Carnegie Market Blog

 

Big Data in Ohio and Energy Divergence

Posted by Brent Luce on Aug 24, 2017 4:15:00 PM

Energy Stock Divergence

The energy sector has been weak all year, and is now down about 17% year-to-date.  As one would expect, energy stocks generally move with the underlying price in oil.  Recently, this relationship has diverged.  Since June, oil has recovered from $42 to $48 a barrel.  Meanwhile, energy stocks have continued to fall to new lows. To me, this reflects a somewhat bearish sentiment in these stocks as investors have given up on them and pursued other opportunities.  The lower prices have, of course, driven up dividend yields.  Exxon Mobil, for example, is now paying a 4% dividend yield, which is at the high end of its 20-year range.  Divergences like this usually correct themselves, so it will be interesting to see how this plays out.  WATCH:  Time To Buy Energy Stocks? 

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Topics: Retail, Big Data, Amazon.com, $FL, Energy Stocks, $BA

Tons of Pigs, Data and Boxes

Posted by Brent Luce on Jun 7, 2017 4:41:37 PM

Factoid

Each year, the people of China consume 600 million pigs and that number grows every year.  While this may seem random, there are interesting demographic forces and investment implications behind this factoid.  MORE:  Expanding Chinese Pig Production is no Black Swan

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Topics: Real Estate, Big Data, Amazon.com, Parcels, Pigs, Mexico

Retail Is Struggling Financially - Current Inflation Numbers are Out

Posted by Brent Luce on May 12, 2017 3:02:33 PM

Retail Death Spiral

If you have not noticed, brick-and-mortar retailers have not been doing so well.  Value investors who have been trying to “bottom-fish” in the space have continued to suffer.  As we know, Amazon and other companies using and benefiting from new technologies have been perhaps the most disruptive force ever to affect consumer buying behavior.  As I have mentioned before, we seem to be arriving at the breaking point where the weak can no longer fight the battle.  This is just one example of how new technologies are changing the way we live and affecting every business and sector.  When looking at investments, I think there are two types of companies – those poised to benefit from these disruptive forces and those who are likely to suffer from it.  The table below, which I am borrowing from MKM, shows the number of store closings announced just this year – this is just major stores, and does not include the hordes of smaller retail stores that have closed.  Amazon has been taking over fifty cents of every new dollar moving into retail e-commerce, so we can guess that 50% of these sales are going right into Amazon’s pocket.    At the bottom you will see the stock price charts of traditional retailers versus Amazon; it is self-explanatory.  Deep Dive:  The New Retail Ecosystem

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Topics: Inflation, $AMZN, Big Data, Amazon.com, Technology, Retail Distribution

Domino’s Pizza Finances are Rising and Consumer Credit is Better than Ever

Posted by Brent Luce on Mar 1, 2017 4:35:02 PM

Big Data Factoid

As we know, the amount of data we are creating is growing exponentially.  It is estimated that as much data has been created in the past two years than in the entire history of mankind before that.  What you probably did not know, is that only 10% of that information is publicly accessible.  According to IBM, 90% of data resides behind firewalls, just waiting to be accessed and analyzed by advanced technologies to create new insights.  MORE:  IBM Wants to Bring Machine Learning to the Mainframe

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Topics: Consumer Credit, $DPZ, $TGT, Lumber, Big Data

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