The Best One Yet - “Apple’s pizza is waaaay too big” — Apple’s 4-1 stock split. P&G stole Sysco's sales. Amazon’s record.

Episode Date: July 31, 2020

Fresh after hitting Capitol Hill, the Tech Big 4 announced earnings reports (they were epic). We’re focused on Apple’s 5 profit puppies and Amazon’s double-double. Then Procter & Gamble sneaked in with its best quarter in 14 years because one company’s loss is another’s gain. And P&G has tons of MBAs.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Friday, July 31st. Nick, we just heard from the Commerce Department. Great department. One of every $10 normally spent in the U.S. economy vanished. Last quarter.

One of our top five departments' biggest decline in GDP since hands across America. It's actually the worst one by over three times the previous worst. But honestly, that was old news. We all knew last quarter was brutal for the economy. So forget the GDP. Let's focus on these three. stories, they happen to be TBOY the best one yet. For our first story, yes, we have a brutal recession and yes, we have a brutal global pandemic, but Apple still had its best second quarter

ever. But the stock split is what got all the attention. You're getting four slices of Apple Jack. For our second story, Procter and Gamble products probably make up like 30% of your last grocery store receipt. So a company that's stuffed with MBAs and settled in Cincinnati loves that you're spending more time at home. For our third and final story, Amazon stock. price is double what it was last year because it's double as profitable as it was last year. Pretty simple. We did the calculus on it. And everything Congress said two days ago about monopolies kind of seems to be true with Amazon today. Yeah, that's about right. Now, before we jump into all that wonderful stuff, earlier this week, Snackers, we told you how Boston Beer Company was kind of facing

an identity crisis. It's not really a beer company. No. Three quarters of sales are not beer. We're talking twisted tea and truly hard salsa. It's simple stuff. But Coca-Cola, is jealous of their identity crisis, so it's making its own moose. It's taking its Austin, Texas-based water brand called Topo Chico. It's sparkling water, but they're going to spike it with booze. They're just pouring a little bit of, we're going to guess, ever clear. And then coming in 2021 to the U.S., you're going to get Topo Chico alcoholic sparkling water. Yep, we get it next year. Latin America gets it right now, which we're a little jealous of.

The Smearnoff Ice of South of the Equator. Now, Coca-Cola acquired Topo Chico in 2017 because it needed a little hipster in its portfolio beverage, and Topo Chico is very much that. You can't just open an office in Williamsburg, so Topo Tico's new hard-seltzer cans kind of look like they were designed if you squint like White Claw. It's a blurry version of White Clause cans. If you round up with your eyes, it's basically whitecloth. Now, this is not Coca-Cola's first foray into alcoholic beverages.

No, way back in 1983 before we were born, apparently they were back in the wine biz with a company called Wine Spectrum. But they sold that, so they've been out of the wine and out of the alcohol biz for 35 years. Hope they know what they're doing. What we do know is that those Coca-Cola polar bears are aware that Topo before cocoa, you'll get loco. Bubbles before cuddles gets you in troubles. Hydrate before carbonate, then you're going to hibernate. These sage words of wisdom, Nick and I are going to ship them up to the North Pole so that the polar bears know what they're getting themselves into. We're going with a carrier pigeon.

Let's hit our three stories. You're tuned into snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hair ain't food. It's air candy. They don't reflect the views of the Robberhood family. It's all informational just so, you know. We're not recommending any securities.

It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you. Robahood Financial, LLC, member Fenra slash SIPC. For our first story, Apple shares just jumped 5% after its best second quarter ever. $11 billion in profit. We're talking enough profit generated in three months for Apple to buy a Lyft.

The entire company. Yeah, Tim Cook wants to go to Pilates in like a low-key way. He could have bought Lyft three months ago. If Apple had bought Lyft three months ago, they already would have paid it off with the last three months of profit. Not too shabby. Now, just like a Steve Jobs Apple event, the very last line of this Apple earnings report is what kind of like stole the show here. Apple's like, oh, one more thing. Yep, we want the stock to be more accessible to a broader base of investors. Exact quote, final paragraph of the earnings report. You know what they're pulling? The old stock split.

The old four for one stock split. They're doing it four to one style. They're dividing every one share of Apple into four shares of Apple. And then the stock value will fall by a quarter. If you have one share of Apple right now that is $400, then on August 31st, you'll have four shares that are only worth $100. Overall, your value of Apple stock hasn't changed. Exactly. And that's the key here with the stock split. It's purely cosmetic.

You still own $400 worth of Apple. This brings me back to West Village to a great pizza parlor called Emmy. Yes. Where Nick and I got a square Detroit-style pizza that had a lot of gluten, a lot of meat, and it was not dairy-free. So Patricia brings out this delicious carbid pizza, and they've only cut it into like three slices for just two people, Jack and I. These slices are huge. So we ask Patricia, can you please give us a two to one stock split for each of these? If my friend here, Jack burns his mouth, I'm not going to be happy. So Patricia takes out the wheel. She cuts the whole thing right down the middle, and it goes from three slices to six slices.

Now, we still ate the entire pie. Full disclosure. So if Apple is a pizza, it just cut every slice into four different slices yesterday. Now, by the way, Snackers, this isn't the first time for Apple. It's actually the fifth time they've done a stock split since their IPO in 1980. They did it two to one stocks. Classic. Another two to one stock. Classic.

Another two to one stock split. Again, classic. In 2014, I remember the seven to one stock split. Not classic. And now finally, a last four to one stock split. If those splits had never happened, though, Jack and I did the math on this. Apple's stock price would be huge now. And Apple's share would be worth $22,400 if none of those stock splits had ever happened.

That's why you do a stock split. If you're doing stock splits, it's a good problem to have. It means your stock price has been climbing so much. It's just too big. But stock splits are kind of less relevant now because most brokerages let you buy a fraction of a share anyway. It's still something you brag about, though, in a press release. So, Jack, what's the takeaway for our buddies over at Apple? Apple has five different profit puppies. Snackers, nearly one half of Apple's sales are iPhones. They make up the biggest of the profits. But that biggest profit puppy is the slowest growing profit puppy by far. Sales only grew 2% from last year. The other four profit puppies for Apple, though, are way smaller, but growing way faster. We're talking services, which grew 15%. Nice, wearables, up 17%. Macbooks, 21%. iPads, up 31%. And only moms buy iPads.

You gotta be kidding, man. Apple doesn't do one hardware device like Alexa to do 10 things in your home. No, it's got like 10 different hardware devices that each do one thing incredibly well inside your home. MacBook for your work, AirPods for your music, iPad controls it all. For our second story, Procter & Gamble just had its best sales growth in 14 years. Because while offices aren't buying, homes are buying extra. First of all, before we cover P&G, we got to point out they are a business. obsessed with business school students. Each MBA at Procter & Gamble gets assigned one of Procter and Gamble's like 100 brands. One brand. And they're ordered to expand it like it was their own baby boy or girl.

Derek, Stern Class of 2020, Grow Oralbee toothpaste from number 8 in Brazil to number 7. Winston Kellogg class of 2016, boost Tide's market share from 34.5% to 35.4%. Priyanka, Indiana, Kelly School of Business. Lower Sharman's cost by 2%. increase revenues by 3% and then fire someone. Please, just pick someone. Anyone. And if you hit your goals, Priyanka Winston and Derek, you'll get promoted to a bigger division.

A big division. And then you can start the whole process over again, but you're going to have to fire more people along with that process. Now, Procter & Gamble shares jump 2% Thursday on word that sales spiked by a record amount from April to June. For the record, Procter & Gamble is a huge company. It is number 10 on the list of most valuable American publicly traded company. And it sends a quarterly dividend check to shareholders, which is like basically handwritten.

It's basically like, thank you for owning part of the company. Here's like $7 for owning one of our shares. And they've grown that dividend for 63 straight years. Pretty, pretty good track record. Now, the corona economy has kind of hurt some sales, but it has massively boosted other sales for P&G. Grooming products, for instance, have fallen by 5% last quarter. Yeah, now's not the time you're going to be shaving regularly. Sales of fabric products and home care products rose by 11%.

You're not shaving with the facial hair is falling off, and it's falling off on your couch. Now, while you're not grooming, your house is getting dirtier, faster, which is driving sales of Procter & Gamble's own product, Fabriz. Jack and I were just talking about this. We both cleaned the counters more in the past six months than the previous six years. If you know, you know. So, Jack, what's the takeaway for our buddies over at P&G? Every extra dollar Procter & Gamble gained was lost by something.

someone else. Snackers, another key company here, Cisco. They make food, paper, and cleaning products in bulk for businesses. And with offices closed, your office's office manager has canceled the recurring orders of Cisco's giant toilet paper, which Cisco depends on. We're talking like one plight long enough to wrap the Empire State Building like King Tut. Cisco sells industrial-sized equivalents of many of the home-sized products that Procter & Gamble sells. So Cisco sales are suffering because hotels, offices and businesses are closed right now. And time people aren't spending at hotels, offices, and businesses is time spent at home. And that means P&G is winning sales where Cisco's losing sales. Guess what? Wall Street completely agrees. Procter and Gamble stock is up 6% in the past

six months. Cisco stock is down 35%. For our third and final story, Amazon absolutely crushed earnings in the corona economy. It's spent really big, but it won even bigger. Now, Snackers, if you're wondering why Amazon stock doubled in the past year, this is why. It's profits have doubled, too. Yeah, very straightforward, very sensible, most sensible financing headline we actually think we've ever seen. I was shocked at how, like, clear that one was. It's like, oh, yeah, of course. No EBITA, no stock split, no discount of cash flows, no adjusted, just straightforward. Now, COVID-19 made us fear germs and made us obsessively stay home. And therefore made Amazon twice as profitable as it was before. There you go. That's it. Now, Wednesday night or Thursday morning,

we're not sure. Jeff Bezos probably jumped in his rocket chip and went from Washington, D.C. to Seattle. He read Amazon's earnings report. He pet his cat and he put his earring back in because he's home now. Because Jack and I know when Jeff Bezos isn't on camera, he probably has an earring. He's like Mr. Clean. We're pretty sure he's got an earring. He hasn't told us about it. Now, from April and June, Amazon's revenues jumped 40%, but its profits doubled to $5.2 billion. For a company as big as Amazon, to have a revenue growth of 40% is absolutely. Absolutely unheard of. Yeah, that's sent the stock five times higher to a record high. And Jack, now that Amazon's worth $1.5 trillion, can you give us the lift calculation? I'm glad you asked, Nick, Amazon is now worth 166 lifts. No rounding done there. Now, by the way, fueling Americans' unhealthy online shopping habits right now is really expensive for Amazon to handle. Amazon spent $4 billion on COVID-related extra cost last quarter. We're talking masks, fernometers, overtime pay. And it had to hire 175,000 people just since March to meet the demand of online shopping.

That means in the last three months, Amazon's added the same number of workers as United Airlines and Delta Airlines have combined. Wow. Now, that's a lot of money they had to spend to keep operating during their current economy. Yep. But those investments more than paid off. $5 billion of revenue was left over as profit after paying that army of Amazonians. So, Jack, what's the takeaway for our buddies over at Amazon?

Monoplies can charge high rent and become incredibly profitable. Snackers, Amazon's earnings just reinforced Congress's whole argument that they made just two days ago to Amazon. Yeah, for the very first time ever, Jeff Bezos testified before Congress on Wednesday afternoon. Gave the old we promise we're not a monopoly charade. But look at the growth in third-party sellers at Amazon. It collected $20 billion in fees and services from companies that needed to sell their products on Amazon.com. So like, let's say you're one of those companies. Yeah, you could sell your same product on eBay or Etsy.

Like, you could do that. You could. Those are competitors technically to Amazon, but Amazon is 29 times bigger than Etsy and eBay combined in terms of market cap. 29 times bigger. So to reach American online shoppers, you kind of have to go through Amazon. Jack, can you whip up the takeaways for us before the weekend? Apple's pizza has become so big.

It's time to cut the slices into smaller little pieces. It's called the Stocks split. On August 31st, all Apple's stock gets in. to fourths. For a second story, Procter & Gamble loves hiring MBAs to lead its 65 different home product brands. And all the sales, Cisco's losing in the current economy, P&G is picking up. For a third and final story, Amazon.com, that's the gatekeeper to America's 300 million online shoppers. Bezos and his earring turned that power into a $5 billion of profit last quarter. Now, time for our snack fact of the day. This one sent in by Jen Effinger, aka Sailor Scary in lovely Middletown, Ohio.

because it's halfway between Cincinnati, home of Procter and Gamble, and Dayton, Ohio. Sin City, the Rome of the Midwest. Now, Snackers, apparently during the Great Depression, a third of people in Eastern Kentucky couldn't read. Not like couldn't conjugate verbs or convert the subjunctive into the conjunctive. No, no, no, no. We're talking they couldn't read. They couldn't read words and put sentences together. Couldn't read. So librarians pitched this epic New Deal plan to tackle rural poverty, and they called it the Pack Horse Library initiative. This was a gang of librarians, mostly women, who packed saddlebags with books, and rode across 10,000 miles of eastern Kentucky. They handed out books, stimulated minds, galloped on

thoroughbreds. The whole reason they did this? Knowledge is power, so they gave away books. A wild snack fact. Now before we go, Snackers, happy birthday to Noddy in Texas. And happy birthday to Roheet in Foster City, California City by the Bay. And happy birthday to Nanette in the West Village, turning 25. She's definitely been to Emmy squared pizza. Snackers, this weekend, yell to your friends six feet away, H-Y-H-Y-Y-S-D. Let me want up you, climb to a mountain

and yell from the top of the mountain, H-Y-H-Y-S-D. Have you had your snacks daily? We'll see you Monday. If you know, you know. This is Jack, I own stock of Amazon, Nick on stock of Apple. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts

who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report

and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.