Hey Snackers,
This plastic surgeon took Zooming-and-multitasking to a whole new level, when he showed up to a Zoom court hearing in the middle of an operation. Botoxic behavior.
Stocks surged to kick off the month after a losing week. The S&P 500 index had its best single-day gain since June, as the rise in Treasury yields stalled, soothing interest rate fears.
Oatly and Beyond Meat snag deals with major restaurant chains (they're hedging)
Like Game of Thrones... but for the plant-based world. Some major alliances have recently formed in the alt-food market. Oatly, the oat milk brand that craft coffee shops brush their teeth with, just snagged one of the highest honors in "mainstreamification": a nationwide rollout at Starbucks.
- DTR: Starbs has been testing Oatly at its stores in the Midwest, and even brought it to 4.3K Chinese locations. With the nationwide rollout, the Swedish oat brand is getting a major validator ahead of its recently announced IPO(at).
On the patty side... Beyond Meat just signed big deals with McDonald’s and Yum Brands, the owner of KFC, Taco Bell, and Pizza Hut. Think: McPlant Burgers for MickeyD's, and plant-protein pizza toppings and alt-chicken for Yum Brands. Beyond has been beefing up its presence: in January, it teamed up with Pepsi for plant protein drinks and snacks. In 2019, it launched a Beyond Sausage breakfast sammie at 9K Dunkin' locations. During the pandemic...
- Restaurant plays didn't really pay off: Beyond's US restaurant sales plunged 43% last quarter from 2019, as you swapped Dunkin' sandwiches for Quaker Oats.
- Grocery plays did: Beyond's US grocery sales popped 76%, as it expanded to more locations (including 2.4K Walmarts). To capitalize on the home life, Beyond offered more affordable patty packs to compete with beef prices.
Beyond is a "double-dip" brand... and Oatly is now following its playbook. There aren't many food brands that you recognize both in the grocery aisle and on the restaurant menu (besides alcohol). With their strong brand recognition, Oatly and Beyond have the power to be both restaurant and grocery staples. They can rely on grocery stores when restaurant sales are down, and vice versa (aka: pandemic/recovery hedge). While Beyond has snagged more partnerships, Oatly is following its lead with this Starbs deal.
Berkshire Hathaway invests a record amount of money... into itself
Could buy a beachside condo... for the price of one Berkshire Hathaway Class A share (~$378K for BRK.A, ~$250 for BRK.B). Warren Buffett's legendary holding company owns businesses like Geico and Dairy Queen, and has major investments in companies like Coke and Amex. Buffett is the OG financial influencer (#finfluencer): for decades, investors have closely followed his moves. Which brings us to...
- Buffett's famous annual letter to shareholders was released Saturday. It earned $42.5B in 2020, including realized and unrealized capital gains from investments. That's about half of what it earned in 2019.
- Back to benchmark: Berkshire compares its stock performance to the S&P 500 index, which is used as a benchmark for the overall market. In 2020, the S&P 500 rose ~16% — Berkshire shares rose ~2%.
Playing it safe(r)... Berkshire has ~$138B in cash, but it didn't make any major acquisitions in 2020. It took big stakes in Chevron and Verizon, but stayed away from the blockbuster deals that made it famous. Instead, Berkshire bought back a record ~$25B of its own shares last year. Stock buybacks are kind of like presents to shareholders. By reabsorbing their own shares, companies can improve their stock prices by reducing the number of available shares — and increasing shareholders' ownership.
Buffett invests in what he knows... and he doesn't really know software and high tech. Rule #5 of Berkshire's acquisition criteria: it invests in "simple businesses (if there's lots of technology, we won't understand it)." Berkshire does have a giant stake in Apple, and took a small(er) $735M stake in cloud company Snowflake last year. But for the most part, it has stayed away from tech. Unfortunately for Buffett, Big Tech stocks currently dominate the overall market — and they rallied big in 2020. The tech-heavy Nasdaq index soared 43% last year, compared to BRK's ~2% gain.
What else we’re Snackin’
- Vax: Johnson & Johnson started shipping ~4M doses of its newly authorized one-shot Covid vaccine across the US.
- Stim: The $1.9T stimulus bill is now in the hands of the Senate, which plans to drop the $15/hour minimum wage proposal.
- Unmute: Zoom shares popped 10% after it revealed that sales nearly 5X'd last quarter from 2019 (can't imagine why).
- Bold: Citi says Bitcoin is at a “tipping point” and could one day “become the currency of choice for international trade.”
- Unity: President Biden supported thousands of Amazon warehouse workers who are pushing to unionionize.
- Sweat: Tonal, a company that sells $3K wall-mounted workout stations, is opening mini shops in 40 Nordstrom locations.
Tuesday
- Earnings expected from Target, Lemonade, Nordstrom, Ross, and Kohl's
Authors of this Snacks own shares of: Starbucks, Amazon, and Apple
ID: 1545418