Stifel’s Unconventional Stock Picks

A photo of someone pointing at a stock market chart.

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Stifel has made several suggestions lately in terms of recommended buys on the stock market. Blue Apron, Snap, and Six Flags have made the cut. Some of these suggestions, particularly Snap and Six Flags, seem counterintuitive, given the current state of their stocks. However, Stifel’s many years of expertise suggests their advice may very well be worth following.

Stifel Financial, founded in 1890, has showed off its financial prowess for over 100 years. Its subsidiaries include Stifel Nicolaus, a full-service retail and institutional brokerage and investment banking firm; Thomas Weisel Partners, an investment banking firm originally started by Silicon Valley banking legend Thom Weisel (also known for founding Montgomery Services); and Stifel Bank & Trust, a retail and commercial bank.

So while Stifel’s latest stock market suggestions may seem to go against conventional wisdom, they’re being made from a place of solid expertise.

Six Flags Entertainment (SIX)

Though Six Flags Entertainment is down 1% so far this year, Stifel’s Steven Wieczynski and Brad Boyer argue that it’s still a stock worth owning. They acknowledge that the company’s second quarter report could “modestly underperform;” however, they note that this is likely because of seasonal issues that are easily resolved.

“On the whole, we sense investors are using recent data points, notably credit card transaction data, to reach conclusions that, in our view, are wholly unfounded,” they note.

Snap (SNAP)

Similarly, Stifel recommends Snap, despite the fact that shares are trading below their $17 IPO price. The trouble, according to Stifel, is that investors are unclear on the possible growth opportunities.

“In our view, Snap is what investors have long wanted (and many still want) Twitter to be: a thriving communications platform for hundreds of millions of high value consumers…that can drive engagement/monetization in the face of competition from internet behemoths like Google, Facebook, and Amazon,” wrote Stifel analyst Scott Devitt.

According to Devitt, users routinely spend more than 30 minutes a day on Snap and send more than 3 billion snaps a day, indicating high engagement.

Blue Apron (APRN)

Though its shares have fallen 30% month-to-date, Stifel has rated the stock “buy” in their research report, released July 24. Though they face a difficult competitor in Amazon, Blue Apron shares surged 11% this week after several financial experts suggested a positive future for the company. According to Stifel, the threat from Amazon is “perhaps overstated.” They estimate that Blue Apron will reach more than 2.6 million customers by 2021, with the average customer ordering at least 12 times a year. That suggests that getting in on the stock now, when its cost is lower, could lead to extremely positive results in the future.

Time will tell if Stifel’s advice proves fruitful. However, given the analysts’ track record, not to mention the many years of experience in the company, investors are likely to make bank if they take note.

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Michael Kors to Acquire Jimmy Choo for $1.2 Billion

The exterior of a Jimmy Choo store.

Photo credit: Ritu Manoj Jethani / Shutterstock

Michael Kors is buying high-end shoe designer Jimmy Choo for $1.2 billion in cash.

“We are pleased to announce the acquisition of Jimmy Choo, an iconic brand with a rich history as a leading global luxury house,” Michael Kors CEO John Idol said in a statement. “Jimmy Choo is known worldwide for its glamorous and fashion-forward footwear. The company is a leader in setting fashion trends. Its innovative designs and exceptional craftsmanship resonate with trendsetters globally. We believe that Jimmy Choo is poised for meaningful growth in the future and our company is committed to supporting the strong brand equity that Jimmy Choo has built over the last 20 years.”

Jimmy Choo shares rose more than 17% in London as soon as the news broke. 

This move will certainly help Michael Kors, whose middle-market clientele has been wavering in support, get a much needed boost in sales. Michael Kors is one of many companies that relies on department stores and outlet malls for the bulk of its sales while battling it out with the “fast-fashion” brands (such as H&M, Forever 21, and Uniqlo) and losing every time. However, luxury brands like Jimmy Choo aren’t feeling the effects from the tightening of purse strings. High-end fashion is still doing well among its clientele.

This consolidation will help Michael Kors expand its product lines as well as improve sales globally, especially in Asia.

Jimmy Choo is well known amongst “Sex and the City” fans, where the fashion company first became a national name. Since then, Jimmy Choo has kept its momentum with a surge in customer base and sales. A pair of pumps from the retailer could cost upwards of $1,000. On the flip side, you can get a Michael Kors bag for $70-100.

The new deal is expected to expand Michael Kors’ consumer base and increase international sales.

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Watch Out Uber; Car2Go Wants a Slice of the Ride Sharing Market

A photo of a Smart Car with a Car2Go logo painted on the front of it.

Photo credit: AR Pictures / Shutterstock

As car ownership continues to decline among Millennials, it’s creating a booming market for companies in the ride sharing business. That’s because despite not owning a vehicle, young people still need to get around town—it’s just that the way they get around town is changing.

Rather than spend thousands of dollars on a car, Millennials are opting for cheaper modes of transportation such as public transit and Uber. But there’s a newcomer to the playing field, and it’s slowly increasing its share of the market.

Car2Go, a German company founded in 2008, is definitely worth keeping an eye on. It’s already breached international waters, with services being offered throughout Europe and North America.

So what’s the appeal of using Car2Go as opposed to other ride sharing services like Uber or Lyft?

Perhaps the biggest perk is that it allows the costumer to do the driving. In fact, Car2Go is being described as a car sharing service as opposed to a ride sharing service like Uber and Lyft. That’s the key differentiator.

But there’s another neat factor: Car2Go vehicles are located throughout large metropolitan areas. Using the Car2Go app, all the customer needs to do is jump in and drive to their destination. Returning the car to its original location is not required.

Another cool perk? The customer never has to refuel the car.

Pricing is charged on a per-minute/per-hour basis. There’s also a one-time sign-up fee along with a $1 insurance fee for the first 91 rides.

So exactly how popular is the service? According to Market Watch, Car2Go trips increased by 21% from 2015 to 2016. What’s more is that memberships have risen by 43% to 2.2 million.

What this data shows is that the popularity of car sharing services is only going to increase as time goes on. That’s why it’s a good investment for those looking to capitalize on the ride sharing/car sharing market.

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Scalise Shooting Repercussions Ramp Up

A photo of congressman Steve Scalise.

Congressman Steve Scalise.
Photo courtesy of Gage Skidmore at Flickr Creative Commons.

The drama around the shooting of four Republican congressmen in Alexandria last month, including Louisiana Representative Steve Scalise, continues. Scalise, who was the most seriously injured of the victims, recently returned to the hospital for more surgery—he’d already undergone several surgeries just after the injury. Meanwhile, conservative talk show host Bob Romanik took credit for inspiring the shooter, while Republican lawmakers, in a post-gun-violence twist, are actually advocating for less gun control rather than more.

When the shooting took place in June, Miami lawyer Kendall Coffey noted that the laws relevant to this kind of incident, particularly a provision called Section 351, make it a federal crime to kill or attempt to kill or assault a member of Congress. Section 351 went into effect after the murder of Congresswoman Gabrielle Giffords in Arizona in 2011.

The law hasn’t calmed down any anti-Republican threats, however. Just this week a protestor was arrested after making an incendiary statement to Republican staffers that liberals would “solve the Republican problem” by “get[ting] better aim,” adding that “that last guy tried, but he needed better aim. We will get better aim.”

Over in the hometown of Scalise shooter James T. Hodgkinson, the “Grim Reaper of Radio,” Bob Romanik, actually took credit for inspiring Hodgkinson’s attack, despite the fact that Hodgkinson was a Democrat and Romanik is a conservative Republican and supporter of President Trump.

“I can’t say for sure if this Hodgkinson guy listened to me, but he probably did,” Romanik said in an interview. “If people would be honest about what drove Hodgkinson to the point of violence, you’d probably see a lot of people right on the same page with him all over the country.”

Romanik, known for lacing his diatribes with racist and homophobic slurs, inspires a frenzied hatred of all politicians in his listeners, so it’s not surprising that he would cross political party lines to support someone who perpetrated violence against several members of Congress.

Normally after a shooting event like this, lawmakers scramble to put more gun control efforts into place in hopes of preventing more violence. In this case, however, three new bills have been introduced in the House that would allow lawmakers to carry concealed weapons. Other recent bills involve concealed carry permits being allowed in Washington, D.C. and eliminating federal controls on silencers.

“I think what happened in Alexandria sharpened people’s resolve to make sure this right is protected,” said Representative Richard Hudson of North Carolina.

Democrats, however, aren’t likely to fall in line.

“Washington, D.C. is the last place you want to condone or allow concealed-carry weapons,” Representative Eleanor Holmes Norton said. “It says everything about my colleagues that they would use the occasion of a tragedy on one of our members to come forward the day after with one of these bills.”

Representative Joe Crowley of New York agreed with the Republican sentiment that congressional safety needs to be reevaluated. However, he did not agree that arming his fellow congressmen and women was a good idea.

“It makes it very difficult to slide into second base when you have a pistol on your side,” he said.

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Chinese Humanitarian Liu Xiaobo Dies

A picture of Liu Xiaobo with the words, "The face of Chinese democracy" written beside him.

Photo courtesy of Democracy Chronicles at Flickr Creative Commons.

Liu Xiaobo, China’s most prominent human rights activist, passed away today at the age of 61. Liu Xiaobo, a recipient of the Nobel Peace Prize, was diagnosed with late-stage liver cancer in May 2017. His cause of death appears to be a result of the disease.

Xiaobo was a writer, literary critic, and professor. He later became a human rights activist. He made a name for himself in 1989 when he became a key leader in the Tiananmen Square protests.

“As a survivor of the Tiananmen Square democracy movement, I feel I have a duty to uphold justice for those who died in that event,” Liu Xiaobo once said in a video interview.

Due to his involvement with the protests, Liu Xiaobo was arrested and expelled from Beijing Normal University, where he once taught literature. The Chinese government also banned his work. He was convicted of “counter-revolutionary propaganda and incitement” nearly two years later.

Liu Xiaobo was an outspoken critic of China’s communist rule and was vehemently opposed to Confucianism. He believed in the Western principles of democracy, which put him at odds with traditional Chinese values. Here’s one of his most famous quotes:

I look forward to (the day) when my country is a land with freedom of expression, where the speech of every citizen will be treated equally well; where different values, ideas, beliefs, and political views … can both compete with each other and peacefully coexist; where both majority and minority views will be equally guaranteed, and where the political views that differ from those currently in power, in particular, will be fully respected and protected; where all political views will spread out under the sun for people to choose from, where every citizen can state political views without fear, and where no one can under any circumstances suffer political persecution for voicing divergent political views. I hope that I will be the last victim of China’s endless literary inquisitions and that from now on no one will be incriminated because of speech.

Liu Xiaobo died while in Chinese custody. He was serving an 11-year prison sentence for actively supporting a pro-democracy manifesto titled “Charter 08.”

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