Amazon Acquires Whole Foods !

This will be an all cash deal valued at just under $14 Billion Dollars.

Amazon Announce dealt o Acquire Whole Foods Market (WFM) for Just shy of $14 Billion dollars.

Whole Foods started in 1980 in Austin, Texas. Today it has grown to 465 stores and has a current Market Cap of  $10.5 Billion. Whole foods has a reputation as a supplier to a large group growing health conscious consumers that demand healthy, organic , wholesome food products.

Amazon & Whole Foods Press Release :

Whole Foods Market ranked #28 and Amazon ranked #2 on Fortune’s 2017 list of World’s Most Admired Companies

SEATTLE and AUSTIN, Texas, June 16, 2017 (GLOBE NEWSWIRE) — Amazon (NASDAQ:AMZN) and Whole Foods Market, Inc. (NASDAQ:WFM) today announced that they have entered into a definitive merger agreement under which Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

“This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” said John Mackey, Whole Foods Market co-founder and CEO.

Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world. John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.

Completion of the transaction is subject to approval by Whole Foods Market’s shareholders, regulatory approvals and other customary closing conditions. The parties expect to close the transaction during the second half of 2017.

Read Press Release in its entirety : Amazon-to-Acquire-Whole-Foods-Market

This will be an all cash deal valued at just under $14 Billion Dollars. it will be interesting to watch how Amazon folds this store into its expanding “Prime Pantry”.

 

 

 

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FED Hikes Interest Rates 1/4%

The FED Chair, Janet Yellen, stated that she is “not buying the recent low readings on inflation”.

This Makes the Fourth Time it Has Raised Rates since 2008

The Fed raised Interest Rates today 1/4% or .25 basis points, and represents the third increase in a row. They increased rates despite weak economic indicators as express in weaker than expected job growth and lower than expected retail activity. Inflation fell last month and the core CPI ( Consumer Price Index) rose less than economists had expected.

The FED Chair, Janet Yellen, stated that she is “not buying the recent low readings on inflation”.

The FED also stated that it expects to begin reducing its balance sheet this year.

It is of the opinion of many, including myself,  that the FED will not drastically raise rates for many years to become. The reasoning is that our national debt has grown so large that it would be impossible to service the interest on the debt if interest rates become too high. The bottom line is if you agree with this then you have no long term fear with purchasing “interest rate sensitive’ stocks.

 

General Electric Announces New Division

“A New General Electric (GE) Venture , Avitas Sytems,”

A New General Electric (GE) Venture , Avitas Sytems, will transform inspection services with advanced robotics, data analytics and artificial intelligence according to this mornings Press Release from GE.

One day after the Departure of its CEO Jeff Immelt and the announcement of its new leadership of John Flannery, it new CEO General Electric has made the announcement of it latest venture.

GE’s intent is to revolutionize the process of costly and time consuming inspections which it claims will reduce risks, take less time and reduce costs. It plans to to do this with its new company by utilizing  redictive data analytics, robotics, and artificial intelligence to deliver advanced inspection services to the oil and gas, transportation, and energy industries.

 

Routine inspections can be slow and costly, and often include humans performing high-risk tasks. Data is manually collected and processed, and can take weeks to analyze. By reducing high-risk tasks through robotics, Avitas Systems can make inspection processes safer and more efficient through data automation, decreasing costs by up to 25%. By performing inspections based on anticipated risk, instead of regular time intervals, Avitas Systems can also help to increase asset longevity.

“The inspection services industry requires cutting-edge technologies to help avoid unplanned asset downtime and to deliver new, valuable insights,” said Alex Tepper, Founder and Head of Corporate and Business Development at Avitas Systems. “We will use state-of-the-art robotics, automated defect recognition, and cloud-based technology to give customers the customized service and data they need to advance from reactive to predictive repair.”

Avitas Systems partners with GE Global Research and market leaders in drone and robotics technology to develop ground-based and aerial autonomous and semi-autonomous robots with a wide variety of sensors used to inspect assets. The Avitas Systems solution, built on GE’s Predix platform for the Industrial Internet, analyzes inspection data, integrates regulatory and external data sources, such as weather, identifies defects automatically and recommends optimal inspection and maintenance schedules. The system can fuse data from diverse sources and independently analyze the relationships between them for deeper insights and incorporates user feedback to make defect detection smarter and more accurate.

Customers will be able to access inspection data in real time through an inspection platform that includes customized dashboards and reports. The platform also includes 24/7 live alerts that enable customers to monitor their data from any location.

“Unplanned asset downtime is a top issue for the oil and gas industry, and can cost operators millions of dollars,” said Kishore Sundararajan, Chief Technology Officer of GE Oil & Gas. “Avitas Systems will help enhance the efficiency of inspections, and can help our customers and others avoid significant costs by reducing downtime and increasing safety.”

The new company utilizes aerial inspection technology and systems expertise from GE’s Global Research Center and Oil & Gas business, as well as business incubation leadership from GE Ventures. Avitas Systems leverages expertise from the GE Store, a global exchange of knowledge, technology, and tools that drive innovation and efficient outcomes to service multiple GE businesses and customers.
Avitas Systems is based in Boston, Massachusetts, home of GE’s global headquarters, and draws from deep regional talent pools of robotics, enterprise software, artificial intelligence, and database technology. The company can be found online at http://www.avitas-systems.com/ and @Avitas_Systems on Twitter and LinkedIn.
About Avitas Systems, a GE Venture
Avitas Systems is a GE Venture advancing the inspection services industry across oil and gas,

 

Many Investors have been hoping for years now for General Electric to return with some direction after seemingly wandering the proverbial desert for years now. Could this be the beginning of a new direction under its new leadership? One can only hope!

 

Please share your thoughts and comments below.

 

Jeff Immelt Out at General Electric!

Even its financial divisions were sold off with no return for shareholders

GE Board of Directors replaces Jeff Immelt as CEO!

The General Electric (GE) board of Directors has appointed John Flannery the new CEO, replacing a controversial Jeff Immelt.

Jeff Immelt has overseen the operation of General Electric since Jack Welch left 16 years ago. General electric, a DOW component has done poorly those past 16 years and has never recouped its Dividend or its share price since the financial collapse in 2008.

General Electric was once trading at over $40 per share and now almost ten years later is trading well below $30 per share. This lack of performance along with many controversial moves made by Immelt over the years such as the dumping of many iconic GE divisions, while returning nothing to its shareholders has angered many. Even its financial divisions were sold off with no return for shareholders which angered many shareholders causing the to sell out of the company stock.

JOHN FLANNERY NAMED CHAIRMAN AND CEO OF GE

Jeff Immelt to Remain Chairman of the Board through December 31, 2017
Jeff Bornstein Named Vice Chair of GE; Continues as CFO
Portfolio Transformation Paves Way for New Leadership
GE’s 2017 Framework Remains Unchanged
BOSTON – June 12, 2017 – GE (NYSE: GE) announced today that John Flannery, current President and CEO of GE Healthcare, has been named CEO of the company by the GE Board of Directors effective August 1, 2017 and Chairman and CEO effective January 1, 2018.  Jeff Immelt, Chairman and CEO, will remain Chairman of the Board through his retirement from the company on December 31, 2017.   In addition, Jeff Bornstein, current CFO, has also been promoted to Vice Chair of GE.  Today’s leadership announcements are the result of a succession plan that has been run by the GE Board of Directors since 2011.
Jack Brennan, lead independent director for GE’s Board of Directors, said, “During this time of dynamic global markets and relentless focus on technology and operational excellence, there is no better person to lead GE than John Flannery.  He brings unique experience and a strong skill set to the job.  John has spent almost half of his career living outside of the United States and has led complex financial and industrial businesses all over the world, including running GE Healthcare, GE in India and the business development team for GE through the successful acquisition of Alstom.  John has had a direct influence on the company’s direction, its financial health and its position as the world’s premier digital industrial company.”
 For More information and the complete text of the press release: GE Press Release for New CEO appointment

Retail Is Not Dead – Contrary to Popular Belief!

“The fact is the physical retail experience has become very boring !”

Is Retail Dead ?

Let’s put it this way – Don’t bother going out and buying a suit for the funeral  !

Many retail stocks have been hit hard lately and there is no doubt that many retailers have been struggling lately. But dead? No, far from it. I believe we are witnessing a   shift in the way retailers will do business in the future. Business as usual what not be the way to go and those retailers that cannot adjust will of course disappear. But just because some retailers will not be able to transition and and adapt does not mean all retailers will go under.

In the past few decades retailers have overbuilt. They have too many physical retail locations and shopping centers as a result have become cookie cutter factories. You can go to many fair sized city in the United States and see what looks like carbon copy shopping centers. In fact, I often wonder why bother at all when traveling because the shopping experience is the same every where I go – so why shop when traveling because its not like I will find anything new. And this brings me to another point – They all seem to carry the exact same merchandise and products! What is the point?

The fact is the physical retail experience has become very boring !  This is part of the reason people are choosing to shop online – major retailers have managed to push out the mom and pop shops but they have at the same time made the shopping experience mundane. I get so frustrated now with shopping in stores. As an example I recently took my two teenage children to a Nike shoe store to buy them shoes. We could not find any shoes they liked in both of their sizes and the store seemed to have a very limited selection for their age group. We ended up leaving the store frustrated at the whole experience. Where did they end up buying shoes ? Online of course!

So retail stores have become “cookie cutters” of each other and carry limited stocked items. The retail rental space has become very high on a per square foot basis, Insurance costs have sky rocketed, Employee wages and benefits have also increased and let’s don’t forget the governments hand in their pockets. Add all this to the competition from other retailers , and the online retail communities , which are not only U.S. based any longer but international retailers are now competing as well , and we have one tough environment for retailers.

Many retailers will adapt and overcome these obstacles. In addition many more will thrive. A large retailer closing stores or going out of business will create opportunities for many more. As a result the Shopping Centers and Malls will continue to thrive and service their local communities. That is why I believe that the REITs that service the retail communities are trading at bargain prices right now. As typical with investors, they tend to over react to most situations and sell off stocks with a herd mentality.

Personally I intend to stay away from the direct retailer stocks like Macys , Kohls, JC Penny, Walmart, and all the others as I believe the environment will be risky for the foreseeable future. What I do like is the REITs that own and operate the shopping centers and malls. Most of them operate as triple net plays allowing them to pass on expenses directly to the retailers and one stores demise can open up opportunity for the REITs as they increase the rents for the replacement tenants.

In my opinion now is the time to buy these stocks on sale. I personally have added shares of Whitestone REIT (WSR)  to my holdings and have others in consideration.

Just a few that might be worth taking a look at are :

  • Kimco Realty Corporation (KIM) – 5.71% Yield
  • Whitestone REIT (WSR) – 9.47%
  • Federal Realty Investment Trust (FRT) – 3.13%
  • Tanger Factory Outlet Centers (SKT) – 5.16%
  • Simon Property Group (SPG) – 4.45%

The time to consider stocks is not at the point when the most people are buying but when large numbers of people are panicking and selling.

As always these are not recommendations to purchase stocks. Always do your own due diligence before making investments.

UPDATE: As of this morning (May 16, 2017) the retail REITs index has dropped another one and a half percent making these stocks even more attractive. It’s these type of sell offs that as an investor I really like because it presents even higher yields and even great upside on the equity price.

 

Your thoughts and comments are welcome !

Employers Adding New Benefit

“FutureFuel also allows perspective candidates to connect with companies”

There’s a brand new benefit that some employers are starting to offer and I believe it will be a particularity attractive benefit to Gen-Xers and Millineals.

In a reversal of a trend in recent years to cut or trim employee benefits one company has come with an idea that has employers actually adding a new benefit. So what is this great idea for a new benefit?

It’s the brainchild of a new startup called FutureFuel. What it does is allow employers the ability to recruit top notch employees by offering to pay off their student loans as part of their pay package.

This is how FutureFuel describes themselves from their web site:

FutureFuel.io makes implementation of debt repayment easy. We offer student debt pay down, as a service. Our best-in-breed SaaS platform empowers employers and partners to “turn on” student debt repayment as a new employee benefit — enterprise-wide or for special employee populations. Refinancing and other value-add products are embedded into a contextually-aware, targeted, user experience, prompting financial literacy. Whether utilized as a branded or white label solution, FutureFuel.io serves up an elegant, simple, and intuitive process for all stakeholders.

And – Their Mission Statement:

Mission

FutureFuel.io’s mission is to democratize access to student debt repayment as a new normal in employee benefits. Partnering with the private sector will enable us to eliminate more than $1,500,000,000 in student debt by 2021. This is $1,500,000,000 that we liberate, from debt towards wealth — contributions to 401(k), savings, home ownership and beyond.

Laura Taylor - FutureFuel Founder & CEO
Laura Taylor – FutureFuel Founder & CEO

FutureFuel also allows perspective candidates to connect with companies  by allowing them to post profiles and connect through their website. This is very valuable for those that are still in school to know that they will not only have a job waiting for them but that there will be help in paying off their student debt also. It is a win-win for both the employer and the potential employee.

What a brilliant idea this is and I believe you will see a very rapid adaptation of this benefit with employers, especially for employers engaged in the technological fields.

For more information please visit the FutureFuel Web Site.

 

Thoughts or Comments are always welcome!

 

 

 

 

 

 

 

 

 

 

For more information Please Visit the FutureFuel Website

Straight Path Communications Plunges After AT&T Pulls Out !

“There is no doubt that Verizon is over paying for the company”

Straight Path Communications (STRP)  stock is plunging after the announcement that AT&T (T) is pulling out of the bidding war created by Verizon (VZ). The stock was down over 20% in pre-market trading. Verizon is also trading down this morning on the news,

There is no doubt that Verizon is over paying for the company, It’s $184 per share offer is almost double what AT&T had bid for it ($95.63 per share) and represents a premium of over 400%. In addition Straight Path ( Verizon) will have to pay a substantial break up fee to pull out of the deal. Valuable 5-G spectrum has been the catalyst for the move for StraightPath.

I expect AT&T shares to bounce up this morning on the news. I own shares of AT&T and Verizon, but I have to admit I believe AT&T is the smarter company at this point.

 

Your Thoughts or Comments are welcome!