RECENT NOTES
9/11/15 REPLAY | GOING LONG UNFI BLACK BOOK
9/04/15 GIS | Sends the Jolly Green Giant Packing
9/02/15 HSY | THE CURRENT SET UP IS LEANING LONG
8/31/15 HAIN | LOW QUALITY & INCREASED BUSINESS RISK
RECENT NEWS FLOW
Friday, September 11
MNST | Board of Directors have authorized a new share repurchase program of up to $500mm (click here for article)
PEP / SODA | PepsiCo is expanding its distribution partnership with SodaStream (click here for article)
Thursday, September 10
MDLZ | Provided an update on cost savings initiative and reaffirmed 2015 guidance (click here for article)
Wednesday, September 9
FLO | Announced the acquisition of Alpine Valley Bread Company, for $120mm in cash. FLO anticipates FY16 sales for the Alpine business to be $85mm - $95mm, the business has been growing at a CAGR of 51% over the last three years (click here for article)
Tuesday, September 8
MKC | Plans to expand organic and non-GMO offerings in 2016 (click here for article)
Angie’s | Adding popcorn production capacity in Reno, NV as the competition in RTE-popcorn heats up (click here for article)
SECTOR PERFORMANCE
Food and organic stocks that we follow outperformed the XLP last week. The XLP was down -0.4% last week, the top performers on a relative basis from our list were B&G Foods (BGS) and United Natural Foods (UNFI) posting increases of +6.3% and +4.7%, respectively. The worst performing company on a relative basis on our list was Lifeway (LWAY), which was down -2.8%.
QUANTITATIVE SETUP
From a quantitative perspective, the XLP is bearish on a TRADE and TREND duration.
Food and Organic Companies
Keith’s Three Morning Bullets
Bets continue to mount on a Dovish Fed meeting…
- USD – US Dollar Index closed on its low for the wk (-1.1% on the wk) and is seeing follow through selling this morning vs. both Euros and Yens – what’s most interesting about this to me is that on 30-day correlation, SPX has a POSITIVE correlation to USD of +0.8 (meaning a Dovish Fed could be bad for stocks)
- JAPAN – Down Dollar is definitely bad for Japanese Stocks – that INVERSE correlation has not changed; Yen +0.3% took another -1.6% out of the Nikkei overnight – it’s -12.5% in the last month with the US Dollar -2.7% (and Yen +3.8%)
- UST 2yr – yield tested a “breakout” above 0.75% for the 6th time in 6 months last wk… and failed; back down to 0.71% on Dovish Fed spec this morning and, with Fed Fund Futures this low, I still think the Fed could train wreck macro markets if they tighten
SPX immediate-term risk range = 1; UST 10yr Yield 2.13-2.24%
Please call or e-mail with any questions.
Howard Penney
Managing Director
Shayne Laidlaw
Analyst
