Castanza

I don't think its necessarily a hard political stance against VS. But I think it's a sub-conscience reaction to our current political/cultural movements. This has to undoubtedly have a large affect on what products are successful etc. I don't think LULU has saturated that market. However, one thing I will say affects women far more than men is life style creep. Once someone buys LULU I believe they feel they are buying a better/trendy product and will continue to stick with that brand. There have been dozens of studies that show this. Women are much more likely to buy a product specifically because of brand than men (I do think this is changing a bit though). LULU also is now marketing towards men which could end up being an advantage. Nike seems to have a price range between the two with extremes on either end. The thing about Nike is they continually pump out new product. Constantly shifting styles etc. all of which affect the competition and the styles they also bring to the table as it constantly keeps pressure on them. You're right in saying that VS doesn't have competitive items in the specific areas you mentioned. The question is can they?

L Brands would certainly fit the bill. Although it has had a rough few years, it's been a good performer with a long term perspective averaging roughly 36% yoy since the late 80's. I'm inclined to believe they will adapt their business model to better suit trends in the industry, but their debt obligations are a concern. Actually just started another thread regarding it. I'll have to take a look at ROST.

No i agree completely! When I back tested it I just removed companies that weren't public and re-allocated funds. Did women ever wear crocs? Again, it's more of a humor post than anything. I wouldn't recommend investing like that.

Humor Admittedly, this isn't a completely serious thread but in a way it is. Not sure if anyone here uses Reddit or has been on the sub r/WSB ( WallStreetBets). I'd recommend a visit without the stay as it's complete nonsense and riddled with people making OTM options plays on anything and everything. But every once in a while there is a post that is actually interesting. Someone on the sub came up with the idea of "creating" their own ETF which tracks the spending of "basic white bitches." Conveniently they named it $BECKY. Their thesis was that rich white girls will always buy the same things. Essentially it's like a cult of status symbols that you "must" have. Turns out the fund does really well with equal weighted holdings. Even the back test results were pretty amazing. It would have been down 58% in 2008, but since the the lowest return was 7%, highest 148%, average was something like 35+% yoy (if I'm remembering correctly). You could probably add a few other brands in there like Target if you wanted. On a serious note, has anyone done investing like this before? Demographic isolation? I remember reading about a guy who invested only in companies with women CEO's because they have an average of 19% higher ROE and a 10% higher div payout than male run companies. -$ETSY -$LULU -$ULTA -$GOOS -$SBUX -$AAPL -$FB -$DECK (they make UGGS)

I've had pretty much all these same thoughts. I've talked with my wife extensively about this. I don't think it makes sense to market to the trans movement. The demographic isn't large enough to make a real difference on the bottom line. maybe some good publicity, but in the current attention span of our culture that doesn't mean anything. I think you've highlighted the main issue at play and that is their current product style, maybe price, and who the market is. Their current model is still the "bombshell" model style (push-up bras, all that wonderful jazz.) But the current fashion trend seems to be this more "free" "hippy type" stigma. More specifically, bralettes and the ability to make a girl or woman feel more comfortable with their individual differences. This IS a market that they can penetrate, but it will take a lot of leg work on their part, because they have to change their current perception and then play catch-up. American Eagle has done a great job at that and they have done really well this past year. That's pretty much all they sell. I believe my wife has even bought stuff from there recently and I asked her if it was strange because I thought that store was more geared towards the 15-20ish age range. But turns out her and a lot of her friend (granted we are late 20's) have been going there too, because they have a better selection of those products. I think that women's beauty products really go in cycles. Granted i'm not old enough to verify this with first hand knowledge, but it seems this current "millennial generation." mimics very closely the ideals, style, culture, etc of the people from the 70's. I think that will eventually change again and in some time (a generation maybe?) we will see the whole "bombshell" look come back. Once society kind of solidifies and comes to terms with this whole social movement of "equality", being heard, being recognized for who you are, etc. People will then begin to search for things to set them apart after a bit of time. If human nature and history tell us anything about women, this will probably be facilitated through looks and beauty products.

Technology to the rescue. http://whiskyadvocate.com/rapid-aging-whiskey-feature/ "The Science Behind Alternatively Aged Whisky. The Rosies pump ultrasonic waves through whiskey and other spirits to achieve the smoothed-out flavors and textures that typically come from years of barrel aging." Actually pretty interesting. Thanks for sharing. What a time to be alive lol Seems like something that would be targeted and lobbied against by big whiskey companies.

This is nonsense. The reason why unfunded pension liabilities exist is because they weren't funded. Basically you've cut a deal (how much you'll pay) and then you didn't keep your end of the bargain (i.e. you didn't pay). The reason you didn't pay is because you we're selfish. You gave yourself a tax cut. Then in order to reneg you try to deflect and obfuscate. You get on your righteous horse and start bloviate: those damn pensioners, those damned unions, teachers... watch out. But really the reason why the situation exists is because you were a selfish deuce and you didn't pay what you owed. Just in case it's not clear when I say "you" I don't refer to you personally, but to certain groups. When you look at the private sector you have a similar situation where most of the pension plans are underfunded. The principle is the same. It's also greed. You've underfunded the pensions to show better financials. This in turn led to higher bonuses, and gains on stock options from higher valuations. However virtually all the companies that have unfunded pension plans for employees have fully funded pension plans for executives. Funny how that works no? GE is probably the worst private offender on pensions, but I know for a fact that in 2011 the executive pension plan at GE was overfunded. So workers and teachers should watch out but God forbid that Jack Welch should pay for light bulbs and toilet paper. I agree with what you say, the private sector certainly isn't void of these issues. I used to work for UPS and their pension situation is becoming a major issue quickly. The Teamsters Union is mostly to blame. I remember talking with a driver who was 63 (amazing he was still working). When they switched to the pension, whatever company it was pitched the idea that they would be making 11% returns on average......11%! Do pensions ever work out? Even pensions where people do pay fail. As for the public sector my biggest gripe is that these are "guaranteed." For example in PA during the 2008 financial crisis lots of people hit hard times. The pension fund had a lot of issues following 2001 when state lawmakers increased benefits. Turns out 7 years later they started noticing this major issue that was looming. My issue with public sector pensions is its always raiding the taxpayers pocket to make up for the difference needed. It's difficult "increase" benefits when you have a projected model with a static sum but you need to apply that static sum of money to something that can change. As we've seen with healthcare, col, etc (not saying these are directly related to pensions). The public sector is riddled with these "adjustments." I believe it was in Illinois where teachers who retired were expected to receive a 46k a year pension. Turns out when you do the adjustments for COL and everything else they were getting over 70k a year. These pensions are riddled with all kinds of loop holes, issues, etc. It's unsustainable. Again, I am not faulting individuals who retire with these pensions. Who wouldn't take advantage of they system? What they do (teachers, firefighters, police, etc etc....everyone but tax officials ;) ) is overall good for the country. But the system needs changed. Why shouldn't they just receive a 401k like everyone else? Makes you wonder after a while who the real "public servants" are.

Anyone else have L Brands on their watch list? Stock has been beaten down for a few years now. Potentially could see the spin-off of Bath & Body Works from Victoria Secret. https://thefly.com/landingPageNews.php?id=2874500&headline=LB

I wouldn't be too sure about that. Have you heard of MGP Ingredients: https://www.cincinnatimagazine.com/high-spirits-blog/mgp-ingredients-lawrenceburg/ They are contract producers for small label US whiskeys. You want to make Castanza whiskey? Call em up and they can make it happen. That's not exactly unique though. It's basically your own label on their whiskey. As mentioned in the article, the most important factor to good liquor is "time." It's difficult for small fry companies to sit on losses 10 years straight until their bourbon is aged. I'll admit, this seems like a relatively decent company with a decent client base. But from a marketing aspect I can't help but see the shortcomings. It doesn't feel as local as craft beer which are generally brewed on site. Therefore I think the "time" element is the largest barrier to entry in this market. But like I said. I'm not vested in any "beverages." And this article is a good example of why. I don't understand the market well enough. Too much regulation exists in it for me to find it interesting and lastly who knows what consumer trends will be once the boomers die off (no offense to the boomers). Do millennials have enough money for expensive liquor? All i remember from my college days is Kamchatka vodka and Early Times whiskey.

And this is why unions and pensions should not exist if they are representing/for employees who are being funded by tax dollars. At the very least they shouldn't be "guaranteed".....cough cough teachers I'm looking at you. Same goes for all the firefighters, police etc who run up their salary before they retiring. If pension contributions can't be met then that's on them. Save your own money. Live responsibly. Pay what you owe.

Goes to show you how corrupt the world is. Nuclear Energy (a modernized version of it) IS the only viable option for a true future of clean energy. Yet we see things in politics like "The New Green Deal" that actually want to eliminate every nuclear plant there is because it wont provide jobs to boot their (politician) voter base. Not to mention nuclear energy is essentially the cleanest energy there is. Highlights from the talk: - batteries aren't efficient enough - batteries are too expensive - Solar is inefficient (50x50 sq mile solar field to replace a single natural gas plant. Not including the cables, infrastructure, battery storage etc) - Solar is too expensive - Solar is not "green" energy - Wind is not "green" energy - Wind is highly inefficient - Wind and solar should be used as subsidiary energy edit: And to clarify, I'm not against wind or solar. They are great. But they aren't the solution at massive scales.

Interesting article on beer. I was surprised to see that even craft beer brewers are hurting. It’s a bear market for beer :o https://www.ccn.com/millennials-killing-us-beer-next-victim-is-heineken The trend to spirits is mentioned as well. Heineken is the Budweiser of Europe, imo. the stock looks pretty overvalued too, but I think they are better run than Ambev. Personally I like Diaego better than any other alcohol related companies. They have a good diversification of product ranging from high end liquors to iconic and cult following beers like Guinness. It is trading at a premium for sure, and I doubt I would enter a position at this point. But it has performed much better than the competition out there. I think they do a good job of securing quality brands that consumers like. Liquor is for sure a "safer" bet it terms of the long game. Not many small craft liquor producers. Especially when it comes to stuff aged over 10 years. It's hard to replicate that.

Not sure if this has been discussed here or not. It's really more for entertainment than anything. But this website allows you to see what members of congress are buying or just doing with their money in general. http://clerk.house.gov/public_disc/financial-search.aspx There are a few interesting plays. Noticed a few people taking large positions in GE and Travelers Inc, Massie opened a position (maybe added) in Tesla. Just browsing through for 30 min or so there seems to be a lot of people buying midstream, and utility companies. The most interesting was by far Nancy Pelosi. She opened a 1m-5m long call position on Amazon. Purchased 10k shares of At&t, and opened a 100-250k long call on FB. Again! Not saying to follow their investment moves (they probably have someone else do it anyways) but it's interesting regardless.

Reminds me of the "why doesn't Apple just sell its software to go into IBM/Clone machines just like Microsoft (instead of worrying about hardware/manufacturing/etc)" argument of 20 years ago. Then Apple went on to also create its own retail stores and vertically integrate even more so. Tesla wants to own the entire customer experience. If it's done right, you get a tremendous, long-lasting moat as Apple has shown. The big reason reason why I predict that "Tesla killers" will likely fail isn't necessarily because of inferior product. It's the entire customer experience of owning those "me too" products. Similar reason why "iPod" and "iPhone" "killers" like the Zune never stood a chance. But couldn't consumers still get the "me too" feeling by buying a vehicle that simply has Tesla options rather than having it be a pure Tesla. And why couldn't they do both? Market a pure Tesla as a luxury car (which it is) and also market a Chevy Cruise with Tesla power as an economy version? I mean I can see how they are sort of trying to conquer this with the Model 3. But the auto industry has a lot of brand loyalty. You think it would be easier to reach more people by doing this. If Ford and GM were ever willing to do this.

Why doesn't Tesla stop focusing on building complete vehicles and instead focus on powering the vehicles of other companies. Why couldn't they build drive trains, motors and wheel bases to be retrofitted into any number of vehicles already on the road? They could be the Cummins, Lariat, Duramax engine of the EV segment. "Introducing the new 2020 BMW 530i powered by Tesla" "Introducing the new 2020 Honda Civic powered by Tesla" "Introducing the new 2020 Chevy Malibu powered by Tesla" It seems like it would cut down on manufacturing inefficiency, time and money spent on R&D, time spent fixing issues not related to the engines and give them a clear path forward which (I'm assuming) would have a faster turnover rate. Let the big brands market the cars. Think of all the marketing money Tesla could save. If every major auto brand offered one or two cars with a Tesla powered variant they would sell themselves at a much faster rate. If they were to do this I can easily see US consumers jumping ship on foreign brands to come back to the big US brands which are currently (in the consumers eye) unreliable, outdated, relics of the boomer era (no offense meant). Thoughts? I'm not well versed in manufacturing or the auto industry. maybe this is way out in left field.

Personally, I'm not a fan of anything auto related right now. Default rates are through the roof. Used car prices seem artificially high (See used pickup trucks). Auto manufacturers are seeing a surplus of new vehicles sitting on their lots. What happens to CarMax when the price of used vehicles gets cut in half? This whole sub-prime auto loan things makes me uneasy and gives me enough pause to stay away. To be fair, I haven't dug into this at length. There probably is some value play to be made. But for me it's enough to stay away.

I don't think driver-less tech is a threat at all. As someone who has done the job I just don't see a reason to implement it. The job is 30% driving and 70% delivering boxes, running from dogs, climbing flights of stairs, entering apartment buildings, using intercoms, talking with secretaries, making judgement calls that an algorithm simply wouldn't be able to do as efficiently. The accident rate of UPS drivers would not justify the cost of investing in driver-less tech. At the very least you would still need a human in the car to get the package out of the back and actually deliver it. But those wages will still be high. So at that point you might as well just pay a human to do it all. And i don't know if you've seen the pack of a UPS truck, it certainly isn't organized with clean walking paths etc. You're frequently climbing over boxes, moving stuff, etc. I mean they handle up to 150lbs. You deliver toilets, snowplows, lawn mowers, flat packed furniture, etc. UPS is very much looking into automation. They have entire teams dedicated to drones, and warehouse automation. I think this is the best place to try and implement something. I have been to both Louisville World Port and the new Atlanta hub (flag ship hubs). They have robot carts that cart packages around (think radio flyer wagon with a brain). But half the time they just sit unused because they are too slow, get freaked out if anything comes near them etc. The CEO has talked at lengths regarding automation and they feel the warehouse is the best place to do this. Whether its drones helping to fly sort boxes or something I don't know, but the tech certainly isn't here yet. Now for amazon, which primarily ships packages in the 5-10lb range I can see drones being functions. But even still they are extremely situational. And more gimmicky than anything else. The best tech I have seen so far (And I've been in warehouses of every company Amazon included) was at DHL in Prague. Their warehouses have some tech that makes sense. Their employees use google glass which locates boxes for them when looking at a wall of packages etc. And they have these carts that use a wireless signal and are tethered to a specific employee. They simply follow the employee around as they sort packages and carry ones that are selected. When the cart is full they can send it off and another arrives. It's simple and efficient. It works alongside current employees. But like I said it's all situational. What works in one center might now work in another. Cheers!

DHL is an entire different animal than UPS and FedEx. The scope of their business is quite impressive. They are honestly more comparable to Amazon than UPS or FedEx as they have Express (Next day air stuff), DGF(Global Forwarding), DSC (supply chain), Deutsche Post(German Post Office), Cargo shipping, etc. Then if you dig in even further they have a lot of database/cloud storage, web hosting stuff etc. They run services for Etsy, and ASOS (British clothing company) and a lot of other companies. But I am with you on the investment front. I have positions in all three, but DHL is by far the most diversified of the companies (except amazon).

In fairness I was just talking about US customer perception :D There is another company up there that's more common that UPS right? Purolator or something like that? Edit: And I appreciate the sentiment everyone!

Interesting! I had no idea FedEx had a pension plan. Really though, the root of this issue is the Union. The Teamsters are nothing more than a mob which will ultimately bleed the company dry. I was told by older drivers that the union promised 14% returns in the past! How crazy is that?! Look at Central States Pension fund. UPS had to take it over because it was basically bankrupt. Another little tidbit is the wages moving forward. by 2022 drivers will be making a base rate of $42/hr. That's what this last contract vote was about. However they did pass the ability to add a new class of drivers which will be used to supplement the current workforce. They will be in a lower tier wage I think capped around $25/hr and are also union employees (Everyone I know voted this down, but the union disregarded its members and passed it through) In my opinion this only signifies the companies concern with meeting future pension obligations as they are trying to shrink the size of "full-time" top rate drivers. I doubt there will be many traditional drivers hired moving forward. This does benefit the union cartel though since their union dues are based on hourly wages. This new class of drivers will be made up of part-time dock workers who drive part of the day. As you can imagine this will bring in more revenue for the union. But the catch is the way the new contract is worded, current full-time drivers are not guaranteed 40/hrs a week if they don't work on a Monday of that week. So a lot of drivers will not meet the 1800/hrs a year requirement to have that year count towards their pension. This means a longer career, drawn out with money going into the pension. Less full-time employees retiring down the line drawing on the pension. And a lower wage work force that will have a lower draw on the net pension funds. This is a very big concern and you can see both UPS and the Union recognize it. They are playing catch up in terms of wages compared to FedEx and Amazon.

I have a bit of an insiders perspective here. I currently work in the "industry" on the tech side of things. But in the past I worked at UPS as a driver (paid my way through college). Now I can't promise all of this information will be relevant or unbiased in anyway shape or form, but I will do my best to give my opinion on the situation. UPS and FedEx are both great companies in the logistics industry. FedEx was founded by a former UPS official (I'm sure most of you know this). However they really are completely different in how they operate and function. This leads to advantages and disadvantages on both sides. UPS is a very streamline company. Their ground and air services all run through the same network meaning their ground drivers deliver Next Day Air packages while delivering ground. This is an advantage because it allows fewer drivers to deliver their total ground volume. This can be a disadvantage though when it gets to busy season and their systems get bogged down. This is an ongoing issue at UPS and is something they are constantly addressing through upgrades. UPS employees are also all under the same umbrella. So management down to the lows of the low dock workers are all under the same supervision. With the exception of UPS Freight who has their "own" management. But if you go up high enough they to are under that supervision. FedEx on the other hand has two separate classes of drivers. One that deals exclusively in Express (Same as UPS air) and another that delivers ground pickups. Now, when seasons get slow this becomes a strain on their efficiency because they are sending out driver with partially full trucks and driving the same miles. If you haven't figured it out by now the logistics industry boils down to one metric. (Stops per mile). But on the flip side of this when times get busy, FedEx has an easier time absorbing high growth in volume because they have packages running through separate systems. Drivers don't have to break off route (like UPS drivers) to meet the time commit for an air package way out in the boonies. They simply "drive in trace." ___________________________________________________________________________________________________________________________________________ Let's talk pay, operating costs etc. UPS pays their ground drivers $36.25/hr. Their pay progression is 4 years (19.50, 21.00, 25.00 36.25). It gets better :D. Overtime is paid as time and a half on anything over 8 hours in a single day. Drivers recognize this rule and can try to use it to their advantage to "milk the system." within scope of not getting fired for poor performance. I'll put it this way. When I hit top rate as a driver I made 92k that year. UPS also has really good benefits. I'm talking the best I've ever seen. Teamcare is the name. You know this is expensive for the company. UPS also has a pension plan which is very costly and imo unsustainable. This is becoming a major issue and will continue to be one down the road. I talked to a driver who retired while I was a driver. His pension was going to be 55k a year. UPS does not have a matching 401k or any other savings plans. I believe some management has stock option plans and they also offer employees a 5% discount on company stock at the lowest price of the year. (Yes I took advantage of this). Not sure how accurate this number is but I was talking to a UPS big wig who came to visit our center and he told me that as soon as a driver punches in on the clock it essentially costs the company $325 between insurance and other "costs." Feeder drivers (not UPS freight, but dedicated ground pickup semi drivers) make well over 100k a year with similar benefits and pension. Don't know their hourly wage, but I've see their gross pay from several employees I knew. And they all work consistent hours. UPS Pays and leases their vehicles and they also pay for the fuel. I averaged 120-150 miles a day as a driver in a truck that got 6mpg. Most are gas now. UPS is a Union (Teamsters) ___________________________________________________________________________________________________________________________________________ FedEx (Mind you this is from knowing FedEx drivers.) The way FedEx ground works is the routes are contracted out. From what I understand is FedEx "sells" an area to someone (Think garbage routes) and they are responsible for hiring drivers, leasing trucks, etc. This cost goes back through FedEx though as they are ultimately responsible for paying employees. Now employees at Fedex make far less than at UPS as they are non-union. FedEx ground drivers make around $16-$20 top rate. FedEx Express drivers can make up to $26ish. The difference between these is FedEx ground is contracted out while Express is not. This makes it difficult to figure out how much they are costing the company. FedEx ground is really weird. I knew guys who had to pay for their own fuel, vehicle maintenance and who didn't have insurance. But then there were other guys who didn't have to pay for any of that. I thin it varies based on the owner of the area. Express drivers on the other hand don't have to pay for vehicles fuel etc. They also get insurance and have a matching 401k. No pension though. Often I remember talking with express drivers and they basically told me ground is like its own company. They never worked with or met any ground drivers etc. Just seemed odd. ___________________________________________________________________________________________________________________________________________ Employee perception, Customer Perception, Standards UPS to put it nicely was the worst environment I've ever worked in. Employees were Union while management wasn't). This created all kinds of tension in the workplace. I've seen fist fights etc, and its all over the place. Go to browncafe and check it out. UPS drivers are held to extreme standards when it comes to driving (yes there are exceptions). Drivers are well compensated and are expected to perform their job to a high degree. Management would come out and secretly follow you to make sure you're being productive and following safe work methods. They had a tier of escalation to lose your job and it wasn't that hard. (verbal warning, warning letter, fired if within a 4 month period ). And it could be something simple like not tucking your mirror at stop, or not putting your flashers on, or not backing firs so it's easier/safer to leave etc. UPS treated the smallest thing (tree branch scratches) with the utmost importance. This for the most part creates a very safe work force. That's why UPS is by far the safest logistics company. UPS has telematics which track EVERYTHING. I'm talking if you're wearing your seat belt, using the handrail when you exit, driving with the bulk door open, how fast you were going, if you backed to your driver side and how far you backed etc. They knew when you stopped to take a piss in the woods. ORION (route finding software) Absolutely terrible and UPS was robbed by purchasing this. The system does not work in saving miles. Often I would just deliver stuff how I saw fit and 9/10 would be the estimated building ETA and miles by a long shot. But because they purchased this they really began hammering it and forced drivers to follow it. This is costing the company more money but they are too prideful to let it go because they spend millions on it. When being forced to follow it, I worked longer hours and often drove more miles as the system couldn't account for every variable which resulted in many service failures etc. ___________________________________________________________________________________________________________________________________________ FedEx has almost no standards, at least in their ground department. I often saw drivers not wearing seat belts, bulk head door open, "nosing" into driveways etc. I've also seen them have "accidents" hit signs etc and just drive away. Now how this affects they company in terms of cost? No idea. They probably get away with a lot of costs haha. Not sure if FedEx uses a route building software. ___________________________________________________________________________________________________________________________________________ Customer perception - UPS is hands down viewed in a better light (at least in the US). Customers were always complaining about FedEx and how they didn't show up for pickups, didn't meet their commit time etc. Businesses really do trust UPS to get it done and this can be reflected in our price. UPS charges a handsome premium and businesses still pay it. UPS drivers are required (for the most part) to be clean cut, have clean uniforms, etc. They have gotten laxed with standards over the past few years but they do run a tight ship. Shoes must be polished, only mustaches (cant extend below corner of mouth), no long hair, etc. This does have an affect on customer perception as it helps them feel like they are getting a constant service. And the ladies love them shorts ;) ___________________________________________________________________________________________________________________________________________ Lets talk markets and Amazon FedEx dominated international shipping. That is their bread and butter. However this leaves them far more exposed to tariffs than UPS. UPS dominates ground in the US hands down. They are doing a good job at leveraging their services and marketing to new customers. They have several small business initiatives but they really focus on getting large contracts with companies like Pet Smart, Target, Wal-Mart, Pottery Barn etc. When I left (just over a year ago) They were really pushing getting into the after market auto parts industry as they saw this as one of the fastest growing industries. I can't tell you how many leaf spring packs I delivered. Amazon and what it means to UPS and FedEx. Basically a big LOL. Amazon packages are used to fill empty volume in trucks which aren't completely full with items from factories, businesses, machine shops, etc. It's basically the cinnamon you sprinkle on top of the cream cheese you put on your bagel. I believe volume is in the 4-6% range. We often made pennies on the dollar delivering Amazon boxes and if a second attempt had to be made you were losing money for that package. I don't have details on contract pricing but I'm going to assume UPS was charging Amazon a decent sum. I do know that UPS is adjusting their pricing to "more effectively" charge Amazon as they were notorious for poorly packaging items or putting small items in large boxes, mislabeling weights etc. Well this was cutting into our profits. This is essentially the same for FedEx. Long story short, residential deliveries are very little profit. They are used to fill volume gaps in our package cars and basically put a little extra cheese on burgers. UPS and FedEx want to ship heavy and they want to ship in bulk. This is most effective at businesses. You do get furniture and say cleaning supplies for some homes which I'm sure are good profit. At the end of the day UPS FedEx and Amazon are in completely different markets. Amazon is not focused on manufacturing or machine shops. They want to deliver products from their website to homes. Drivers in minivans will not be able to go to the local factory and pickup 40 boxes of hardware. So until you see Amazon begin picking up at locations like this I would not be worried about them at all. ___________________________________________________________________________________________________________________________________________ Investment wise. I like both FedEx and UPS. I like UPS because of their strong presence in the US and how they are less reliant on international shipping (which they are actively expanding too). But I like FedEx from a operating cost perspective as their fixed expenses are lower than UPS. That pension obligation will eventually come knocking on the door at UPS. I'll try to do more digging into that area if anyone is interested. Cheers!

You have peaked my interest with this. Any quick insights you have about this company?

I followed this stock closely about a year ago and almost pulled the trigger on it. Fell off my radar for awhile but seeing this post has me interested again. I think the "pawn" business model will always be around. And if a downturn happens in the economy you can be sure this company will thrive. I view it almost as a hedge. The price point is certainly attractive and management seems a little more solid on direction. I think the LA expansions will be a good thing (as long as they are the right stores). Not sure if I'll take a position yet but I'm certainly thinking about it. Seems market sentiment is on the precipice of changing direction. But who knows!

Yeah I really like this aspect. It can be rough at first but when you get large partners (especially in finance) this could rapidly expand their customer base. Lots of financial institutions like to use products from the same provider for simplicity reasons.

Link to Aite Report https://www.miteksystems.com/aite-aim-whitepaper Observations from ER. Agilisys I believe their expansion into the casino/gaming industry will prove to be vital and lucrative as online gaming regulations relax causing an influx of "couch gamblers" from mobile devices. Growth and Cash Flow They have continued to be on par with their growth estimates and cash flow. During the conference call someone asked why cash flow was slightly less this quarter than the previous two. Jeff responded by saying it was due to bonus payout, acquisition and other standard expenses. And that moving forward we should continue to see similar growth. This was encouraging. Competition Mobile check deposits are completely cornered by them. There certainly is other competition out there (Listed in linker Aite Report). Mitek is regarded as the "best in class" currently. However in my opinion they need to expand their geographical influence to Asia. Growth I like that growth is not entirely depended upon their marketing efforts. A lot of it is organic through their "partners" or "customers" that utilize their system. However I'm not sure if I like their pricing strategy as it focuses on volume rather than per transaction such as some competitors. However they did take a few questions regarding price leverage and whether or not they would exploit this. Its something they are looking into, specifically in Mobile Check Deposits. All in all I think it was a good solid ER, Fundamentals still look strong as well as guidance. However the competition is there and I hope Mitek can continue to hold an edge. I think they have an advantage in the financial industry over competition which is a key focus for them. I personally would like to see them expand into gov't related services. States are clearly headed towards virtual drivers licenses etc. I believe there is room for more than one company in this field. The key is picking the right industries to target.