"predecessor-version":[{"id":107769,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/107760\/revisions\/107769"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=107760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=107760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=107760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}