Kategori: Genel

Petrol fiyatları daha uzun yıllar bu seviyelerde kalabilir…

Online advertising market is huge but growing slower compared to last ten years. Good news for the players in this market is that  #penetration rate of online advertising market is estimated to be around 15% now, which seems too low as we are exposed to very high penetration of global and large local brands over internet. However if you consider small and medium-sized business with good customer equity and check how much you are exposed to their advertising over internet, this penetration level becomes more reasonable. Ad #platforms have recently introduced in-app shopping versus clicking out (to merchant’s app / website). Facebook Shops and Instagram Shopping (2020), Ads on Instagram Shops (2021) are all expected to increase conversion rates, resulting in the increase in value of ad inventory. E-commerce operators are also bringing advertising solutions such as Amazon’s Sponsored Products or ebay’s Promoted Listings. #Automation of campaign management and generation of creatives will possibly give SMBs access to tools that larger advertisers could afford now. #Google, for instance, is trying hard to help advertisers in terms of media planning and ad copy creation. It just rolled out Ads Creative Studio tool to create customized ads based on uploaded assets. The company “want to make it easier for media and creative teams to work together and at the same speed“. Such tools might help not only larger advertisers and ad agencies but also -more importantly- SMBs that can not afford to hire an ad agency. Automation of advertising could be a next #gamechanger for #onlineadvertising, #adagencies, #broadcasters and SMBs. Investors of ad platforms and management of media and advertising agencies are better to keep a close eye on this trend.

I read Jamie Dimon (CEO of JPMorgan) emphasizing the benefits of organic growth at the expense of M&A:

“ Companies talk about acquisitions like that is what is going to save them. It’s not. What is going to save us is organic growth. Better products, better services, better bankers, better technology, hiring and training better people. Organic growth is harder and better than acquisitions. Most companies don’t do it because growing a sales force is hard. Opening branches is hard. Most people come up with a million reasons why they don’t do it.”

Hope investment banking division of JP and their clients will not hear this : ))

My view: When it comes to shareholder value creation, organic growth is a great way to deliver provide that the return marginal sales is high compared to the cost of marginal capital needed to fund the growth. However, bolt-on acquisitions also do create great deal of value if the targeting, valuation, transaction and integration is executed in the right way.

Instance? Look at the deals #Sika and #SaintGobain has been closing each year.

Quality of the asset is of significance when it comes to #valueinvesting. Under a cloudy sky, it is even more so. #SBUX is one of those names in consumer universe that I feel the need to follow closely.

What makes #SBUX a quality asset?

The question that should be asked in the boards of all consumer/restaurant players around the world I believe.

A couple of elements relevant to #SBUX through my lens:

> Managing expectations of its own people well. “Because if we want to exceed the expectations of the customers, we have to exceed the expectations of our people” (Schulz explaining further increases in wages beign “ahead of the curve” at discussion of F2Q22 results)

> Ensuring customer continuity. Hugely successful Rewards programme which currently has 27.4Mn members in the US! By F3Q22, the spend by rewards members is at record levels. %58 of revenues come from Rewards members which showes huge #brandloyalty, which is challenging to create in restaurants/ food retail universe. What I like (for cash flow yield) in the Members program is the following: Customers #prepaid $11Bn of their purchases in 2021!

> Cash-on-cash returns (what a shareholder could like to see more?). It is around 70% at F3Q22. ROIC being 101%.

Going through F3Q22 numbers, one should note that US SSS of 9% is not a great performance compared to its universe where +15% is average topline growth in the same quarter. However, I liked the shift to cold beverages (75% of the beverages) which is difficult to replicate at home and higher partner engagement scores which has a track record of converging into SSS.