Summary Points: In the absence of company-issued guidance for 2023, we wanted to fill the void. Our first report in this series analyzed top-down trends to arrive at a logical starting point for company P&Ls. We dug into labor market conditions, excess savings, the ‘wealth effect’ and other factors, to arrive at an estimate for quarterly PCE. This report builds on that analysis by analyzing industry and company-level dynamics. We studied 10 categories of consumption,

Summary Points Earnings for consumer stocks have been all over the map, but there’s been one common element — when it comes to offering 2023 guidance, most companies have demurred. We’re going to try and fill that void with a two-part series. This, our first report, focuses on the macro backdrop, which is an important place to start. After all, “macro uncertainty” is the primary reason companies have balked. Our second report will overlay industry

Summary Points: I launched Rubinson Research 9 months ago. So far, we’ve published 18 reports on substantive topics including: inventory, the “wealth effect”, the low-end consumer, housing, Amazon, pricing power, and more. We’ve also sent out 12 mini reports to clients and hosted 2 webinars. This report is a summary of our November 7th webinar. If you’d like to watch my animated delivery of the content, here is a link to the replay. A Perspective

Summary Points: The consumer is still spending at a decent clip. However, so long as inflation is Enemy #1, investors may interpret that as bad news, a sign that the Fed’s job isn’t done. The best outcome for stocks would be if inflation were to moderate before the consumer cries “uncle”. With wages and inflation at a standoff, the consumer will need an assist from its balance sheet if it’s to outlast inflation. Households are

Summary Points: We built a new framework called the Idea Generator. The goal is to help clients pick consumer-oriented stocks in an uncertain environment. We model 50+ stocks using four underlying elements – Supply and Demand, Valuation, Operating Leverage, and Financial Leverage. The outputs for each element are shown in tabular form below. The overall rankings are shown in Figure 17. On the back of this analysis, we’ve made a number of adjustments to our

Summary Points Jerome Powell has all but put a target on the back of the U.S. consumer. He’s squarely focused on taking the froth out of the labor market and home prices – two key underpinnings of PCE. Our PCE Predictor points to slower spending growth now that we’ve incorporated a decline in home prices and a weaker outlook for employment into our model. Excess savings still provide a meaningful buffer, though, offering 2 percentage

Summary Points Consumer staples have been a great place to hide. Over the past 12 months, the stocks have outperformed the broader market by +25 percentage points, one of the best stints on record. On a multi-year basis, the sector’s performance is nothing to write home about. The question we pose in this report is where the staples stocks will go from here? It’s hard to separate a view on staples from one’s macro-economic outlook.

Summary Points: Managing inventory is a tough balancing act in normal times. Over the past few years, it’s been a nightmare. Demand trends were upended during the pandemic and that coincided with seismic shifts in the supply chain. The net effect is that inventories have been on a roller coaster ride, and the latest indication is that many consumer-facing businesses are swimming in inventory. The aim of this report is to see which companies are

Summary Points: Consumer companies are sending a lot of mixed signals. Companies that’ve reported shortfalls have been quick to blame macroeconomic factors, but we are skeptical of those claims. We think the bigger story is a return to normalcy, and some companies didn’t see it coming. The consumer is undoubtedly facing some stiff headwinds, but we’ve been more optimistic than most about their spending potential. Companies with pricing power are likely to fare best in

Summary Points We launched a model portfolio called the Consumer Beacon two months ago and from time to time, we intend to publish reports featuring stocks in the portfolio. This one focuses on Amazon. We aim to offer a differentiated view of the company’s fundamentals and valuation. e-Commerce penetration is taking a pause after a period of breakneck growth. It could take another year or so for the channel to grow into its natural penetration