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Reuters  May 24  Comment 
Apple Inc , which has resisted pressure from U.S. law enforcement to unlock encrypted iPhones, this month rehired a top expert in practical cryptography to bring more powerful security features to a wide range of consumer products.
Benzinga  May 23  Comment 
David Tarantino of Baird reiterated a Buy rating on shares of Starbucks Corporation (NASDAQ: SBUX) on Monday with a $68 price target. Speaking as a guest during CNBC's "Call Of The Day" segment, the analyst defended his bullish thesis and said...
The Hindu Business Line  May 23  Comment 
The board of directors of Jyothy Laboratories has approved the merger of subsidiary Jyothy Consumer Products Marketing (JCPM) with itself. In a notification to the stock exchanges, Jyothy Laboratories...
Wall Street Journal  May 20  Comment 
Marketer of consumer products including Ajax, Fab and Rit files for bankruptcy court protection from creditors and puts its collection of household products on the auction block.
MarketWatch  May 17  Comment 
Target Corp. recalled about 2,600 Hanukkah menorahs sold from October 2015 through December 2015 for about $20, because of a fire hazard, according to the U.S. Consumer Products Safety Commission. The clear acrylic menorahs, in a pyramid design...
Forbes  May 16  Comment 
In afternoon trading on Monday, Utilities stocks are the worst performing sector, not showing much of a gain. Within that group, Exelon Corp (NYSE: EXC) and PPL Corp (NYSE: PPL) are two large stocks that are lagging, showing a loss of 0.7% and...
The Economic Times  May 13  Comment 
Godrej Consumer Products is a high beta stock (1.11) and is trading well above its 50-day, 100-day and 200-day moving averages at Rs 1,329.76, Rs 1,285.55, and Rs 1274.15 respectively
WA Business News  May 12  Comment 
 US stocks have ended mixed, with gains in telecommunications and consumer staples helping make up for a tumble in Apple to a two-year low.




 
TOP CONTRIBUTORS

The Toy business leads this category, and by a wide margin. The 3 largest U.S. toymakers, Hasbro (HAS), Mattel (MAT), and JAKKS Pacific (JAKK), were all on the screen for significant periods of time. I think this is another illustration of how the Magic Formula does a lot of the work of digging up beaten down sectors for us. The first quarter is generally a weak one for toymakers, as most of their profits come in the Christmas season (as much as 60%).

The original thought was to separate between Consumer Staples (items that we must buy regardless of our financial condition) and Consumer Discretionary (luxury goods). However, many of the industries above would be ambiguous. For example, we need shoes (making them a staple), but in tight times we may decide to buy a store brand instead of more expensive Nike (NKE), adding a measure of discretion to the purchase. Consumer goods companies can make great long term investments - just ask Warren Buffett, whose investments in Coca-Cola, Anheuser-Busch Companies (BUD), and Procter & Gamble Company (PG) are legendary.

Forces affecting the Retail Industry

Brand is unquestionably the strongest form of competitive advantage in Consumer Goods. However, it's important to also judge the durability of the brand. For example, Coke is a brand known around the world, and has endured over 100 years of competition to still enjoy the top spot in the soda category today. That's a durable brand. Compare this to Gap (GPS).Ten years ago, Gap and it's spin off stores Old Navy and Banana Republic were considered fashionable and chic for the all important teen and college set. Today, the store is avoided by those same groups, lest their fashion sense be ridiculed by friends. That's a fickle brand. It's important to be able to separate a fad from a juggernaut. Add this to the PR problems Mattel faced last year with lead paint, and you have an unwanted sector, with some interesting potential investments.


Distribution is also important in the Consumer Goods sector. A company with a wider distribution network can leverage economies of scale to earn more on their fixed costs. An especially attractive arrangement is when one of these companies has an exclusive deal with a large distributor. Take Anheuser-Busch (BUD), for example. While this firm has an incredibly strong brand, they also require exclusivity from distributors. This allows them to lock out competitors like Molson Coors (TAP) and Miller, protecting profit margins. The soda companies also do this well. Have you noticed that McDonald's (MCD) only sells Coke products, while Pizza Hut (Yum! Brands (YUM)) only sells Pepsi? With these exclusive deals, competitors are blocked from those roads of distribution, protecting profits for the established companies.

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