Cohn’s Exit Leaves Hard-Liners Ascendant in White House (BBG) Trade skeptics gain upper hand in White House as Cohn quits (Reuters) Trump Alienates Allies Needed for a Trade Fight With China (WSJ) Wall Street Frets About Losing White House Friends as Cohn Exits (BBG) How the House Could Change Hands (WSJ) South Korea's Moon says sanctions on North to stay, too early to be optimistic (Reuters) Kushner to visit Mexico after Trump tirades, testy phone call (Reuters) Republicans in tight races embrace gun control (Reuters) Banks Look to Break Government’s Hold on Student-Loan Market (WSJ) Berlusconi pledges to back League's Salvini as Italy's next PM (Euronews) Something’s Brewing: Coca-Cola Plans Its First Alcoholic Drink (WSJ) Goldman puts London staff on notice for German move by June (Reuters) Wells Fargo Is the Go-To Bank for Gunmakers and the NRA (BBG) Broadcom Pledges $1.5 Billion U.S. Investment to Ease Regulatory Scrutiny (WSJ) America Is Giving Away the $30 Billion Medical Marijuana Industry (BBG) How to Gain Power at Work When You Have None (WSJ) Exxon sees earnings doubling by 2025 at current oil prices (Reuters) Where Will Apple Put Its Fourth U.S. Campus? (BBG) Sri Lanka blocks social media as Buddhist mobs attack mosques (Reuters) Overnight Media Digest WSJ - Gary Cohn will resign from the White House after 14 months of serving as U.S. President Donald Trump's top economic adviser, days after Trump surprised his senior staff by announcing steel and aluminum tariffs that Cohn had opposed. on.wsj.com/2HdNgzE - Smith & Wesson's parent company American Outdoor Brands Corp said it was wary of adding "smart-gun" technology to its weapons, as investors push the industry to address safety issues in the wake of recent mass shootings. on.wsj.com/2HcEt11 - Pharmacy chain CVS Health Corp sold $40 billion of bonds Tuesday to help pay for its acquisition of health insurer Aetna Inc months before it needs the money, seeking to get ahead of an expected rise in interest rates and a flood of borrowing across the economy. on.wsj.com/2HabJGo - Two Republican chairmen in the House are asking the Justice Department to consider the appointment of a second special counsel to investigate matters related to how and why material gathered from a former British spy was used to spy on an associate of U.S. President Donald Trump. on.wsj.com/2H9fuLW - A buyers' group organized by investor Ron Burkle and publicly led by businesswoman Maria Contreras-Sweet said it called off a deal for Weinstein Co's assets less than a week after saying it would buy them by assuming $225 million of debt. on.wsj.com/2HbTnog FT - Public Health England said the calorie content of processed foods must be cut by 20 per cent by 2024, extending its official campaign against childhood obesity beyond sugar. - UK’s Foreign Secretary Boris Johnson threatened to ramp up punishment against Moscow if Russia is found to be involved in the incident involving former double agent Sergei Skripal. Russian embassy in London said they regretted that instead of a proper official clarification, Johnson chose to threaten Russia with retribution. - Paul Flowers, former chairman of Co-operative Bank, has been banned from working in UK financial services over his possession of illegal drugs and for using a work phone for accessing premium-rate sex chatlines on a company mobile. - Andy Haldane, Bank of England’s chief economist, said that the bank will create regional councils, made up of members of the public, to improve its understanding of the economy. NYT - The planned sale of the Weinstein Company collapsed yet again on Tuesday, when the investor group that had agreed to purchase the embattled studio said that it had called off the deal after receiving "disappointing information." nyti.ms/2HbPgZm - The vast majority of Americans expect artificial intelligence to lead to job losses in the coming decade, but few see it coming for their own position. And despite the expected decline in employment, the public widely embraces artificial intelligence in attitude and in practice, according to a survey that was conducted last fall and from which new findings were released on Tuesday. nyti.ms/2HabLhu - Gary Cohn, U.S. President Donald Trump's top economic adviser, said on Tuesday that he would resign, becoming the latest in a series of high-profile departures from the Trump administration. nyti.ms/2HcHnCS - As the Republican Party struggles to find its footing with the next generation of voters, several conservative college groups have banded together to champion something anathema to the party: a carbon tax. nyti.ms/2Fvvta5 Britain The Times - Melrose Industries Plc is facing fierce pressure to reveal legally binding commitments to protect jobs and invest in research and development if it succeeds in its hostile takeover of GKN Plc, the aerospace and automotive group. bit.ly/2FsU7rY - BSG Resources Ltd, a mining company controlled by Beny Steinmetz, the Israeli diamond tycoon, was placed in administration on Tuesday amid an escalating legal dispute over allegations that it engaged in bribery linked with a mining project in west Africa. bit.ly/2FuE5h5 The Guardian - Retailer Debenhams Plc is in talks to rent floor space to flexible-office provider WeWork, as it looks to scale back its high street presence. bit.ly/2Fr7MQr - Chancellor Philip Hammond will insist on Wednesday that Britain can overcome EU opposition and include financial services in a post-Brexit free trade deal. bit.ly/2FySyZL The Telegraph - Procter & Gamble Co is stepping up efforts to "take back control" from advertising agencies by investing more in internal analytics programmes – a move which will spell further trouble for ad giants WPP Plc and Publicis Groupe SA . bit.ly/2Ftd4KZ - Eurozone members have hit back at French plans for greater economic union in a strongly worded joint statement from finance ministers. bit.ly/2FtgJsf Sky News - Officials from the Financial Conduct Authority met key figures from the Investment Association last month to discuss ways of assuaging their concerns about a potential London flotation of Saudi Aramco. bit.ly/2FuPBJr - J Sainsbury Plc is facing opposition to a pay shake-up it says will give its 130,000 store staff a "leading rate" in the sector. bit.ly/2FsbbhT The Independent - UK businesses are drastically underestimating the amount of plastic packaging waste they produce while paying "barely anything" to deal with the problem, new research claims. ind.pn/2FtpToS
In a world in which a handful of tech companies which derive the bulk of their revenues from advertising are the market leaders, what happened to WPP Plc - the world's largest ad agency - this morning is particularly relevant: the company suffered its biggest one day crash since 1999, tumbling as much as 15%, after CEO Martin Sorrell again slashed the company's profit outlook and predicted another year of no growth, in what Bloomberg dubbed a jarring reminder to investors "that the advertising industry is undergoing its most dramatic upheaval in decades." To be sure, WPP's woes are hardly new, with the company tumbling almost as much back in August when it reported dismal earnings and unveiled "terrible" guidance. This time it was even worse. WPP unveiled that its long-term earnings growth will be as little as 5% and twice that at best, slashing its previous guidance of as much as 15%. The year got off to a “slow start,” WPP said, continuing a trend from 2017 that saw flat margins and sales. Investors responded by sending shares down by the most in 19 years, resulting in a brief trading halt. In sympathy, Publicis Groupe SA, WPP’s French rival, dropped as much as 6.1%. “There’s a real sense of shock and awe at what’s happened to his business model,” media analyst Alex DeGroote told Bloomberg. “This is a stark reminder of the significant challenges WPP faces.” On one hand, the WPP crash may seem good news for its digital competitors as the steep slump of the industry leader is the most dramatic sign yet of the deepening crisis facing Sorrell as companies like Google and Facebook "hollow out his core business." On the other hand, and more ominous to the tech vanguards, WPP's collapse may be a harbinger of broad weakness coming to the advertising market, which in turn could wreak havoc on tech valuations: after all major customers such as Unilever Plc have announced they are holding back ad spending to cut costs, a rallying cry which has been joined by many other companies. There is another red flag: as Bloomberg notes, WPP’s advertising sales have long been seen as a bellwether of strength in the global economy, as companies tend to expand or cut their marketing budgets depending on how well their businesses are performing. As such, today's historic crash suggests that ad spending in tumbling, a clear indicator of a global economic slowdown. Thursday’s stock slump deepens an already poor performance of WPP, which lost more than a quarter of its value over the course of last year, as discussed previously. Martin Sorrell, WPP Chairman and CEOHaving founded the company in the 1980s, Sorrell is the biggest individual shareholder at WPP, with a stake of about 1.4 percent. The ad giant said it’s responding by trying to break down silos among its various creative, ad buying, strategy and public relations businesses to draw on top talent and seamlessly serve clients. After “not a pretty year” in 2017, WPP is “upping the pace” of its effort to combine its global team, Sorrell said. “In this environment, the most successful agency groups will be those who offer simplicity and flexibility of structure to deliver efficient, effective solutions – and therefore growth – for their clients,” he said. For now, the WPP weakness has yet to spread to the ad-funded FANGS, as traders give the market leaders the benefit of the doubt for now.
Let's put Publicis Groupe S.A. (PUBGY) stock into this equation and find out if it is a good choice for value-oriented investors right now.
National CineMedia (NCMI) was a big mover last session, as the company saw its shares rise more than 18% on the day.
Waste Management (WM) reported mixed second-quarter 2017 results. With strong yield, volume and cost performance, the company reiterated 2017 guidance.
Ingersoll's (IR) solid second-quarter results were backed by healthy organic revenue growth in North America.
IDEX's (IEX) solid second-quarter 2017 results were driven by healthy growth across its segments.
TransUnion's (TRU) solid second-quarter 2017 results were driven by healthy growth across all its segments.
Interpublic Group (IPG) reported dismal second-quarter 2017 results due to a decline in revenues.
Even for experienced deal makers, a first digital acquisition is bound to be an education. Companies acquire to accelerate their overall strategy and digital transformation, as Publicis Groupe did when it acquired Sapient for $3.7 billion in 2014 to help it make the leap from a traditional advertising company to a digital one. But when companies turn to mergers and acquisitions (M&A) to help them deal with digital disruption, they usually discover not only how different a beast digital M&A is compared with traditional M&A, but also that everything they thought they knew about M&A may actually not help. They’re also likely to be paying an even higher premium for the acquisition, betting on a fast—although uncertain—development. Few executives appear prepared for the challenges of digital M&A. When we recently interviewed top M&A executives in Europe about their experience, fully three-quarters of them said that digital disruption has had a relatively large impact or even requires a complete overhaul of their M&A strategy. However, only 11% described themselves as being either “mature” or “advanced” on the learning curve. So, what do you need to know to get up the learning curve? Doing digital M&A right means upending the way most companies approach financing, due diligence, and merger integration. Let’s start with financing the deal. Determining the right valuation begins by understanding how the acquisition will affect your company’s equity proﬁle. The ultimate goal is to signal to the market that the digital acquisition is part of a series of moves that will help you adapt and win in the digitalization of your industry. Insight Center Crossing the Digital Divide Sponsored by DXC Technology How the best companies get up to speed. Meanwhile, because digital targets tend to be expensive, acquirers are limited in their ability to use stock to finance a deal. The dilutive effect for existing shareholders would be too high. On the other hand, acquiring a risky digital target in a 100% cash deal may expose the company to overvalued goodwill and future write-offs. To mitigate the risk linked to the target’s high multiples, you need to evaluate all potential ﬁnancing solutions, considering adapted payment terms such as earn-outs or other deferred payment mechanisms. When your company ultimately becomes a more legitimate digital player, you can be more flexible in how you ﬁnance future deals. In March 2016, Thales purchased Vormetric, the growing cybersecurity ﬁrm, for $400 million, which was 5.7 times Vormetric’s sales. The acquisition communicated to the market that Thales was shifting its ﬁnancial proﬁle to the high-growth business. Over time, Thales’ strategy, including multiple acquisitions in the cybersecurity space, will increasingly be captured in its price-to-earnings (PE) ratio and overall valuation, helping to attract growth investors. In fact, by the end of December 2016, Thales traded at a 21.8 PE multiple, a 15% premium over the aerospace and defense industry, which averaged 18.9. Next, you need to understand how digital M&A turns traditional due diligence on its head. To get a good valuation, companies screen a target before value has actually been monetized, and must compensate for a lack of ﬁnancials. Unlike the way traditional due diligence usually works, acquirers need to be much more forward-looking, using approaches that evaluate the potential success of the business model under different scenarios. The best acquirers build and manage a community of external experts, relying on them heavily to support diligence in areas that are hard to assess objectively. Diligence starts by asking a fundamental question: Is the acquirer capable of becoming a strong corporate parent? Many executives think first about how an acquisition will help them transform their own business, instead of how they can accelerate the profitable development of the digital asset they are acquiring, through financial resources, access to market, capabilities or technologies. Thankfully, there are digital tools to complement the traditional sources of information. For example, some companies use tools that can assess the perception and market recognition of the target. For sector and company screening, the data provider CB Insights helps develop information-rich company profiles, visualize competitive dynamics and uncover nonfinancial performance metrics. For diligence into a particular company, web scraping provides indicators of market share and growth momentum, such as web-traffic analysis and geographic coverage vs. competitors over time by extracting location websites. Sysomos offers social media site analysis that could help an acquirer understand what people are saying about a target. Web scraping by Quad Analytix pulls assortment mix and price point data from multiple retail sites to help acquirers understand market dynamics. Acquirers may also turn to Glassdoor or LinkedIn to assess the culture, or rely on tools that provide insights into the operating model of the acquired company— moves that help them mitigate potential integration issues. Indeed, integration of digital assets is a huge, thorny problem fraught with cultural issues. How do you absorb the new entity you acquired without killing it? If the deal is intended to expand your company’s scope with new customers, products, markets or channels, you are likely to require only selective integration. That means investigating where each company can beneﬁt from the other in technologies, customer proximity, go-to-market access and other capabilities. After Microsoft acquired LinkedIn for $26 billion in 2016, Micro¬soft’s CEO confirmed that LinkedIn would be kept autonomous, but that Microsoft engineers would be tasked with seeing how they could innovate with this new asset. However, if your company faces a major business model disruption linked to digital and you have already done several acquisitions in the specific area, it may make sense to fully integrate the acquired company. You may also consider a reverse takeover approach, in which you give the leadership of the acquired digital asset a broader business or functional responsibility within the combined company — anticipating challenges of helping it adapt within a larger organization. After its acquisition of Sapient, Publicis effectively gave that company’s executives greater responsibility in developing the digital part of its business. A few years later, it also created Sapient Inside, a network of Sapient digital specialists who help its traditional advertising agencies benefit from best-practice methods and tools. Publicis now gets 50% of its revenue from digital—that’s ahead of its 2018 target. In either case, acquirers need to carefully manage the transition in which leaders of the digital asset relinquish the entrepreneurial part of their jobs and become managers exclusively. Digital asset leaders are not always adept at navigating within the matrix organization of a large company, requiring specific coaching and support from the acquirer’s leaders. Acquirer’s must accommodate the inevitable differences in decision-making speed, and that may mean adjusting the acquirer’s own governance or putting a specific governance in place to deal with the acquired asset or the business area affected by the acquired asset. More broadly, acquirers may face the need to diffuse a digital acquisition’s risk-taking culture and mindset within their larger corporation. Digital disruption will only intensify. As it does, companies in all industries will turn to M&A. But they’ll need to evolve their deal-making skills for digital. The best companies will implement a feedback loop, learning from their inevitable rookie mistakes to improve and build consistent, repeatable capabilities for the future.
Внушительная доля рекламного рынка перешла в digital, трансформируясь по мере развития цифровых технологий. Растет конкуренция между участниками рынка, появляются новые маркетинговые инструменты и техники, а старые переживают качественные изменения. В частности, меняется подход к лидогенерации и привлечению целевого трафика. Статьей на эту тему мы начинаем блог маркетингового агентства ИНСТАМ. Доля рынка онлайн-рекламы продолжит расти вплоть до 2021 года по прогнозам PwC. Большинство организаций стараются выйти с маркетинговыми кампаниями в интернет. Источник: PwC Интернет-маркетинг неразрывно связан с IT-сферой. Развитие технологий позволяет работать с огромными массивами данных и получать выгоду от их анализа и использования в рекламе. Представители компании Zenitmedia (входит в Publicis Group) прогнозируют рост доли сегмента программатик (алгоритмической программируемой закупки рекламы на основе данных о целевых пользователях): он составит до 31% в 2017 году. Ручной метод закупки рекламы постепенно уступает свои позиции, как менее прозрачный и эффективный. Читать дальше →
On Jul 3, we issued an updated research report on waste removal services provider, Waste Connections, Inc. (WCN).
Clear Channel Airports recently inked a new five-year partnership with an optional five-year extension with the Corpus Christi International Airport .
Publicis Groupe has been met with scorn after announcing its hiatus from the annual ‘festival of creativity,’ when advertising executives, as a matter of ritual, flock to the French Riviera for events to honor the best work.
CACI International Inc (CACI) recently was awardeda contract worth $94 million by the U.S. Air Force 309th Electronics Maintenance Group.
M Science, a portfolio company of Leucadia National Corporation (LUK) recently announced the launch of M Data Enhanced (M Data E).
On Jun 6, we updated the research report on business information services manufacturer Verisk Analytics, Inc. (VRSK).