Filed under: Products and services, Marketing and advertising, Stocks to Buy

The market’s choppy / consolidating pattern continues, suggesting the need for an additional defensive play or two (or perhaps more), and with this as a backdrop, Ecolab is worth a review.

Ecolab (NYSE: ECL) is a global supplier of cleaning, sanitizing, and maintenance products and services for the hospitality, institutional, and industrial markets.

Analysts anticipate the company’s domestic institutional, Kay, food & beverage, health care, and pest elimination units to continue to expand. Revenue is expected to increase a healthy 10-13% in 2008.

Further, international sales should continue to be strong, with better-than-adequate margins. Overall costs remain reasonable, even with higher raw material costs. In short, it’s a largely positive commercial landscape for ECL, bolstered by favorable international economic conditions. The Reuters F2007/F2008 EPS consensus estimates for Ecolab are $1.66/$1.90.

The dangers? Ecolab remains vulnerable to unexpected slowdowns in the hospitality, travel, and food service sectors. Analysts also have their on those aforementioned raw material costs, and ECL’s capability to launch successful new products.

The First Call mean rating for ECL is: Buy. [16 firms.] Mean 2008 target: $56.00. [high: $60, low: $51.]

Stock Analysis: Ecolab is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from ECL’s shares. Sell / Stop Loss if you were to buy shares in this company: $28.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

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Filed under: Marketing and advertising, Books

Among investment gurus, Ken Fisher is undoubtedly one of the ideal. The Only Three Questions that Count is one of the ideal investment books to come out in recent memory, he has put together an amazing track record with Fisher Investments, and he’s even on the Forbes list of the 400 richest Americans.

So why, Ken, must you promote yourself with all the subtlety of a late-night no-money-down infomercial guru?

Just once, I would like to be able to log on to Forbes.com without having to smash my speakers to silence your pitch for your firm.

I feel like a lot of serious, smart investors skip Ken Fisher because they’re so turned off by the incessant marketing… we associate that kind of relentless pitching with charlatans, which Ken Fisher is most certainly not.

So the purpose of this post is two-fold: if you haven’t read Ken Fisher’s book, you really ought to go purchase it. It’s 58% off on Amazon. And if you’re Ken Fisher, please think about hiring a new, more nuanced marketing firm.

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Filed under: Products and services, Marketing and advertising, Hershey Co (HSY)

The relationship between Hershey Co. (NYSE: HSY) and Wall Street has been sour for a while. Shares of the chocolate maker have plunged more than 30% over the past year amid concerns about rising commodity prices and the growth of healthier eating habits. Now, the confectioner is raising wholesale prices by an average of 13% on one-third of its domestic product line effective immediately [subscription required].

Chocoholics are paying the price for higher costs for raw materials, fuel, utilities, and transportation.

The move comes less than a week after the Pennsylvania company reported lousy fourth quarter results and gave investors disappointing guidance. In addition, the No. 1 candy maker recently bowed to pressure from law enforcement officials and stated it would stop making Ice Breakers Pacs mints after some complaints that the candy might be mistaken for heroin or cocaine.

Yet another reason for people to eat healthy.

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Filed under: Wal-Mart (WMT), Starbucks (SBUX), Marketing and advertising, Recession

The economy may not be in recession yet, and there’s a minor chance it will avoid one in 2008, but marketers/advertisers seem to be in ‘recession-mode,’ regarding the tone of their ads, The New York Times reported Monday.

Along with Wal-Mart (NYSE: WMT), the Times cited several corporations that have taken a ‘tougher times ahead’ approach with ads. These include Capital One (NYSE: COF), “Uncertain times call for a certain rate,” Starbucks (NASDAQ: SBUX), which is testing a $1 coffee in Seattle, Washington, and Nissan (NASDAQ: NSANY), which is emphasizing the fuel economy of its 2008 Altima, rather than the car’s styling and performance.

Stephen Quinn, Wal-Mart’s chief marketing officer, told the Times, “When gas prices spiked last spring, we saw the pressure this put on our core customers.”

Economic Analysis: With major ad markets in California and Florida bearing a huge portion of the housing sector’s slump, it’s not surprising that corporations have altered ad campaigns to emphasize the money-saving / better value nature aspects of their products and services. But one should not equate this with Corporation America believing a recession is ahead. Ad tweaking indicates that a corporation doesn’t anticipate a robust year in its sector, and is adjusting its operational stance.

A superior indicator of Corporate America’s view of the economy? Staff hiring. If dozens of corporations announce that they’re laying off employees, that’d be an indication that a economic contraction is likely.

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Filed under: Blogs, Marketing and advertising, Target Corp. (TGT)

Today’s New York Times takes a look at Target (NYSE: TGT) and what can only be described as its arrogant attitude towards bloggers.

ShapingYouth.org sent an e-mail to the company, criticizing an ad Target was running that featured a woman lying on a Target logo with the bullseye centered on her crotch. Target responded by saying that, “Unfortunately we’re unable to respond to your inquiry because Target does not participate with nontraditional media outlets.”

Wow! That kind of arrogance reminds me of Wal-Mart (NYSE: WMT) — isn’t Target supposed to be hip and chic? You’d think it would be up on what a powerful force bloggers are becoming.

A policy of not responding to blogs makes no sense at all. Companies should respond to questions from any potential customer.

Target explained to the New York Times that the ad was a woman making a snow angel, suggesting that it wasn’t meant to be provocative. From looking at the ad, and despite the retailer’s attitude, I’m actually inclined to agree.

Target could have saved itself a lot of trouble by just writing back to the blogger, explaining the idea behind the ad. Instead, the company’s PR team is now answering the same question from the New York Times, and wasting further time defending its asinine policy of not responding to blogs.

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Filed under: Earnings reports, Forecasts, Products and services, Management, Consumer experience, Competitive strategy, Starbucks (SBUX), Marketing and advertising, McDonald’s (MCD)

It has definitely been a rocky earnings season thus far, and on Monday, fast food giant McDonalds Corp. (NYSE: MCD) will get its turn to impress Wall Street when it reports its fourth quarter numbers. Shares of the company traded up slightly on Friday in anticipation of the upcoming event. Shares finished the day up 0.19% to $54.10.

So what exactly are analysts expecting to hear from McDonalds for the quarter? Consensus estimates for the company ’s most recent quarter are running at 71 cents per share. During the fourth quarter of 2006 the company had actual earnings of 61 cents per share, so Wall Street is looking for a slightly higher than 16% jump year over year.

One thing that we have the ability to definitely expect to hear more about during the quarterly conference call will be the company’s plan to start offering mochas, lattes, cappuccinos, and espressos at all of its American locations. This is a strong move by the company to break into the coffee market, but has met some resistance from store owners.

The coffee move was first introduced back in November, and at first, store owners were pretty hesitant, citing the approximate $100,000 cost tag to get stores fitted with all the necessary equipment. As Douglas McIntyre wrote earlier this month, the company thinks that by adding coffee bars and baristas it will eventually be able to add on about $1 billion in annual sales. This is a direct attack on Starbucks (NASDAQ: SBUX) which has been struggling to keep its market share over the past year.

What are the analysts saying? Citi Investment Research analyst Glen Petraglia says that McDonalds remains his top pick in the restaurant sector. Stating that the stock isn’t exactly what he would call “cheap,” Petraglia says that he still feels that the downside is pretty limited on this one.

The last time that the company reported earnings was back on October 19, when it matched Wall Street estimates with 61 cents per share. To find the last time that the company was unable to at least come in in-line with analyst estimates you would have to look all the way back to January 2005, when it missed estimates for its fourth quarter 2004 by one penny.

Will the trend continue for McDonalds, or will we see a repeat of fourth quarter 2004. We’ll find out early Monday morning, and will update you as soon as the numbers come in, as well as gage Wall Street’s reaction to the quarterly numbers.

Let’s close with a one year chart to see how the stock has been performing over the past 52 weeks:

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer

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Filed under: Deals, Management, Marketing and advertising, Entrepreneurs, Small business

Monday-morning quarterbacking. Locker room talk about the best investment you’ve ever made. We all do it to some extent. How many of us would like to hit a true homerun?

Following up on a post I had earlier in the week on some of the changes in the music industry, I encountered an exclusive on Bloomberg this morning. The article, titled “Want to Be a Movie Producer,” plays right into our fantasies about making homeruns with our investments.

The article profiles a new investment firm, called IndieVest, that targets movies. Individuals who pay an annual fee can choose investments from a menu of films to be developed, produced, and distributed by the company.

Investors, wealthy individuals who must meet minimum net worth stipulations, are guaranteed at least 50% of the profits after getting back their initial investment (along with a premium), with 40% going to the makers of the film and the remaining money, of course, to IndieVest.

Who knows, maybe you’ll strike it rich by going long the next Alvin and the Chipmunks?

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

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Filed under: International markets, Forecasts, Products and services, Management, Consumer experience, Competitive strategy, eBay (EBAY), Amazon.com (AMZN), Marketing and advertising

When we took a look at eBay (NASDAQ: EBAY)’s fourth-quarter earnings last night, we also made note that long-time CEO Meg Whitman would be stepping down, to be replaced by John Donahoe. We wondered what changes Mr. Donahoe would be bringing to his new position, and some of those answers have come quicker than we expected, as Donahoe has already announced a few changes that we have the ability to expect to see.

One thing consistently on the mind of eBay users is the website’s fee structures. Since last year, users have been openly voicing their disappointment with what they consider to be abnormally high selling fees, and it seems like Donahoe will quickly look to address these concerns.

Donahoe said that within a few weeks, we will be seeing a brand new fee structure from eBay. In response to what users are demanding, eBay is planning to lower its upfront listing fees, but at the same time will be raising final selling fees. These final fees are only paid once an item has been successfully sold, and I am sure that users will not like to hear this too much, but they should be happy to hear that the initial listing fees are going to be reduced.

Another massive change for eBay will be the emphasis the site places on fixed-price items. Historically, eBay has mostly been about one simple thing: user-to-user auctions. Now that the company finds itself in some steep competition with rival Amazon.com (NASDAQ: AMZN), the company has decided to put more emphasis on its fixed-price items, bringing a much greater “Amazon-like” experience to eBay.

While the new changes may ring positively for eBay users, it will more than likely lead to lower revenues for the company in the short term. As a result, the company was forced to lower its guidance for the current quarter as well as its full year 2008 outlook, which has resulted in shares falling in today’s session. The stock traded down to a new 52-week low of $25.75 earlier in the session, but has bounced a bit from the lows up to $26.70, which is down 7.6% with about an hour left in the trading session.

Looking down the road, it is anyone’s guess how the new changes will impact eBay’s business. I assume that the lower initial listing fees should result in more listings on the site, but will it be enough to get eBay back to its glory days? Time will tell, and until we get more details on the upcoming fee structure, it’s just way too early to predict what reaction eBay users will have to the new changes.

Other changes that some industry insiders are calling for Donahoe to take into account are structural changes to the company. Will Donahoe look at the possibility of selling off Skype? How about the option of spinning of its popular PayPal business into a separate company? Both of these options are choices that Donahoe will undoubtedly be forced to take into account once he takes over the reins a few months from now.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer

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Filed under: Earnings reports, Forecasts, Bad news, From the boards, Press releases, Products and services, Management, Insiders, Consumer experience, Competitive strategy, eBay (EBAY), Amazon.com (AMZN), Marketing and advertising

Shares of e-commerce giant eBay Inc. (NASDAQ: EBAY) are trading around 7% lower in after hours trading today following its fourth quarter earnings release shortly after the market close.

As I looked at in my earnings preview, the company has been struggling to keep up with the competition in its auction business. Two key components that have injured eBay’s auction business are (1) raising fees that have left some of the company’s long term users looking for other venues to do their business, and (2) massive number of fraudulent items on the site.

The company announced that its fourth quarter numbers were actually superior than Wall Street had expected, with earnings per share of 45 cents per share, easily topping the 41 cents that analysts had been expecting to see.

So why is the stock down in after hours trading? Looking ahead the company forecast earnings below what the market had been expecting to see. The company announced that it now is looking to see between 37 and 39 cents for its first quarter, below the 40 cents that Wall Street was hoping to hear.

One of the biggest pieces of news regarding eBay was the announcement that the company’s CEO, Meg Whitman, would be stepping down from her post at the end of March. Taking over for her will be John Donahoe who is currently running the company’s online auction business.

eBay users over the past few years have definitely had a love/hate relationship with Whitman, and it will be interesting to see just how well liked her successor finds himself. From a users perspective, eBay users are going to be looking for one main thing… lower fees. Don’t be surprised to see fees coming down once Donahoe takes control.

From a shareholder point of view we should probably anticipate to see the new CEO come with the main goal of reducing overall costs. While anticipating to see overall cost reductions, marketing and advertising should be an area where investments are made. The company is in fierce competition with Amazon.com, Inc. (NASDAQ: AMZN) and it needs drastic measures to fend off its most powerful online rival.

Lower fees, heavier advertising… what other recommendations would you’ve for Donahoe as he prepares to take over the reigns in a tiny under 10 weeks from now? Let us know what changes you would like to see. Whether you’re a eBay user, or an eBay investor… what changes would you love to see at eBay?

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer

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Filed under: Products and services, Starbucks (SBUX), Marketing and advertising, McDonald’s (MCD)

As Tom Taulli recently reported on BloggingStocks, Starbucks Corporation (NASDAQ: SBUX) is experimenting with new pricing strategies, including $1 cups of coffee and free refills.

This is pretty cool if you’re a consumer — assuming you don’t mind watching lines at the coffee shops grow exponentially in length.

Even as concerns about Starbucks’s growth have emerged, traffic at the shops have stayed strong. Cup of coffee for $1 will bring in more customers, but will also likely cannibalize sales on the more pricey brews. And free refills should encourage people to linger in Starbucks for hours — while still only spending $1.

Starbucks has been a premium brand for its entire existence, and now appears to be gearing up for what amounts to a price war with the likes of Dunkin’ Donuts and McDonald’s Corporation (NYSE: MCD). Given McDonald’s size and scale, I doubt that that’s a battle Starbucks can win.

In addition, I don’t think it’s a battle it should be fighting. Going from a premium brand to a commodity offering is not a good way to keep returns strong. It might not be a good way to grow sales, but Starbucks’s ideal bet might be to tell McDonald’s, “You can have the budget-conscious consumers — we’re gonna stay high-end and take advantage of our strong brand to charge premium prices.”

As Tom Taulli said, it might be that Starbucks doesn’t really have a choice given the in-roads McDonald’s is making, but if offering $1 coffees is Starbucks’s new strategy, I am not impressed.

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