In Episode 146, Magic Markets digs into the food producer industry. This hasn’t been a great place to put your money during this period of heightened inflation, as consumer pressures tend to flow up through the value chain. As usual, we lean on our research in Magic Markets Premium for the global choice in this show, with Moe covering McCormick (20% market share in the spices and seasoning market in North America). The Finance Ghost chose a selection of South African food producers to talk about, indicating the pressures in the industry.
We’ve covered Starbucks before, the world’s most famous coffee shop chain despite strong focus on the US and China and a lesser footprint outside of those countries. Succession planning has been the Achilles' Heel of this story, with Howard Schultz having returned to the top job for the third time when we covered the stock back in March 2022. The stock was trading at $88 and we were pretty bearish. Now at nearly $97, that’s roughly a 10% return in 18 months. While it may be a timing issue, that’s actually beaten the S&P 500 index over that time period. What happened that beat our expectations? Welcome to Magic Markets Premium.
Use the podcast player below to listen to our discussion on Yum! Brands and its Q4'22 result, which accompanies the detailed write-up below: (Date of report: 16 February 2023) There’s an exclamation mark in Yum! and with good reason, as this is the world’s largest restaurant company with over 55,000 venues across various brands where you can get your calorie fix. With a footprint in 156 countries and 98% of the restaurants belonging to franchisees, this is fast food at scale. Clearly, a lot has happened in the 25 years since Yum! was spun-off by PepsiCo. At that time, Yum! was [...]
Use the podcast player below to listen to our discussion on McCormick & Co and its Q3’22 result, which accompanies the detailed write-up below: (Date of report: 13 October 2022) As macrotrends go, the need to eat is a strong one. We will always need to eat and grocery stores aren’t going anywhere, even if we might be buying online instead of in-store. But further up the value chain, things are a lot more volatile. The products on the aisle chop and change and food producers appear to carry both a growth premium as well as a defensive premium. With the [...]
Use the podcast player below to listen to our discussion on Starbucks and its Q1’22 result, which accompanies the detailed write-up below: (Date of report: 23 March 2022) Americans are really good at building global brands. There are coffee shops everywhere in the world, yet Starbucks is the only truly global coffee brand that is recognisable in all major countries. Thanks to deals with the likes of Nestle and PepsiCo, you'll also find the brand at your local grocery store. But it's not just the coffee that is brewing at Starbucks. There's a labour problem brewing as well, with the risk [...]
The quick-service restaurant (QSR) sector has been a clear winner globally under lockdown conditions. When you're worried about catching a virus, a pizza served to your car window is more appealing than a sit-down restaurant. The Domino's and Chipotle share prices have increased sharply. However, the threat of food delivery apps cannot be ignored, as the value chain in this industry is far from settled. In episode 36 of Magic Markets, hosts The Finance Ghost and Mohammed Nalla (Moe-Knows) complain about their waistlines while commenting on the restaurant sector and the competitive realities in that space. It's a fun episode with plenty to learn about [...]