PowerTalk
Direct download: 03-29-13_REDTHREADPOWERTALK.mp3
Category:general -- posted at: 9:03am EDT

Direct download: 03-29-13_MICHAELBROWNPOWERTALK.mp3
Category:general -- posted at: 8:55am EDT

Thanks for joining me this week on PowerTalk. I’m your host Chris Versace, editor of the investment newsletter PowerTrend Profits.   If your a new listener to PowerTalk, this is the place where I bring you my 1-1 conversations with CEOs of public and private companies as well as other key people in business, politics and wherever else might be impacting the stock market and our investing decisions. 

If you’ve been here before, welcome back! As you know my goal with PowerTalk is to let you listen in on some of the conversations I’m having each and every week and to take you behind the scenes and in the know.

Over the last few years we’ve seen the explosion in smartphones, tablets and ereaders from the likes of Samsung, Apple (AAPL), Google (GOOG), Amazon.com (AMZN) and others. Those devices along with streaming services, cable news, companies like Facebook (FB) and Twitter as well as apps like Flipboard are changing the way we consume news. That’s had a negative impact on the publishing industry, specifically the newspaper and magazine industries. 

A number of newspapers and magazines have folded while others are have reduced the number of days they publish and shift their business model increasingly online. The crux of the problem is the business model of old -- advertising -- is very different in the online world than it was in the print one. That’s forced companies like The New York Times (NYT), News Corp.’s (NWSA) Wall Street Journal and others to adopt new business models. 

Joining me this week to discuss all of this and talk about some of the latest strategies being put to work to help revitalize the news industry is Andrew Nachison, one of the founders of WeMedia, a global agency, studio and idea incubator for the digital age. Clients include publishers, marketers, startups, investors, media companies and educations institutions the world over. 

During our PowerTalk, we dish not only on the challenges facing these institutions, but also why legendary investor Warren Buffett of Berkshire Hathaway (BRK.A) has been scooping them up over the last year. Andrew also dishes on those properties that are doing right and he even shares the emerging business model that could help digital publishers and disrupt Google’s (GOOG) Adsense advertising platform.  

Several key takeaway that I came away with from my conversation with Andrew include:

  • Newspaper and magazine publishers like The New York Times Company (NYT), Gannet Co. (GCI), The Washington Post Company (WPO) and others continue to struggle with the shift in advertising dollars to digital platforms and away from print. While there are some success stories in the print medium, the publishing companies continue to struggle with how they compete with online properties.
  • Publishers are experimenting with new business models, such as the paywall seen at NewS Corp’s Wall Street Journal. Several online properties, such as Business Insider and Buzz Feed, have embraced a native advertising model that includes the “advatorie”, a hybrid advertising and content that meshes well within the online property’s content offering.  This model is evident inside of other platforms, like Patagonia and other media-product providers. 
  • The “advatorie” business model poses a threat to Google’s Adsense text and banner advertising model.
  • Tablets, such as Apple’s (AAPL) iPad and others will pressure the text book industry. Already new libraries are popping up that don’t have any books. Companies to watch on this front include News Corp., Amplify and Scholastic. 
Direct download: 03-21-13_WEMEDIAPOWERTALK.mp3
Category:general -- posted at: 9:12am EDT

Fellow investors,

Thanks for joining me this week on PowerTalk. I’m your host Chris Versace, editor of the investment newsletter PowerTrend Profits.  

If your a new listener to PowerTalk, this is the place where I bring you my 1-1 conversations with CEOs of public and private companies as well as other key people in business, politics and wherever else might be impacting the stock market and our investing decisions. 

If you’ve been here before, welcome back! As you know my goal with PowerTalk is to let you listen in on some of the conversations I’m having each and every week and to take you behind the scenes and in the know.

It’s no secret that job growth has been a disappoint during the current economy recovery. No matter how you look at it and irrespective of the metric you choose, it’s been consistently and persistently weak recovery compared to others.  With wages under pressure, millions of American out of work and thousands continuing to drop out of the work force each month, it can be a depressing picture. That’s before factoring in the millions of American that have ballooned the food stamp program. Worse yet, some economists are even saying the current recovery is getting a little long in the tooth. 

It may look a little bleak out there, but there’s reason to think there is some hope for job creation in this country. 

This week I had the pleasure of speaking with Beth Solomon, the President and CEO of the National Association of Development Companies (NADCO). Development companies take several forms and work with different financing types including working capital loans, asset based financing and private equity. Examples of companies that do that include Main Street Capital Corp. (MAIN), Apollo Investment (AINV), and PennantPark Investment Corp. (PNNT) among others. The National Association of Development Companies or NADCO as it’s known is the trade association for companies certified by the Small Business Administration to provide financing for small businesses under the SBA 504 program.

Beth hammered home the fact that small businesses are the lifeblood of job creation. Despite the industry providing more than $6 billion in capital during 2012 to nearly 10,000 U.S. small businesses, access to capital remains the greatest challenge to small businesses and job creation. In the franchise industry alone, that resulted in 94,000 jobs not being created last year. 

While many think restaurants like Subway and the like when they hear the work “franchise”, you’d be surprised to learn that assisted living, child care, retailers and hotels are others account for a big portion of the franchise industry. That means companies like Hilton, Marriott International (MARR), RadioShack (RSH), Assisted Living Concepts (ALC), Sunrise Senior Living (SRZ) and others.

While commercial banks like Citigroup (CITI), Bank of America (BAC), JPMorgan Chase (JPM) and others are seeing their credit freeze start to thaw, Beth and I talk about a number of programs and other initiatives that small businesses can tap into right now to get the capital they need and put Americans back to work. 



Direct download: 03-13-13_NADCOPOWERTALK.mp3
Category:general -- posted at: 12:25pm EDT

Fellow investor,

Thanks for joining on this edition of PowerTalk, where I, Chris Versace - editor of the PowerTrend Profits investing newsletter, dish with good friend Keith Bliss of Cuttone & Co. from the floor of the NYSE. Each week we’ll be breaking down the latest goings on in the market and talking about what’s moving it. We also share what data and events we’ll be keeping our eyes on next week. 

This past week was an interesting one to say the least. From the start of the sequester and the would be snowquester on the east coast to the latest economic data that points to a firmer domestic economy. Despite a better than expected February Employment Report, there are reasons to be think that this could be an outlier rather than the real thing. Not only did the Challenger Grey Job Cuts report point to a 37% increase in job cuts during February, but sifting through this week’s Fed Beige Book reveals restrained hiring given the implications of the Affordable Care Act. Factor in the expected impact of the sequester on defense companies and related contractors and odds are job creation in March will abate. 

That’s not to say the February Employment Report was all bad. The pick up in construction jobs boosts the case for homebuilders, like Toll Brothers (TOL), Ryland Group (RYL) and Lennar Corp. (LEN) among others as well as homebuilding materials companies like USG (USG) and Sherwin Williams (SHW)

Amidst all of this, the stock market continued to grind its way higher this week with the Dow Jones Industrial Average closing at a new high and the S&P 500 not far behind. One concerning point in this move higher is that the leaders have not been the ususal suspects. That is, it’s not tech, financials or consumer discretionary that are leading the way, but rather defensive sectors like consumer staples, utilities and the like. 

On our radar next week is the February economic data that will start to reflect the jump in gas prices. More specifically that’s inflation figures a la the consumer and producer price indices as well as retail sales figures. Already a number of companies including Rite Aid Corp. (RAD), Ross Stores (ROST), Zumiez (ZUMZ), The Buckle (BKE), Fred’s (FRED) and Cato Corp. (CATO) have announced negative February same store comparisons. With gas prices up 11% on average for the month and a hefty 14% year to date, odds are there will be more disapponting retail figures to be had. 

Be sure to come back next week, when Keith and I will be break it all down again as we wrap the week and look ahead. 

Direct download: Versace_Bliss_03082013.mp3
Category:general -- posted at: 4:17pm EDT

Thanks for joining me again this week on PowerTalk. If your new to the show, this is the place where I bring you my 1-1 conversations with CEOs of public and private companies as well as other key people in business, politics and wherever else might be impacting the stock market and our investing decisions. 

I’m your host Chris Versace, editor of the investment newsletter PowerTrend Profits My goal with PowerTalk is to let you listen in on some of the conversations I’m having each and every week and to take you behind the scenes and in the know.

There’s been a lot of bluster over the recently enacted sequester spending cuts, which are really cuts in the rate of spending growth than true reductions in dollars spent. While there will be sectors of the economy that feel the impact more than others -- defense and government contractors like Lockheed Martin (LMT), Northrop Grumman (NOC) and others -- the underlying economy is in far better shape given the rebound in the housing and manufacturing economies. 

Offsetting those favorable economic factors are the impact of higher gas prices and the January tax increase that is putting less money in the average paycheck. Another factor that I am closely watching is the impact of the Affordable Care Act, which is better known as ObamaCare. We knew it would have an impact on business and this week’s Fed Beige Book, which tracks anecdotal economic information from the Fed’s 12  districts, confirms that. In my experience, rising costs -- be it fuel or healthcare costs or both at the same time -- can restrain business investment and hiring. 

Discussing all of that and more with me this week on PowerTalk is Stephen Moore, an editorial board member and senior economics writer at the Wall Street Journal. I’ve enjoyed his editorials in the Journal for a long time and it was a pleasure to speak with him. Even though we talked over a number of issues from overhauling the tax code, the rampant use of food stamps and tax inspired migration to Texas and other states from California, Stephen expressed his long-term optimism for the United States and its economy. All that and we also touched on his new book Who’s The Fairest Of Them All? 

Stephen and I both agree that the political conflict in Washington has held the U.S. economic engine in check at a time when the Federal Reserve is supply low cost gas to get the economic fire going. Near-term, the average consumer will continue to be The Cash Strapped Consumer that is found in my Rise and Fall of the Middle Class PowerTrend. 


Direct download: 03-06-13_STEPHENMOOREPOWERTALK.mp3
Category:general -- posted at: 1:54pm EDT

Fellow investors,

Thanks for joining on this edition of PowerTalk, where I, Chris Versace - editor of the PowerTrend Profits investing newsletter, dish with good friend Keith Bliss of Cuttone & Co. from the floor of the NYSE. Each week we’ll be breaking down the latest goings on in the market and talking about what’s moving it. We also share what data and events we’ll be keeping our eyes on next week. 

This past week was an interesting one to say the least. From the Italian elections and sequester to the essentially flat 4Q 2012 GDP revision, it paints a picture of increasing risk. Yet, the major indices continued to move higher and in some cases closing in on all time highs. As we saw with today’s Personal Income and Spending data, however, we are only beginning to see the impact of the payroll tax exemption expiration and higher gas prices. With gas prices continuing to climb, it’s a pretty good bet that the consumer and retailers like J.C. Penny (JCP) and casual dining restaurants like Red Robing Gourmet (RRGB) and others will feel it on the chin in the coming weeks. 

For the stock market, while most pros expect a pullback in the coming weeks, don’t expect a massive correction as the Fed has overtly stated that they will keep the ‘punch bowl’ filled for as long as it takes to get unemployment down below 6.5% (February employment situation will be reported on March 8th); which has the effect of keeping asset markets frothy.  But beware, at some point weak economic data will begin to trump fed action.  A weaker consumer may just be the first indication that there is danger ahead for the U.S. economy…and the U.S. equity market.

While the sequester is on investor minds this week -- and it should be given that those automatic cuts are set to take effect at 11:59 PM tonight -- there is another shoe to drop. That is the March 27th deadline to raise the country’s debt ceiling. Put it all together and March is shaping up to be a far more volatile month than January or February combined. 

Listen to Keith and I break all this and more down - 

  • A number of companies announced higher dividends this week, like The TJX Companies (TJX), and that follows big dividend increases from the likes of Walmart (WMT) and Coca-Cola (KO) last week. 
  • The 2013 Mobile World Congress was held and a number of new mobile products and services were announced. One of the most interesting ones to me was Qualcomm’s (QCOM) Wi-Fi enabled coffee pot. Talk about a compelling set up for the connected home. 
  • This morning we learned that factory activity in China slowed during February as the official PMI reading slipped to 50.1 from 50.4 in January.
  • Apple (AAPL) held its annual shareholder meeting and to much chagrin the company did not announce any new initiatives to use is $137 billion cash war chest. 
  • Struggling daily deal company Groupon (GRPN) announced the departure of CEO Andrew Mason. Even though the shares rallied after the announcement, Keith and I both agree this was a decision that was long-time coming. 
  • There were some bright spots in the domestic economic data this week. There was strength in housing and below the durable goods headline -- machine tool orders up 13.5% in January. That means good things for homebuilders like Toll Brothers (TOL), Ryland Group (RYL) and others as well as key suppliers, such as USG (USG), Sherwin Willliams (SHW),   and service providers like ADT Corp. (ADT). 

Be sure to come back next week, when Keith and I will be break it all down again as we wrap the week and look ahead. 

Disclosure: Subscribers to PowerTrend Profits were alerted to add shares of USG (USG) and ADT Corp. (ADT) at $29.19 and $46.54, respectively.


Direct download: Versace_Bliss_03012013.mp3
Category:general -- posted at: 9:51am EDT

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