Investment Ideas

Investment Ideas from Predictive Customers

Non-correlated investment research & strategy

Consumer behaviour is changing at such a pace that expert networks and channel checks can no longer keep up. Lepere Analytics is a direct line to the Predictive Customer™. It is the ultimate channel check.

The importance of brand and reputation in driving company performance is growing. The gap between investors who buy companies and consumers who buy brands is widening. Lepere Analytics bridges this gap by predicting brand momentum.

Harley Motor

Harley-Davidson
Case Study

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Harley-Davidson Case Study

Harley-Davidson’s competitive momentum dropped significantly from +41.8% in September 2008 to +14.4% in April 2009 signalling underperformance. In the two months following the reading, the stock lagged the S&P 500 by 29.4%. The next reading in July 2009 showed a further downward move in momentum, to +13.7%, pointing to continued underperformance; HOG lagged the S&P by 6.4% in the two months following. March 2010’s poll showed Harley rebounding with momentum of +36.7%, and strong growth factor – two months past the reading, the stock beat the S&P by 14.1%.

The company’s June 2010 momentum moderated but was still positive at +32%, indicating continued outperformance, and HOG lead by 7.5% in the two months post polling. For the September 2010 reading, Harley’s momentum and growth factor showed little change, and it maintained its outperformance (6.5%) versus the market. The next measurement period in December 2010 again saw little change from previous strong momentum and growth factor scores, and as signalled, the company continued to outperform in the two months following the poll, beating the S&P by 11.1%.

Under Armour Logo

Under Armour
Case Study

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Under Armour Case Study

Under Armour’s inaugural March 2010 poll showed a very strong +67.5% competitive momentum, ranking third of 413 companies and indicating significant outperformance in the next three months. UA rose +27.2%, strongly outperforming the S&P 500 which was 3.1%. Under Armour’s momentum retreated slightly in the June 2010 reading to +60.6% and maintained a very high #4 rank pointing to continued outperformance. The stock in the next three months gained +27.3%, again beating the S&P by +5.5%.

The company’s competitive momentum showed little change in September 2010, +59.4%, and edged up in its rank to #2, again signalling market outperformance. UA’s strong performance, + 20.1% outpaced the S&P, +5.0% in the three months post poll. December 2010’s poll showed UA with continued strong momentum of +68.7%, and the signalled strong outperformance played out: the stock moved up +23.3% in the following three months versus a +3.8% gain for the S&P. Under Armour’s competitive momentum retreated to +58.2% in March 2011 with its rank slipping to eighth. Though strong readings, the movement indicated a moderating upward stock move. In the three months following, UA posted a +8.0% gain versus the S&P’s loss of -1.3%.

MasterCard Logo

MasterCard
Case Study

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MasterCard Case Study

Though MasterCard’s competitive momentum dropped slightly from +32.2% in April 2008 to +27.7% in September 2008, it’s Growth Factor™ rank, a measure of revenue potential relative to its competitors (e.g., Visa, Discover, American Express), rose during that time period signalling outperformance. In the three months following the reading, the stock outperformed the S&P 500 by 3.16%. For the period September 2008 to April 2009, MasterCard’s momentum and growth factor plunged signalling future relative weakness. The stock underperformed the S&P by -7.37%.The next measurement period (April 2009 to July 2009) saw an upside reversal in the company’s measures and in the three months following the reading MA outperformed by 7.95%.

Momentum and growth factor signals were accurate in two of the next three periods. July 2009 to March 2010’s sharp drop presaged a -9.58% underperformance by MasterCard vs the S&P, while an upward move in March 2010 to June 2010 signalled outperformance (+1.54%) in the three months following the reading. In June 2010 to September 2010 the company’s momentum and growth factor edged lower but in this case both MA and the S&P advanced, +6.6% and +5.0% respectively.

Starbucks

Starbucks
Case Study

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Starbucks Case Study

Starbucks’ competitive momentum dropped from -12% in April 2008 to -57% in September 2008, far behind category leader and competitor Dunkin Donuts. Dunkin scored April 2008 momentum of +65% and September 2008 of +54%. The sinking momentum predicted moves in Starbucks’ stock price: it began 2008 trading above $20 per share, and by November had fallen to just over $7 per share.

As Starbucks recalibrated their strategy to focus on service and quality, momentum began to reverse: July 2009 was -47% and signalled an upward stock move. By October, SBUX was again trading above $20. By 2010 momentum, though still negative, jumped to -28% in March, then in June 2010 to -12%; the stock moved higher, trading above $30 in November. December 2010 momentum showed a positive +7% predicting another upward move; the stock traded above $37 in March 2011. Starbucks’ momentum stayed in the plus column in March 2011 but dropped to +4%. By the end of May 2011, the stock edged downward to the $35 level.

Weightwatchers

Weight Watchers
Case Study

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Weight Watchers Case Study

Weight Watchers competitive momentum moved upward from a reading of +16.1% in September 2010 to +20.8% in December 2010, signalling outperformance in the three months following the December poll. The stock moved sharply higher in that time period, +67.0% versus +3.8% for the S&P 500.

WTW’s momentum moved up again in the March 2011 poll to +21.0%, while nine competing brands in the category had negative scores. However, three competitors, Healthy Choice, Amy’s Kitchen and Lean Cuisine had stronger positive momentum, all greater than +30%. The brands owned by publicly traded companies all showed moves to the upside outperforming the S&P. Weight Watchers scored the largest gain, +10.7%, while ConAgra, corporate parent of Healthy Choice, registered a gain of +4.3%. Nestlé, corporate owner of Lean Cuisine, showed a gain of +1.89%.Performance for privately held Amy’s Kitchen was unavailable. The S&P lagged scoring a drop of -1.28% in the same time period.

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Case Studies

Harley-Davidson

Harley-Davidson case study

Harley-Davidson’s competitive momentum dropped significantly from +41.8% in September 2008 to +14.4% in April 2009 signalling underperformance. In the two months following the reading, the stock lagged the S&P 500 by 29.4%. The next reading in July 2009 showed a further downward move in momentum, to +13.7%, pointing to continued underperformance; HOG lagged the S&P by 6.4% in the two months following. March 2010’s poll showed Harley rebounding with momentum of +36.7%, and strong growth factor – two months past the reading, the stock beat the S&P by 14.1%.

The company’s June 2010 momentum moderated but was still positive at +32%, indicating continued outperformance, and HOG lead by 7.5% in the two months post polling. For the September 2010 reading, Harley’s momentum and growth factor showed little change, and it maintained its outperformance (6.5%) versus the market. The next measurement period in December 2010 again saw little change from previous strong momentum and growth factor scores, and as signalled, the company continued to outperform in the two months following the poll, beating the S&P by 11.1%.

MasterCard

MasterCard case study

Though MasterCard’s competitive momentum dropped slightly from +32.2% in April 2008 to +27.7% in September 2008, it’s Growth Factor™ rank, a measure of revenue potential relative to its competitors (e.g., Visa, Discover, American Express), rose during that time period signalling outperformance. In the three months following the reading, the stock outperformed the S&P 500 by 3.16%. For the period September 2008 to April 2009, MasterCard’s momentum and growth factor plunged signalling future relative weakness. The stock underperformed the S&P by -7.37%.The next measurement period (April 2009 to July 2009) saw an upside reversal in the company’s measures and in the three months following the reading MA outperformed by 7.95%.

Momentum and growth factor signals were accurate in two of the next three periods. July 2009 to March 2010’s sharp drop presaged a -9.58% underperformance by MasterCard vs the S&P, while an upward move in March 2010 to June 2010 signalled outperformance (+1.54%) in the three months following the reading. In June 2010 to September 2010 the company’s momentum and growth factor edged lower but in this case both MA and the S&P advanced, +6.6% and +5.0% respectively.

Under Armour

Under Armour case study

Under Armour’s inaugural March 2010 poll showed a very strong +67.5% competitive momentum, ranking third of 413 companies and indicating significant outperformance in the next three months. UA rose +27.2%, strongly outperforming the S&P 500 which was 3.1%. Under Armour’s momentum retreated slightly in the June 2010 reading to +60.6% and maintained a very high #4 rank pointing to continued outperformance. The stock in the next three months gained +27.3%, again beating the S&P by +5.5%.

The company’s competitive momentum showed little change in September 2010, +59.4%, and edged up in its rank to #2, again signalling market outperformance. UA’s strong performance, + 20.1% outpaced the S&P, +5.0% in the three months post poll. December 2010’s poll showed UA with continued strong momentum of +68.7%, and the signalled strong outperformance played out: the stock moved up +23.3% in the following three months versus a +3.8% gain for the S&P. Under Armour’s competitive momentum retreated to +58.2% in March 2011 with its rank slipping to eighth. Though strong readings, the movement indicated a moderating upward stock move. In the three months following, UA posted a +8.0% gain versus the S&P’s loss of -1.3%.

Starbucks

Starbucks case study

Starbucks’ competitive momentum dropped from -12% in April 2008 to -57% in September 2008, far behind category leader and competitor Dunkin Donuts. Dunkin scored April 2008 momentum of +65% and September 2008 of +54%. The sinking momentum predicted moves in Starbucks’ stock price: it began 2008 trading above $20 per share, and by November had fallen to just over $7 per share.

As Starbucks recalibrated their strategy to focus on service and quality, momentum began to reverse: July 2009 was -47% and signalled an upward stock move. By October, SBUX was again trading above $20. By 2010 momentum, though still negative, jumped to -28% in March, then in June 2010 to -12%; the stock moved higher, trading above $30 in November. December 2010 momentum showed a positive +7% predicting another upward move; the stock traded above $37 in March 2011. Starbucks’ momentum stayed in the plus column in March 2011 but dropped to +4%. By the end of May 2011, the stock edged downward to the $35 level.

Weight Watchers

Weight Watchers case study

Weight Watchers competitive momentum moved upward from a reading of +16.1% in September 2010 to +20.8% in December 2010, signalling outperformance in the three months following the December poll. The stock moved sharply higher in that time period, +67.0% versus +3.8% for the S&P 500.

WTW’s momentum moved up again in the March 2011 poll to +21.0%, while nine competing brands in the category had negative scores. However, three competitors, Healthy Choice, Amy’s Kitchen and Lean Cuisine had stronger positive momentum, all greater than +30%. The brands owned by publicly traded companies all showed moves to the upside outperforming the S&P. Weight Watchers scored the largest gain, +10.7%, while ConAgra, corporate parent of Healthy Choice, registered a gain of +4.3%. Nestlé, corporate owner of Lean Cuisine, showed a gain of +1.89%.Performance for privately held Amy’s Kitchen was unavailable. The S&P lagged scoring a drop of -1.28% in the same time period.