Jeff Yastine recently recommended a few stocks that could boost investors’ earnings in 2018. The Banyan Hill Publishing editorial director suggested these investments because all three companies have the potential to challenge Amazon’s retail dominance. Yastine also believes that larger Amazon rivals might purchase these businesses in an effort to improve their competitiveness.
During December, Jeff Yastine urged investors to buy stocks that could benefit from upcoming acquisitions or mergers. He highlighted this strategy as one of the most lucrative opportunities in the year to come. A month earlier, the financial expert praised Brazilian aircraft manufacturer Embraer. He noted that it had succeeded in signing a number of commercial and military contracts.
It didn’t take long for Yastine’s recommendations to help investors. In late December, Boeing revealed that it had begun negotiating a possible merger with Embraer. The South American company’s stock value immediately surged by nearly one-third. Like many mergers, this transaction will take time to finalize. The Brazilian government owns a sizable portion of Embraer and doesn’t want a foreign corporation to gain full control.
In early February, Embraer and Boeing had nearly reached a mutually acceptable deal. They plan to create a new firm that combines the two manufacturers’ commercial aircraft divisions. Military production will remain separate, and the combined company intends to establish its headquarters in Illinois.
The Boeing-Embraer deal represents a growing trend. Technology, media, chemical, telecom and insurance companies continue to acquire rivals and complementary businesses at a rapid pace. Despite government scrutiny, the same trend has begun to affect other industries as well. It’s vital for investors to think about probable acquisitions before purchasing stock.
After emphasizing the importance of mergers in today’s economy, Jeff Yastine shifted his focus to retailers. The investment expert learned about this sector while he reported on big-box stores for the “Nightly Business Report.” He predicts that multiple large corporations will buy smaller retail companies and strive to lure away some of Amazon’s customers.
Yastine encouraged investors to buy Kroger Co. (KR) shares because the well-known grocery chain could help a rival compete against Amazon’s Whole Foods stores. Kroger’s stock value fell by about one-third in recent months; shareholders worried that Amazon would hurt the supermarket’s sales. Yastine sought to downplay their concerns. He explains that Kroger has taken the right steps to successfully compete with the Seattle retailer.
In June 2017, the financial guru criticized Amazon for merging with Whole Foods. He said that this transaction would lead to serious problems. Seven months later, Yastine authored a TalkMarkets.com article about the merger’s effects. He warned that the quality of Whole Foods products had started to decline while prices only dropped slightly.
Although Whole Foods sought to publicize recent cost reductions, a comprehensive analysis revealed insignificant improvements. Researchers checked the prices of more than 100 products at an East Coast supermarket. They discovered that the items only cost 1.1 percent less than they did when the merger took place. High prices make it difficult for the company to compete with fellow offline retailers.
After describing Amazon’s weaknesses, Yastine highlighted a few of Kroger’s strengths. It operates almost 3,000 supermarkets across America. The stores plan to add automated checkout systems during 2018; this will help them match Amazon’s low overhead expenses. Kroger has also become a major source of organic products. These foods have gained popularity as shoppers seek to improve their health.
Advice on eBay
Jeff Yastine advises investors to consider purchasing eBay stock (EBAY). The well-established auction website continues to attract a wide range of buyers and sellers. Shoppers can find items ranging from antique toys to new furniture. It ranks among the top online retailers and operates multiple warehouses that provide product fulfillment services.
While eBay already has the potential to surpass Amazon in some segments of the retail sector, it could become a more potent adversary if a top internet company acquires it. Google might counter Amazon with greater success after purchasing a major online retailer. If it becomes a subsidiary, eBay could benefit from abundant free advertising in Google search results.
Finally, Jeff Yastine recommended buying stock in W.W. Grainger (GWW). Numerous radio listeners are familiar with this business-to-business firm’s memorable advertisements. Grainger sells its merchandise to commercial and industrial clients. Among other things, it offers shelves, safety equipment, office products and janitorial supplies. The company’s New York Stock Exchange symbol is GWW.
Grainger’s stock price recently fell because some shareholders thought that the business couldn’t compete with Amazon. Nevertheless, Yastine points to this firm’s infrastructure when he explains why it appeals to potential buyers. If a retailer wants to challenge Amazon, it needs to own distribution and storage facilities across the nation. Many businesses could benefit from purchasing Grainger to gain these assets.
Even if no one acquires them, Jeff Yastine believes that investors will profit from holding Kroger, Grainger and eBay stock. All three firms generate substantial profits, and two companies provide shareholders with fairly generous dividends. Investors can see further advice from Yastine by reading Total Wealth Insider. He edits this newsletter and regularly contributes to other Banyan Hill publications.