India has been experiencing episodes of rapid growth since the 1980s, but the growth always seem accompanied by a question mark. Thus, V. Anantha Nageswaran and Gulzar Natarajan write in their report Can India Grow? Challenges, Opportunities, and the Way Forward (published by Carnegie India, November 2016): “Indeed, in the past twenty-five years, every time India achieved a slightly higher economic growth rate, it was followed by some combination of an external financing deficit, a rise in nonperforming assets in the banking system, a high rate of inflation with consequent currency overvaluation, and other problems. This was the ...
Climate change, drought conditions, an ever-expanding population, and growing demand for consumption have resulted in water scarcity in many parts of the world. As per United Nations, 1.8 billion people will be living in countries or regions with absolute water scarcity by 2025, and two-thirds of the world population could be under water stress. The International Food Policy Research Institute expects that there will be a 40% gap between water demand and supply over the next 15 years. Wastewater runoff from agriculture, industry, and expanding cities, especially in developing nations, is another major issue. Recycling wastewater could ease gl...
U.S. stocks have delivered incredible stock market returns for a long time: the average compounded total return on the U.S. stock market has been nearly 10 percent per year from 1927 through 2016 (Using data from Ken French’s website on the market-capitalization weighted CRSP index). Doesn’t sound impressive? Consider the fact that a $100 invested for 90 years at 10 percent would compound to over $530,000. Perhaps this is why my two favorite investors of all time suggest that savers stash the bulk of their cash in the US stock market: First, Warren Buffet’s advice: Put 10% of the cash in short-term government bonds and 90% in a ver...
ConAgra (CAG) is expected to report earnings on Thursday, March 23rd, before market open. The whisper number is $0.45, one cent ahead of the analysts’ estimate and showing some confidence from the WhisperNumber community. Whispers range from a low of $0.40 to a high of $0.55. A year ago the company reported earnings of $0.68. ConAgra has a 65% positive surprise history (having topped the whisper in 33 of the 51 earnings reports for which we have data). Earnings history: Beat whisper: 33 qtrs Met whisper: 1 qtrs Missed whisper: 17 qtrs Our primary focus is on post earnings price movement. Knowing how likely a stock’s price wi...
Just when I thought the restaurant sector was dead on Wall Street, we see that fast casual, Canadian-born Freshii (FRII.TO) has pulled off an impressive IPO, offering shares recently at $11.50 each (CAD). With the stock near $14, Freshii’s market value is approaching $430 million (CAD). Adjusting these figures into a U.S. dollar equivalent, FRII stock fetches around $10.25 with a total equity value of $320 million. Today the company reported 2016 revenue of $16.1 million and EBITDA of $3.7 million (both in USD). Based on those numbers, it would appear that Freshii shares are quite overvalued, but there are reasons that many investors are ...
The strong start to 2017 existing home sales faltered already. February wiped out the 3.3% gains in January, and then some. Econoday blames “inventory” as does Mortgage News Daily. Existing home sales are on the soft side of expectations, down 3.7 percent in February to a 5.480 million annualized rate and below the Econoday consensus for 5.555 million. Details are mostly weak including a 3.0 percent decline in single-family sales to a 4.890 million rate and a sharp 9.2 percent drop for condos to a 590,000 rate. Year-on-year, single-family sales are up 5.8 percent with condos fading and barely over zero at 1.7 percent. But total year-on-...
SNAP’s IPO has dominated financial news for the past month. After the stock gained 45% on its first trading day, bloggers called it “dumb money,” and not a single Wall Street analyst gave it a buy rating until today. In this post, we compare our transaction data for three social media giants: here’s our take on FB vs TWTR vs SNAP. Not So Millennial: According to the headlines, SNAP investors are a bunch of college-aged power-users buying their first stock ever. Our data points to a more diverse group of investors: our average $SNAP order size was over $10,000, which was slightly higher than the average order for TWTR. A fair sha...
The repeal-n-replace health care bill needs a “Yes” vote from the House of Representatives on Thursday, March 23rd. With it, the financial markets may move higher on the belief that Trump/Congress will be able to pass corporate-friendly legislation from tax overhaul to regulatory reform. Without it, risk assets may stumble on the fear that political leaders will be unable to provide ambitious stimulus measures down the road. The prospect of lower taxes has always been at the heart of the “Trump rally” since early November. To a lesser extent, the notion that the incoming President would support a $1 trillion package for roads, bridges...