MG's Profile

Thanks for the great read. While I agree with some of the earlier comments that Tesco’s recent performance has been good in light of Brexit-imposed challenges (and that the establishment of a dividend is a strong confidence-boosting signal), the composition of the results does show softness in its local market operations (specifically on the top line), and operating margins are being held up by international operations that have not seen the same difficulties. The fact that Tesco was able to perform on the margin front is impressive (and is likely a result of much of what was discussed in the article and Tesco being a dominant player in the British supermarket space), but the relatively low margin nature of the grocery store industry means that swings in sales can have a significant impact on company cash generation. In light of macroeconomic uncertainty that the company cannot control, the company needs to maintain a laser-sharp focus on both the supply and demand sides of the equation, focusing both on keeping COGS low and driving incremental organic revenue by applying the demand-generating tactics that Student suggested above. Bloomberg’s take on Tesco’s results can be found here: https://www.bloomberg.com/news/articles/2017-10-04/tesco-to-pay-first-dividend-in-3-years-as-profit-beats-estimates.

Ben, thank you for the informative read on an increasingly important topic. The media has continued to report (https://www.reuters.com/article/us-trade-nafta/nafta-talks-hit-wall-as-mexico-canada-push-back-on-u-s-demands-idUSKBN1DL0FL) that NAFTA talks are stalling, and while conversations are to continue into next Spring, achieving the “rebalancing” that the Administration is proposing is going to be significantly challenging for Mexico and Canada. This is further complicated by the fact that the Mexican general election is to take place on July 1, 2018, which introduces incremental uncertainty to equation.

While I agree with what has been said that a long-term perspective should be held (and, as a Canadian, had some of my worries assuaged by Sam’s commentary), I do think the uncertainty surrounding U.S. relations with Mexico in the short term warrant the decision to avoid investment in Mexico. Your point on diversification is well taken and I believe that your suggestion about considering export conditions when making investment decisions is very sound, but that strategy is likely best kicked off when the company has a clearer line of sight into the regulatory landscape (and potentially, more of an ability to effectively and productively lobby the relevant parties to support its decision-making).

Grace, you win the “best title” award! Thanks for the interesting read. I think Ryan and PC’s comments make a lot of sense, but I think the conversation needs to be had on a global scale as the issues related to avocado production are not solely endemic to North America. There are a number of instances – the below link being one of them – in other countries, such as Australia, of climate-related avocado crop failures.

http://www.abc.net.au/news/rural/2016-10-14/avocado-crop-lost-to-heat-stress/7932036

To PC’s point, I’m concerned that the level of corruption present in the avocado industry in Mexico may not give the “movement” strong enough legs on a global scale. I would argue that Avocados from Mexico should partner with similar food and vegetable groups in other regions to demonstrate the widespread nature of the problem and create transferable and applicable best practices for the industry. The next step would be to try to engage with the government to tackle the aforementioned systemic issues plaguing in the Mexican market – but that may be too uphill of a battle for the organization at this juncture.

Thanks for the great read. One of my key takeaways is that Sweetgreen’s sourcing strategy inherently places a limitation on its expansion plans (given the need to build local supply chains and market-specific menu development). The fast casual segment has seen significant investor interest and companies have been ascribed sky-high valuations upon going public – Shake Shack is a great example of that. The difference, however, is that Shake Shack’s store count growth has been enormous – year to date, the company has grown locations by 36%, and the combination of this growth with same-store sales momentum is a big driver of the multiples that investors place on the business. What will be interesting to see is how strong the resolve that Sweetgreen will be if/when it decides to go public, if it is faced with a trade-off between dollars coming in and maintaining a slow, steady, and deliberate expansion plan.

This concern could potentially be somewhat mitigated by the company demonstrating a tried-and-true ability to “go deep” in the geographies that it is currently in and market itself off of a “hub-and-spoke” model, but only time will tell if the strategy has to “evolve” to garner the favor of public market investors.

While I completely understand the rationale behind zero fund involvement, I would push the RHA to consider building out some infrastructure (which will require financial investment). The organization has seen tremendous growth and appears to be at an inflection point, where it is considering expanding its scope to new causes. In order for this to go smoothly, I believe that it is a) critical that RHA can attract top talent and b) increase its investment into technology, standardization, and sophistication – both of which will be more easily accomplished by taking on funding.

Profitable social enterprises are becoming increasingly common – and while I’m not suggesting that RHA go all the way there, I believe that both investors and consumers have become more accepting of funding models that that have aligned incentives and perform. I would be very reticent to expanding too quickly without having the right people, processes, and systems in place.

I recently read an interesting study on the Nonprofit Starvation Cycle – while not all of it is directly relevant to RHA at this stage, I think it’s worth a read in this context.

http://www.macc-mn.org/Portals/1/Document-library/Research/SSIR%20Nonprofit%20starvation%20Cycle%202009.pdf

Thanks for the informative write-up. Clever is doing great things and is helping to bridge the gap between those trying to improve the education system and students across the country.

Like you pointed out in the “Uncharted Waters” section, I do have concerns about the sustainability of Clever’s business model in light of increasing investment in ed tech by larger players. A few months ago, I came across this New York Times article (https://www.nytimes.com/2017/05/13/technology/google-education-chromebooks-schools.html) which outlines some of Google’s efforts in the classroom. Google’s dominance of the technological ecosystems of so many individuals and companies poses a significant threat to Clever. Google’s ability to integrate so much of the supply chain (that is, content / software ownership and development as well as hardware / platform delivery) could make a “one-stop” solution more preferable for schools. Additionally, while Clever’s domestic growth has been remarkable, other countries less familiar with the platform and the apps that it carries may default to a larger player. As such, it feels as though management should give some serious thought to exploring a partnership.