TopGun^® Press

Brendan Wood International Investor Conviction Intel – Consumer – December 2024

December 9th, 2024 by TopGun Press

New York, NY, (TopGun Press)

Below are some of the most topical Consumer Stocks on the BWI Shareholder Confidence Index based on our daily chats with global investors:

Nestle, Chipotle Mexican Grill, Nike, Inc., North West Company & Five Below

Which Shareholder Confidence Metrics have had the biggest change YE 4Q 2024 at December 9 versus YE 3Q 2024?

Nestle

Decreased Confidence in: CFO, Strategy, Momentum of Investor Confidence, CEO and Commitment to Own

What is The BWI Panel Saying About Nestle?

“Nestle’s new CFO, Anna Manz, has only been in the business for a short period of time. Francois-Xavier Roger was very well-regarded; he was the voice of Nestle when it came to talking to investors. It was a big loss for Nestle and it will take time for Anna to establish her credentials. It’s not helpful that Nestle is disappointing. It’s not her fault, but of course that is part of the whole thing. They have had to reduce the earnings guidance recently.”

“Nestle’s new CEO, Laurent Freixe, will need to show that he can walk the talk.”

“I am impressed with how quickly Nestle’s board reacted and changed the CEO. It’s not something that I would expect from a board like Nestle because they are not very proactive.”

“The confidence in Nestle is broken, but the company is not.”

“Nestle has been downgrading their numbers; I’m not convinced on the short-term growth.”

Chipotle Mexican Grill:

Increased Confidence in: Short Term Growth Potential, Senior Management, Balance Sheet, Strategy and Long Term Growth Potential

What is The BWI Panel Saying About Chipotle Mexican Grill?

“Chipotle will have a clean earnings cycle in the short term.”

“Chipotle has zero debt on the balance sheet. The ROIC on the incremental store is increasing. The ROIC has improved from 10% to 21% from 2019 to today. I don’t understand what else you would want them to do with their balance sheet other than maybe having some more share repurchases. But you have to manage the brand for the long run.”

“Chipotle is going to be one of the best positioned in the next year.”

“Brian Niccol came in and helped save the day for Chipotle because they had some weaknesses. They don’t have those weaknesses anymore. He has fixed operations and their level of discipline. You don’t need a turnaround in order to run the business anymore and it’s not a very hard job anymore.”

“I love Chipotle’s new CEO, Scott Boatwright. He has proven from his time on the bench that he is going to be a great leader. Investors want to give him the benefit of the doubt.”

Nike, Inc.:

Decreased Confidence in: Strategy, CEO, Balance Sheet, Senior Management, Board and Momentum of Investor Confidence

What is The BWI Panel Saying About Nike, Inc.?

“Nike’s new CEO, Elliott Hill, has worked at the company for most of his career. He is not someone who is totally new to the space, which is positive. However, he hasn’t been through a big transformation at the company, and when you have a turnaround it’s always nice if the person has gone through something similar. Elliott also doesn’t have the track record of leading a company, so we will see how it goes.”

“I agree with the management change at Nike, obviously. However, we don’t have much information on what they are going to do, how they are going to do it and when they are going to do it. We don’t really know what the strategy is right now.”

“Nike’s board should have seen earlier that some of the things they were doing were not really working.”

“Nike was not investing enough in innovation and marketing.”

“Some of the strategies that Nike was going after have had unintended consequences. They were focusing too much on selling direct to consumer. They changed their marketing strategy from supporting their brand with very large campaigns and are targeting their consumers directly. It didn’t really work out because if you don’t support your brand awareness and elevation, it’s hard to maintain the brand loyalty.”

North West Company:

Increased Confidence in: Long Term Growth Potential and Price Appreciation Potential

What is The BWI Panel Saying About North West Company?

“North West is going to be lumpy in terms of growth; the timing is going to be unpredictable.”

“North West is a beneficiary of the spending that is going to be done in the North in the long term.”

“Investors have definitely been getting more interested in North West. There are a huge number of government stimulus programs that are going to be entering their markets over 10 years. It’s a huge amount of dollars and it’s going to lead to a lot of spending in their stores.”

“If you look at North West’s share price, they have done really well recently. It’s a $2 billion company. As a grocery store in the North, they have insane pricing power because they are the only shop in town. They sell groceries, ATVs and ski-dos because it’s so cold up there. The government is spending a lot in stimulus in those markets. Their core customer is going to get a lot of money in the next 10 years and will just spend it in store. That is going to set North West up really well for the long term.”

Five Below:

Decreased Confidence in: CEO, CFO, Short Term Growth Potential and Momentum of Investor Confidence

What is The BWI Panel Saying About Five Below?

“The trend for Five Below over the past six months has become worse.”

“Five Below has been volatile. We were constructive on the name, but management’s ability to execute the store growth was not as good as we thought.”

“Five Below didn’t have a CEO until just recently. They have lost a lot of credibility.”

“Five Below missed on a bunch of quarters. They can’t get it right.”

“Five Below’s CEO, Joel Anderson, resigned. People have lost a lot of confidence in them.”

If you would like more detailed Shareholder Conviction Intelligence on Global Consumer companies, please contact Amanda Knott.

Click here for the Brendan Wood International Investor Conviction Intel – Consumer – September 2024

Click here for the Brendan Wood International Investor Conviction Intel – Consumer – Starbucks CEO Transition

Click here for the TopGun Investment Minds – Best of the Best – US Consumer Sectors 2024

About Brendan Wood International:

Brendan Wood International (BWI), formed in 1970, is a private advisory group which originates performance investigation programs in the capital markets. Relying on its real time intelligence, BWI advises public companies, institutional and activist investors, investment banks and broker dealers on strategy, performance and recruitment of TopGun talent. Big cap companies looking for comprehensive investor confidence data on their organizations are likely to discover that Brendan Wood partners consult with their investors non stop year round. There are 2000+ live consultations with investment professionals overseeing +/- $60 trillion invested in the +/- 1400 big cap companies on the BWI Index. Investors depend on BWI to quantify the demand side of the investment industry, including the name by name research sales and trading professionals who influence investor demand. The firm’s partners have formally presented at 1000+ C level strategy meetings and corporate off-sites in fifty cities. Brendan Wood founded the exclusive TopGun Club, a performance based institution.

Disclaimer:

We wish to emphasize that all reports, evaluations and assessments contained herein, represent Brendan Wood International’s subjective judgment and opinions, based on our years of experience and on information obtained by us in the course of our research. Much of the factual information contained in the reports has been obtained by us from third parties on whose responses we have relied in good faith, independent verification by Brendan Wood International being, under the circumstances, impossible. While we believe that you will find our reports to be an invaluable tool in formulating your own strategies and judgments, the foregoing should be borne in mind. This report is not meant as investment advice and should not be interpreted as advising on the value of a company’s securities, the advisability of investing in, purchasing or selling any company’s securities or any other conclusion relating to investment/divestiture of a company’s securities. Finally, this report is not intended as an offer or solicitation for the purchase or sale of any company’s securities.