The twitterverse thought Ryan Seacrest was on with Kelly Evans today but it was just me. Kelly even mentioned it at the end of the interview. I like that better than the usual "you look like Timothy Olyphant."
All kidding aside, remember that while I’m speaking about a specific name, my whole point is about how to approach any company or market and these are just examples of the type of stuff you see. My clients and I prefer index funds and keeping it simple. But the idea of cost cutting, the bottoming of earnings estimates, and where growth will come from never goes out of style.
First on the list was McCormicks - you like Franks's RedHot sauce or Cholula? They make that along with spices you find at the grocery store. The key to any staple like this going into a recession is if they can pass along costs to consumers and continue to cut humans for automation. They are attempting both.
Next up was Walgreens. In short, it's not for me. The firm needs to decide what to do with the dog we call Boots (drug store in the UK), and growing its primary care segment - which could be huge, but it's not big enough to really move the needle. Plus, the Covid gravy train has ended - so no more easy revenue from testing.
Last is Lulu Lemon. Expensive yoga pants going into a recession? Sure. It's a premium retailer with strong numbers similar to Nike. While a premium retailer like LULU always trades at a rich valuation - I would rather see how earnings shake out, and if you can get management to guide down margins enough to bring the price down. Of course, everybody already knows this and expects that news. How the market will react is simply unknown. I would take a pass and see how the year goes.Show less