Fitbit Fits in at Google

...watch out Apple, there's a not-so-new smartwatch in town.

Tuesday, October 29th | Issue No. 125

MARKET MOVES...

S&P 500: 3,039.42 +16.87 (+0.56%)

Dow Jones: 27,090.72 +132.66 (+0.49%)

Nasdaq: 8,325.99 +82.87 (+1.00%)

PRE-MARKET PLAY...

(listen to PAPERTRAIL playlist)

WHEN THE ALPHABET BOYS COME KNOCKIN'...

It's best to answer the door.


Google's parent company, Alphabet (NASDAQ: GOOG/GOOGL), just put in an offer to buy Fitbit (NYSE: FIT) and selling the company may be its only hope.

WHY THIS IS HAPPENING...

Google is always looking for ways to be better than rival gang Apple (NASDAQ: AAPL) and this time it's no different with the plans jump-in wearables company Fitbit. The amount from the deal hasn't hit the streets yet but just know the ear hustlers are keeping tabs on it.


Everyone knows that Apple thrives off of its loyal fanbase like the Beyhive at Beychella which is why you see most folks that have an iPhone also have a Macbook, Apple Watch, AirPods, etc. Google is yearning for that kind of love so it can service its customers wherever they are and having a well-known smartwatch in the mix will help with that.


This deal makes sense for Fitbit as it's been trying to phone-a-friend for a while now to save face and Google finally answered the hotline bling. Fitbit has been struggling as Apple has taken over about half of the global market smartwatch scene forcing Fitbit to tell investors, "I'm going down," like Mary J. Blige. The stock jumped like a Kris Kross video yesterday with shares going up as much as 30%.


Alphabet stock dropped yesterday after reporting an earnings miss.

THE RETURN...

Alphabet and Fitbit stocks are up 20% and 1%, respectively, this year.

FOR THE NEWB IN YOU...

A subsidiary is simply a company that is at least 50% owned by another "parent" company. (ex. Google is a subsidiary of Alphabet.)


Top line is fancy talk for total revenue and bottom line is a company's net profit. During a stock's earnings report, Wall Street projects top and bottom line goals for companies and when they don't achieve them, it's called a "miss" but when they do it's a "beat." (ex. "Alphabet reported a beat on top line revenue but a miss on bottom line profit.")

FIRST TIME IS A CHARM...

But can you keep it up?


Beyond Meat (NASDAQ: BYND) shared its first earnings report yesterday since going public and the results were beyond amazing.

WHY THIS IS HAPPENING...

Beyond Meat reported revenue that was $10MM more than expected and more than doubled the profit expectations with $4.1MM instead of $2MM. This is great news considering this time last year, the company was in the hole $9.3MM. Revenue is up 250% with both traps (grocery stores and restaurants) jumping. Talk about making the dope boys go crazy.


Restaurants have been a major plug to the people as Beyond Meat continues to find corner boys to distribute its product like McDonald's (NYSE: MCD), KFC (NYSE: YUM), Dunkin' Brands (NASDAQ: DNKN), and Taco Cabana (NASDAQ: FRGI) just to name a few.


Despite the success, the competition is looking to take over Beyond Meat's territory and investors ain't with it. Impossible Foods continues to solidify its distribution network in grocery stores and restaurants as well while major food companies are starting branch out on their own like Kellogg's (NYSE: K) Incogmeato plant-based line.

THE RETURN...

Beyond Meat stock is down 55% since July but is up 58% in total this year.

FOR THE NEWB IN YOU...

Not sure what top and bottom lines are? Scroll up for a quick lesson.

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ALL EYEZ ON...

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AND NOW A WORD FROM OUR SPONSOR...

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MORE PAPERTRAILS...

DID YOU KNOW...

What percentage of Americans carry a credit card balance? (answer below)

WHO'S GOT NEXT...

Companies reporting earnings today about how much paper they're stackin' (or losing) and new things to come:


  • Electronic Arts (NASDAQ: EA)

  • Boston Beer Company (NYSE: SAM)

  • ConocoPhillips (NYSE: COP)

  • Merck (NYSE: MRK)

  • General Motors (NYSE: GM)

  • Denny's (NYSE: DENN)

  • Grubhub (NYSE: GRUB)

  • Pfizer (NYSE: PFE)

  • Shopify (NYSE: SHOP)

  • Steve Madden (NASDAQ: SHOO)

WATCH ME WORK...

10/28 - Sold 2 American Airlines (NYSE: AAL) put options for $348 loss.

PAPERTRAIL Pro with monthly portfolio reports coming soon.


Disclosure: The author of this issue owns stock of Apple and Fitbit.

SHARE THE WEALTH...


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NOW YOU KNOW...

About 62%.

Dr. Eric Patrick

Managing Editor | Apple Watcher

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Disclosure: This editorial is by no means a solicitation to buy or sell any of the above-mentioned securities. It is merely a means for educational purposes. All investors are subject to their own research and due diligence. This post may contain affiliate links and we may receive commissions for purchases made through links in this post.

#investing #papertrail #google #fitbit #beyondmeat

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