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Fall 2017

The Walt Disney Company

In lieu of the recent hurricanes that have heavily affected Florida, and the airline industry, Disneyland has suffered a decline in park attendance. While this is certainly a detriment, September is “low season” for Disneyland anyways.

 

Disney’s ESPN has had a significant subscribership decline over the past six years. Disney shares have fallen 5.5% in 2017 whereas the S&P 500 has risen 11.5% during the same period. ESPN also had the second worst ratings for its centerpiece show, Monday Night Football, during the 2016 football season. This has significantly hurt the Disney stock. In order to combat this, Disney is negotiating with Altice, the fourth largest US cable TV company, about renewal of carriage of broadcasters ABC and ESPN.


Fall 2017

Under Armour Inc.

Wells Fargo recently downgraded its rating of Under Armour stock, as a result of its poor performance, to “market underperformer.” Many sports clothes retailers, such as Sports authority, have declared bankruptcies in the past year and this phenomenon has greatly contributed to the Under Armour’s decline. Under Armour is not the only athletic wear company to have been hit, Nike, Lululemon, and other big names have had a decline in performance recently because of the lack of innovation across the board in sports clothing. Consumer trends and moving towards “athleisure” whereas Under Armour’s specialty has been performance wear. 

 

In response, the company has announced plans to cater more towards the “athleisure” look, increase international sales, and has opened a new, massive facility in Portland to create and test footwear products and ultimately help foster innovation. Under Armour is partnering with rapper A$AP Rocky to design this new athleisure line. The CEO has affirmed that overall the history of Under Armour’s performance has been strong and that this is just a temporary respite. 


Fall 2017

Time Warner Inc.

Time Warner has had a huge recent success with the box office hit, It. It is set to accrue about 400 million, a record for a horror movie and for any movie in September, usually a slow month for movie sales.

 

Time Warner has recently been acquired by AT&T, this merger bodes well for both companies and it has been made clear that AT&T plans to use Time Warner television properties to create wifi and video bundles for its customers. This move will push both AT&T products and Time Warner. 


Fall 2017

Southwest Airlines Co.

Hurricane Harvey had somewhere between a 40 and 60 million dollar cost to Southwest Airlines, while the cost for Hurricane Irma and Maria is still undetermined but assumed to be of the same magnitude.

In other news, Southwest plans on expanding its flights to Hawaii, a notable sign of growth. This movement will shut out competition from the successful but high-priced Hawaii Airlines, which hints that Southwest will soon have its own share of this profitable market.

 

Southwest was recently lauded by a JP Morgan analyst as a “safest airline investment,” a blow to competitors such as American Airlines. The analyst increased the price target for Southwest.


Fall 2017

Sony Corporation

Sony has recently embarked on a project to capitalize on the unclaimed royalties of all the remixed music flooding the market nowadays. Sony owns rights for many popular artists and song catalogues and partnered with a New York start up, Dubset, to create a software that will recognize usage of the original song to attribute royalties to the usage.

Sony conglomerate, Activision, also released a new version of their popular game Destiny 2 recently. Although expected to be a hit, the game has had many glitches in its software that take away from the user experience.

 

Sony also changed leadership recently, with the promotion of John Kodera, formerly the division’s deputy president, to CEO of Sony Interactive Entertainment. He is expected to bring a new, progressive, and innovative direction to Sony. 


Fall 2017

Sirius XM Holdings Inc.

Sirius stock is currently on an 11 year high. It recently acquired Pandora for below its value and has grown its subscriber base over 700% over the last ten years. Another noteworthy upcoming project is its partnership with the NFL to live broadcast and commentate the 2017 NFL season. The commentators will be former NFL players themselves; Sirius even plans to add several Spanish language channels to its NFL package.

 

Other happenings for Sirius include the arrival of a new Head of Advertising Sales, Mike Connolly, from ESPN. Sirius is excited for the introduction of an executive that has so much experience in the audio entertainment industry and sees Connolly as another step towards expanding programming variety. 


Fall 2017

The Gap, Inc.

Two Wall-street firms have endorsed The Gap in the past month, being Jeffries and Credit Suisse. Jeffries declared that The Gap is a “mispriced asset” (undervalued) and was declared one of their “Franchise Picks.” Credit Suisse changed their classification of The Gap from an “underperform” to a “neutral” and increased their price target on Gap stock.

 

The reason behind these acknowledgments has been Gap’s ability to adapt to the decline of the name brands shopping mall model for online and small-name brands. Old Navy and Athletica have appealed to this new retail market and are thriving. Gap has re-strategized its operations to scale down on its old-name brands The Gap and Banana Republic, and prioritize its growing brands. 


Fall 2017

Ford Motor Company

The Ford stock has had some mixed performance recently, with some plants closing, others opening, and others underperforming. Ford announced formally that it will partner with the Indian firm, Mahindra Group, for a trial period of three years to strengthen their position in the Indian market. The Indian auto industry is worth $30 billion, and with a worker base of 14,000 in its Indian factories, Ford is in a prime positon to capitalize on this market.

 

On a less promising note, Ford has announced production cuts for five of its North American plants. This move is a response to inventory buildups of several models and is an attempt to diminish the stock to a normal level. Ford’s sales in China have also disappointed, as they failed to meet sales projections by 1%. Despite this performance, their EcoSport car model has had a 43% increase in sales in August 2017 so Ford plans to adjust their production to focus more or the successful models. 


Fall 2017

Facebook Inc.

The FB stock has been performing well both over the last year and since its release. This past month FB messenger has even reached the milestone of 1.3 billion monthly users, which puts it on par the default messaging app of the international market, Whatsapp. Facebook has also announced a new research endeavor, an artificial intelligence lab to be built in Montreal. This development marks their fourth AI lab and first to be built in Canada, a sign of investment in both the future of artificial intelligence and the Canadian market.

 

Facebook has been the subject of some scrutiny as it was recently revealed that that their advertisement placement algorithms were allowing hate groups to specifically target anti-Semitic users. This scandal comes shortly after the discovery that Facebook allowed $100,00 worth of ads from Russian sources to publish fake news during the 2016 election. This negative publicity could affect the Facebook stock


Fall 2017

Electronic Arts Inc. (EA)

 

Electronic Arts has been busy preparing the for release of many new video games in 2017/2018, highlights being NBA Live 18 and Madden 18. EA is also partnering with the NFL to create Madden Championship series, an esports tournament for EA’s franchise Madden NFL. EA also is coming out with updates in graphics, technology, and new player modes designed to increase audience and “hype.”


Fall 2017

The Coca Cola Company(KO)

The Coca Cola Company has been on a steady dividend increase for the past 55 weeks. However; the sugary drink industry as a whole has had a decline in soda sales every year for the past 12 years due to the public’s growing enthusiasm for health-conscious choices. Unless Coca-Cola can generate more profit in a market hostile to sugary-drinks, it will not be able to sustain the demanded increases in dividends

 

To create this revenue KO has been active with the following projects: it just partnered with McDonalds to create a Coca-Cola brand ready-to-drink coffee line which will be offered on the menu at McDonalds next year. This collaboration comes shortly after another similar success: Dunkin Donuts and KO combined forces to create a line of bottled ice coffee drinks for supermarkets and other stores. Coca-Cola is also closer than ever to acquiring energy drink company Monster. It now holds 16.7% stake in Monster. This move would be a victory over its competitor PepsiCo. 


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