David Fuller and Eoin Treacy's Comment of the Day
Category - Autonomies

    Virtual Reality Is Not Just About Games: Nongaming applications sneak up on an unsuspecting public

    This article by Christopher Mims for the Wall Street Journal may be of interest to subscribers. Here is a section: 

    Imagine a version of Google Maps that doesn’t end at the front door of buildings, or an Instagram consisting of immersive experiences rather than snapshots.

    “Immersive 3-D content is the obvious next thing after video,” Facebook CEO Mark Zuckerberg said during a recent earnings call.

    All of this is possible because, like the PC and the smartphone, virtual reality isn’t so much a single technology as the happy coincidence of a bunch of related ones. Motion tracking, 3-D capture, ultra-high-resolution displays, fast graphics chips and a deep library of 3-D software developed for games and other applications are coming together at just the right time. Google, Facebook, Sony, HTC, Microsoft and countless smaller competitors have already made public their plans for VR, and given its hiring and patents in the area, it’s likely Apple is working on it too.

    VR is a technology that is truly in its infancy, despite decades of work in academia, industry and the military. Rapid progress in frame rates, displays, interfaces and more realistic rendering are already in everyone’s development pipeline.

    “Keep in mind, this is just the Atari 2600 of VR,” says Cymatic Bruce, head of developer relations at Altspace VR, as he helps me take off a bulky headset I wore to experiment inside the company’s VR play space.

     

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    Diageo Expects Return to Sales Growth After Two-Year Slump

    This article by Thomas Buckley for Bloomberg may be of interest to subscribers. Here is a section:

    The outlook reflects the prospect of stronger growth in selling volumes in the 12 months through June 2016, Chief Executive Officer Ivan Menezes said in a statement Thursday. He forecast “mid-single-digit” organic sales growth in the following financial years and a 1 percentage-point improvement in the operating margin within three years.

    The guidance is “conservative and undemanding,” said Eddy Hargreaves, an analyst at Canaccord Genuity in London. “It’s below what we already have in our model and it’s a positive that they have reinstated guidance.”

    As he starts his third year as CEO, Menezes has tried to gain more control over his sprawling liquor empire and restore sales growth after a two-year slump. He’s bought out India’s United Spirits Ltd., taken full ownership of Don Julio tequila and dissolved a South African joint venture. Diageo is also shifting to a model focused on purchases by consumers, rather than the amount of bottles it ships to distributors.

     

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    New Japanese hotel has robot staff and no room keys

    This article by Stu Roberts for GizMag may be of interest to subscribers. Here is a section: 

    Robots are deployed at the front desk to help guests check-in and out. According to the Henn-na Hotel, it's possible to hold a conversation with the "warm" and "friendly" robots while they get on with their work. Alternatively, self-service check-in and check-out eliminates the need to go to the front desk or to wait in line.

    There are porter robots employed to carry luggage to and from rooms, and cleaning robots employed to keep the hotel spotless of their own accord. There is also a robot employed in the cloak room. Objects up to the size of small bags can be handed over and the robot will put them away in secure lockers. When the belongings are needed, the robot will locate them in the correct locker and hand them back to the guest.

     

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    Email of the day on the Autonomies and valuations

    I have been looking at the charts for the global autonomies recently and have a question about your approach. Specifically, how much do you take market valuation (PE ratio) for a share into account when you buy / sell? I have read your book (twice, it is excellent by the way), so I understand your overall approach, but do you ever decide not to buy a share that has a great story / chart, but a very high valuation as well? Salesforce.com is a good example: nice story, nice chart, astronomic PE. Or Nike: nice story, nice chart, pretty high PE. By the way, I ask this question as an unleveraged investor, not a trader. Thanks.

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    The Five Things Wall Street Wants From the New CFO at Google

    This article by Brian Womack for Bloomberg may be of interest to subscribers. Here is a section: 

    “Most people aren’t expecting an official number, but they just want to see her talk about it -- that she’s focused on it,” said Robert Peck, an analyst with Suntrust Robinson Humphrey Inc. “It’s not that investors don’t necessarily want spending -- it’s investors want to know it’s being prudently done.”

    Pichette had been talking up efforts to be careful with spending, pointing out the company pulled back on underperforming projects such as Google Glass. While operating expenses climbed 21 percent to $6.46 billion in the first quarter, it was less than the increases of more than 30 percent in the previous two periods.

    The rate of hiring has slowed as well the past two quarters, even as the total workforce remains at more than 55,000 employees.

    Unit Detail
    Investors want more transparency around how much each business delivers to the company.

    Porat could give more sales numbers around business units such as the video-sharing service YouTube, display advertising, mobile and Google Play, the digital store for buying applications and entertainment content, analysts said. She also could give specifics on the core business: search.

    Analysts cited Amazon.com Inc.’s decision earlier this year to break out for the first time how much it makes in its cloud-computing business.

    “Here is an easy opportunity for a new CFO to establish a fresh, constructive approach toward the market,” RBC Capital Markets analysts wrote in a note to clients earlier this month.

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    Starbucks to Enter Sub-Saharan Africa With Taste Coffee Deal

    This article by Janice Kew and Christopher Spillane for Bloomberg may be of interest to subscribers. Here is a section: 

    “Starbucks is very excited to sell coffee for the first time in some of the same places in Africa where it sources it,” Gonzaga said in an interview. “It’s very important to figure out how to make the stores locally relevant, and Starbucks has excelled at this in other regions.”

    Taste shares rose 20 percent to 5 rand in Johannesburg, the biggest gain since June 2011. That values the company at about 1.5 billion rand ($120 million). Starbucks’ stock was little changed in New York, trading at $55.56 as of 10 a.m.

    Restaurant chains, retailers and consumer-goods companies are expanding in sub-Saharan Africa, where the number of middle-class households -- those consuming $15 to $115 a day -- is expected to grow to 40 million by 2030 from 15 million now, according to Johannesburg-based Standard Bank Group Ltd. Yum! Brands Inc.’s Pizza Hut returned to South Africa last year after a seven-year absence to compete with Domino’s Pizza, which is operated locally by Taste Holdings.

     

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    Uniqlo Parent Forecasts Slower Japan Sales on Cool Summer

    This article by Monami Yui for Bloomberg may be of interest to subscribers. Here is a section: 

    Same-store sales in Japan dipped 12 percent in June as the cooler weather curbed demand for summer clothes, the company said earlier this month.

    Net income surged 36 percent in the three months ended May to 27.6 billion yen, based on nine-month figures the company released Thursday in Tokyo. Sales gained 23 percent to 398.4 billion yen in the quarter.

    Investors have bet billionaire Tadashi Yanai’s clothing retailer, which offers basic designs made with advanced materials at low prices, will grow by exporting its model to faster-growing markets like China and the U.S.

    The shares trade at about 41 times projected earnings, compared with about 31 times for Inditex, which sells Zara casual clothes and is Uniqlo’s bigger global rival and 24 times for Hennes & Mauritz AB, which retails the H&M brand.

     

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    Email of the day on mining shares:

    Anglo-American, BHP and RTZ all seem to be breaking below the bases of their ranging zones. Commonalty. The dividend yields look attractive. Buy or sell?

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    Coty Agrees to Buy P&G Beauty Brands for $12.5 Billion

    This article by Kevin Orland for Bloomberg may be of interest to subscribers. Here is a section: 

    Coty Inc. agreed to buy 43 of Procter & Gamble Co.’s beauty brands for about $12.5 billion in a deal that would more than double its sales and transform it into one of the world’s largest cosmetics companies.

    The transaction will be conducted as a Reverse Morris Trust, meaning P&G will spin or split off the business, which will then merge with a Coty subsidiary, the companies said in statements Thursday. The arrangement is meant to reduce taxes for the companies’ shareholders.

    The acquisition will add Hugo Boss and Gucci to Coty’s fragrances offerings and CoverGirl and Max Factor to its cosmetics portfolio. The deal also brings Coty into the hair-color business with P&G’s Wella and Clairol brands. All told, the combined businesses have annual revenue of more than $10 billion, compared with $4.55 billion for Coty in its most recent fiscal year.

     

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    Carnival aims to launch Miami to Cuba cruises in May

    This article from Fox News may be of interest to subscribers. Here is a section: 

    The world's largest cruise company could be heading to Cuba.

    Starting in May, Carnival Corp. plans to offer trips from Miami to the Caribbean island nation, the company announced Tuesday. Carnival says it would become the first American cruise company to visit Cuba since the 1960 trade embargo. The trips will be through its new brand, fathom, which focuses on trips where passengers sail to a destination in order to volunteer there.

    "This is an important first step for our company and the cruise industry," CEO Arnold Donald told The Associated Press in an email. "It begins our efforts to shape a long sustained industry experience in Cuba."

    The weeklong cruises will be aboard the Adonia, which carries 710 passengers. The ship is relatively small for the industry; ships sailing under the company's namesake line carry nearly 3,000 passengers.

    Carnival is expecting high demand for the voyages and has priced them accordingly. Prices start at $2,990 per person plus taxes and port fees. A similar service-oriented trip on the same ship to the Dominican Republic starts at $1,540 per person.

     

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