Starbucks Betting on $10 Coffee; Trump Ready to Dump on Pharmaceuticals; Trump’s June Stock Dump

Jolted…

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Image courtesy of Simon Howden/FreeDigitalPhotos.net

Starbucks CEO Howard Schultz is stepping down from his post in April with plans to build a Starbucks’ prestige brand where he will serve as its Executive Chairman. The idea is that by going upscale Starbucks will be able to raise its profile with those pesky millennials. Besides that, the company needs to compete with a number of other upscale rivals that keep rearing their gourmet heads all over the place. One thousand “Reserve” brand stores are slated to set up shop with another 30 large Reserve Roastery (expect to find that word added to a dictionary near you) and Tasting Rooms expected to open up all over the globe. In case you were wondering what one orders from this new prestige brand, you might consider purchasing a $10 cup of coffee that you can sip daintily from a glass siphon.  Or perhaps you’re up for paying $50 for an 8 oz. bag of an exotic, small-lot coffee? I’m sure you’ll find something worth depleting your funds.  In any case, Starbucks also announced plans to open another 12,000 stores –  that’s in addition to its already existing 25,000 stores –  in the next five years.  Five thousand stores are slated just for China. The company also plans to annually boost revenue by 10% while adding between 15% – 20% to its shares, and increase its focus on its food offerings since the coffee giant is convinced it can double its growth in that area.

What a pill…

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Image courtesy of amenic181/FreeDigitalPhotos.net

Donald Trump’s latest executive plans involve bringing down drug prices and the pharmaceutical companies that keep increasing them with seemingly reckless abandon. Which is kind of ironic since pharmaceutical stocks saw a huge surge following Trump’s election. And here they thought they had an ally. Hah! A Kaiser Family Foundation survey leading up to the election found that people felt drug prices were the number one healthcare issue for the next President. Well, I guess the President-elect is ready for it then. Sort of. Trump has yet to outline any concrete plans on how he is going to achieve this goal. But during his campaign, Trump did say that he is all in favor of consumers having their meds re-imported. He also wants Medicare for the elderly to renegotiate drug prices directly with pharmaceutical manufacturers. That should be fun to watch, especially because both the industry and many many Republicans are vehemently against that idea. Stay tuned for that drama. Just today, Pfizer Inc. and Flynn Pharmaceutical Ltd. were slapped with some massive record fines in the UK after raising drug prices by…wait for it…2,600%. Now, Pfizer will cough up about $106 million, while Flynn will fork over approximately $6.5 million. I guess they should be happy that they were busted in the U.K. and still have time to clean up their act in the United States before Trump-dom takes effect. In the meantime, Allergan Plc. CEO Brett Saunders is bracing himself for the new president’s impact and said Trump could end up being more “vicious” on pharmaceuticals and their drug pricing than Hillary Clinton might have been. But he also pledged to limit price increases to less than 10% per year. Or perhaps he did that lest Trump unleash his Twitter wrath on Allergan, just like he’s done to several other individual companies including Carrier Corp., Ford and Boeing.

Under-stocked…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Yesterday, President-elect Donald Trump’s team announced, with no explicable reason as to the timing, that he sold off all of his stocks back in June. Don’t hold your breath for proof of that sell-off as none was provided. While being interviewed today on the “Today” show by host Matt Later after being named Time Magazine’s “Person of the Year,” Trump explained that he decided to unload his stock holdings in order to avoid any conflicts of interest. How very gallant of Mr. Trump.  And even though the press was not made aware of it until yesterday, Donald Trump insisted that everybody already knew. We just don’t know who “everybody” is. Mr. Trump went on to say that he sold off his stocks since he knew he would win the election and would be making deals for the United States that could affect various companies in all sorts of different ways. That was indeed very thoughtful of him. He also said he didn’t even own that much stock.  Which is debatable at best since a recent filing from December of 2015 valued his holdings at $40 million. But in all fairness, his stock market holdings pale in comparison to his real estate holdings which apparently make up the bulk of his net worth.  Ethics experts, however, are suggesting those real-estate holdings might also be a conflict-of-interest as well. Just saying. It’s worth noting that since his sell-off, the S&P 500 went up over 10% while the Dow Jones Industrial Average hit some very impressive all-time highs. Since Trump’s victory, many stocks have also hit all-time highs and, of course, he’s taking credit for it.

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Steel Numbers, Medicare Lottery? and Has Your Mars Bar Gone to the Dogs

Steel yourself…

Image courtesy of Baitong333/FreeDigitalPhotos.net

Image courtesy of Baitong333/FreeDigitalPhotos.net

It was big fun on Wall Street today with a slew of companies announcing their earnings. But the one everyone was waiting to hear from was Alcoa. In keeping with unofficial tradition, the global aluminum company, Alcoa, kicked off the first quarter earnings season by announcing their earnings on Tuesday afternoon. And wouldn’t you know it – they beat the Street’s predictions and were up by $0.09 per share. Wall Street loves Alcoa because when Alcoa goes up, it’s a pretty sure bet that a whole bunch of other companies are going to follow. Of the 21 companies that announced earnings, 11 beat the Street, two were right on target and eight got beat by the Street.

Doctor Moneybags…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Back in 2012, Medicare reimbursed close to 900,000 healthcare professionals to the tune of $77 billion. The average provider received $87,883. But not West Palm Beach opthomalogist Salomon Melgen. He seemed to have won the Medicare lottery, getting reimbursed around $21 million. It must be because he’s a superior doctor, right? But he wasn’t the only one making a some major cash as six more doctors also surpassed the $10 million mark. Minor things like that got the government a tad bit suspicious that maybe people were committing fraud. Yeah, I know. Hard to believe. So after years of secrecy, the beans have finally been spilled and detailed records are being released as to who got reimbursed and for just how much. Oh and btw, Dr. Melgen is involved in a criminal inquiry with a US senator.

Nothing to bark at…

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Ū Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

In the $74.5 billion industry we call pet food, Mars, maker of some of your most beloved candy bars, decided to sell off their dog and cat kibble division. Procter & Gamble picked it up for a hearty $2.9 billion thereby adding brands, including Iams, Eukanuba and Natura brands, to their established canine and feline menus. While I am certain the fine folks at Mars are totally down with our four-legged friends, the fact is their pet food division wasn’t really bringing in enough cash to make it a keeper. By selling off the pet food division they can now free up some of that cash for research and development and also share the new found wealth with some very lucky shareholders, many of whom, I am certain, make wonderful companions to their furry friends.