The Trends to Watch as Traditional Retailers Struggle

Chris Versace

Chris Versace is a financial columnist and equity analyst with more than 20 years of experience in the investment industry.
[unhappy Christmas shopper]

We’ve started to hear the fallout from the 2013 holiday shopping season during the last few weeks. Let me tell you, it’s not looking pretty. A number of retailers — Sears, The Gap (GPS), JC Penney (JCP), American Eagle Outfitters (AEO), Bed Bath & Beyond (BBBY) and Pier 1 Imports (PIR), among others — cut their respective outlooks due to disappointing holiday season. That news has been followed with dire stories about the state of Sears, as well as fresh layoffs and store closures by the struggling JC Penney. The consumer electronics front did not fare much better, given dire results from Best Buy (BBY) and hhgregg, Inc. (HGG).

To me, this news simply confirms the action that I alerted subscribers to during early November in my trading service, PowerTrader. Those subscribers netted big profits in the shares of United Parcel Service (UPS) and Visa (V), as well as a 229% return on the corresponding Visa option play that I recommended. The driver behind those recommendations was the intersection of my Cash Strapped Consumer PowerTrend and the shift to online shopping that is a part of my Always On, Always Connected PowerTrend. As I have shared with my subscribers, I love PowerTrend investing for a number of reasons and the only thing more powerful is when two or more PowerTrends intersect in a given company’s business.

As if the retailer news wasn’t enough, we’ve started to get, at best, mixed results when it comes to December. Alcoa (AA) kicked off the tepid results and soon was followed up by Dow components Goldman Sachs (GS) and United Health (UH) issuing weak results. Yet, companies like wireless semiconductor Skyworks Solutions (SWKS) reported better-than-expected results and traded higher following those results. Skyworks has been a solid performer for my subscribers during the last few months, not just because of its key position with the who’s who in smartphones and tablets, but also because it is primed to ride the wave of The Connected Home, The Connected Car, wearables and, as John Chambers of Cisco (CSCO) calls it, The Internet of Things. That makes the company a pole-position play on my Always On, Always Connected PowerTrend.

It is easy to get lost in the news flow of what company said what and which company beat or missed expectations. As my subscribers have learned during the last few years, there is a different way to invest… the PowerTrend way that looks at the intersection of economics, demographics, psychographics and technology to see what is ahead and invest in the companies that are primed to benefit, while sidestepping those that will get crushed. In many ways it’s like hockey great Wayne Gretzky said — “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

Come invest with me and let’s get ahead of the curve and the herd!

PowerTalk with Moxtra — The Next Phase in Connectivity and Productivity
Joining me on PowerTalk this week is Subrah Iyar, the former co-founder and CEO of WebEx Communications. He served as that company’s chairman and CEO through its initial public offering (IPO) and 2007 acquisition by Cisco Systems (CSCO) for $3.2 billion. Today, Subrah and I are talking about his latest company, Moxtra, a technology company focusing on productivity and collaboration solutions.

Ever since PowerTalk began, I’ve spoken with leaders at a number of companies that are benefitting from the shift toward mobile, as well as the productivity driver that is connectivity. Being able to share information is a driving force in this connected and increasingly mobile world, not only for the enterprise market, but also for the consumer. We’re seeing companies like Microsoft (MSFT), Google (GOOG), Dropbox, Box and others bring collaboration services to market, but collaboration also raises security concerns, particularly for the business community. On the consumer side, companies like Snapchat and Glide, along with Facebook’s (FB) Instagram and Twitter’s (TWTR) Vine applications, are riding the transition from voice and text to video and video chat.

Imagine if there was one company that did all of this — and it worked no matter where your data was stored and no matter what device or platform you were using, whether Apple’s (AAPL) iPhone, Google’s (GOOG) Android or a Microsoft Windows-powered smartphone or tablet. Well there is, and it’s called Moxtra. In many ways, Moxtra is set to do to collaboration what Blackberry (BBRY) first did for email.

Click here to listen to my one-on-one conversation with
Subrah Iyar of Moxtra

In case you missed it, I encourage you to read my PowerTrend Brief from last week about how to take advantage of the coming spike in beef prices. I also invite you to comment in the space provided below.

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