The Best One Yet - “When aisle 6 produce goes public” — Albertsons’ grocery IPO. Ford’s profit puppy makeover. Big Banks houseparty.

Episode Date: June 29, 2020

The latest major IPO is America’s 3rd largest grocer, but we think Albertsons looks less like a grocery chain and more like a finance company. Ford is redesigning America’s most popular car, and the new F-150 pickup tells us where the truck industry is going. And Big Bank stocks are making big moves like they got the keys to Mom and Dad’s house for the weekend.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. Welcome back. It is Monday, June 29. Tony Fauci had an intervention with Wall Street last week, so stocks fell. And then Jack and I pulled a Bobby Frost and wicked up a poem on this thing. What your face blocks is good for stocks. Little less haiku, a little bit more limerick. That is a pro-masked poem by Snacks Daily heading into this week. An original straight-up T-B-O-Y, Jack, the best one yet when it comes to this pod. What do we got? You may have never been to an Albertsons before, but you've probably been to one of the 20 grocery store chains that it owns. Paper or plastic, Albertsons, is our IPO stock of the week. Our second story, Ford, is redesigning America's four-wheeled profit puppy for the first time in six years. So, 2021 F-150, a little less brawn, a little bit more brains. This thing includes a standing desk. Third and final story, big bank stocks are making big moves. First up, then down.

J.P. Morgan got a call from mom and dad. We've opted your allowance and given you the car keys for the weekend, honey. Oh, but by the way, you're grounded. It was a confusing message from the big banks. A lot of contradictions.

We're looking at the easing of the house, Volker House rules. Snackers, as we mentioned, stocks fell last week. But you know who didn't fall? The gap. The gap. There was such a big stock jump.

Jackson and my mom's called us. I'm having PTSD from the dressing room when I had to try on six pairs of pants because 14 Husky or 16 regular. It was a tough decision. It was a judgmental period in our eight-year-old life. but we all had six sweatshirts with GAP. Now Gap stock surged 19% on Friday on word of a new

Yeezy clothing line with Kanye. Yeah, turns out Kanye West worked at the Gap when he was a teenager in Chicago. It's no Olive Garden, but it is a little circle of life now that he's partnering with the Gap. Gap and Kanye, not quite ying and yang, feels like one of the most mismatched partnerships when it comes to celebrities ever in corporate history. Throw it up there with Matthew McConaughey and Lincoln Car Company? McConaughey! Fabio and I can't believe it's not butter. Best hair in the dairy biz, Jack.

Sophia Vargarra and head and shoulders. That was a surprise. Speaking of hair, she was like massaging her son's head in the ads. It was creepy. Last mismatch partnership, Snoop Dog and Hot Pockets. Actually, that one almost makes too much sense, Jack. Yeah, yeah, Snoop and Hot Pockets is kind of perfect, actually. If we missed one, tweet us at T-Boy Jack and at Nick of New York, Jack.

Should we hear our three stories? Let's do it. You tuned in the snacks daily. Snacks about the hair ain't food. It's air candy. reflect the views of the robberhood family. It's all informational just so. 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. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, grocery legend Albertsons just IPOed before the weekend. They finally have their own publicly traded stock, but it's really, Not exactly a grocery company.

Not exactly. And Snackers, this all started way back in 1939 in Boise, Idaho, between 16th and State Streets. Make it right after the rec center. And if you've reached the famous blue astro turf of Boise State, you've gone too far. We're talking about the third biggest U.S. grocer in the United States, 2,200 stores and like a whole bunch of pharmacies. Albertsons is the first company based in Idaho that we've covered on snacks. But they're not just Albertson's grocery stores. They got Safeway, Shaws, Acme.

You got Lucky's Market and Tom's Thumb, which sound more like characters and like a Dickens novel. Love Lucky's Market. It sadly just closed down in Ann Arbor, Michigan, though. Key point we learned, they are number one or number two and two-thirds of the markets in which they are operating. Albertsons tried to IPO back in 2015, but they abruptly canceled their plans. Albertsons, step on the scale. Step off the scale. Now they're IPOing at the perfect time. Grocery stores have never been more important, and sales in March jumped 47 percent, COVID-19 kicked in. You walked in with a family of four, you walked out with hoarding for four years

worth of food. Which brings us to Albertson's key business strategy here in 2020. Get customers to buy their sleeper brands. Sleeper brands, keyword snackers. Now, when you walk around any grocery store, you notice the aisles are like filled with other well-known nationwide brands. Justin's almond brother. 24 types. Red Baron frozen pizza, my favorite. Last a lifetime. Drop a can of orange juice straight from the great state of Florida. But a gross The grocery stores real profit puppy is their own brands, which they disguise as other brands. That's right. You don't even realize it Snackers. A lot of these brands out there, they're actually owned by the grocery stores. That's why we call them sleeper brands. They're like a CIA sleeper cell somewhere in the Middle East.

Suddenly they pounce out of your pantry and they're all over you. For example, O-organics, or Open Nature, or Lucerne. These are brands that are subtly owned and controlled by Albertsons, but they don't have the word Albertsons anywhere on the packaging. No, super sneaky. And we jumped into the financials. at about a quarter of Albertson's sales are actually their own brands. But it wants to jack that up because own brands means Albertsons gets to keep 100% of the profits made from those products. They don't have to share any of that markup with our buddies over at Heinz. Now, when a company IPOs, Nick and I like to jump into the S1 document, which they're required by law to admit what their biggest risks to their business are. No joke. Jack and I cancel lunch plans and then

spend like an hour reading this S1 document. It was refreshing too because we're used to jumping in tech company S1 documents, where the risks are super, like, esoteric and sophisticated. Our technology may become obsolete through disruption. Influencers may turn against our platform. Meanwhile, we look at the Albertson's risks from their S1 document. These are, like, insanely wholesome. They're like, our food might go bad. We can't control milk prices.

Seriously, perishable products make up 41% of our business, so if someone unplugs the refrigerator, we're in trouble. Jack Dorsey's looking at this, and he's like, I don't understand any. it. I just like squeeze a macadamia nut once a week for my nourishment. But it's real refreshing to have a business that kind of reminds you of your kitchen. So Jack, what's the takeaway for our buddies wholesomely over at Albertsons? Albertson is a private equity company disguised as a grocery store chain. Snackers, private equity companies, they're using debt to buy up other companies and then optimize profits. Albertson itself is a product of a whole

bunch of private equity acquisitions. That's why it has $8 billion of debt. Jack and I pulled out the old Command F. If you searched in the S1 doc, they mentioned the word debt 221 times. How about the word grocery, Jack? 24 times. That's it. And the word milk is mentioned six times. That's it. The company itself is also just the result of like a whole bunch of mergers and acquisitions. It just acquired Safeway. And it also bought up like 19 other brands listed in the S1. Debt is the overarching theme of this S-1. They also tried to merge with Rite Aid back in 2018 and even tried to buy Whole Foods back in 2017. The S-1 keeps referring to a consortium of financiers that still control Albertsons, even after the IPO happened on Thursday. They sound dangerous. Albertsons is public,

but it's still owned by and acts like a private equity firm. For our second story, Ford just unveiled the latest version of the biggest automotive profit puppy ever. Ford is trying to modernize The pickup truck with the latest F-150. Which means there's a throwdown in the battle of the brainiest slogans out there. Built Ford Tuff. Like a rock. Grab life by the horns. Punch life, beat it up, and then grill it.

Ford is leading the brand facelift when it comes to pickup truck. Snaggers, that means we got to talk about how traditional pickup truck owners are all about the three bees. Bench pressing, beef burgering, and horsepower bragging. But Jack and I noticed that the modern pickup truck owner is all about the three bees. the three V's. Little bit of vinyasa, a little bit of vegan, a little bit of environmentalism. Now, Ford is doing a fascinating, big pivot right now, we noticed. Instead of just highlighting Ford's pickup truck's toughness, they're highlighting some modern features. That's right. In 2015, Ford was the first pickup truck to switch from a steel body to an aluminum one, which I believe, Jack,

aluminum is lighter, so it has better fuel efficiency. The only downside to that move was less marketing of the word steel. I believe this all goes down in the chassis. It's outside the chassis. It's like the epidermis of a pickup truck. Now this year, Snackers, Ford like threw on some all bird shoes and decided to highlight a desk in the car. Get this. In the 2021 Ford F-150, you can like knock down the gear shifter, lay down a flatbed, and you have like an entire desktop between the two front seats of the truck. You squeeze incorrectly, you could turn this into a standing desk. This pickup truck also has a broadband internet jack and it's got like the little three-prong plug thing so you can plug whatever you want into it. It's pulling an E-Lon and doing like software updates to tweak improvements

in the truck like while you're driving the thing. Working from your truck isn't just about hammers and nails. It's also iPads and PDF documents. Because if you're pickup trucking right now, you're probably WFPT. Jack, can you spell out the acronym? Work from pickup truck. Possible now with the new F-150. So Jack, what's the takeaway for our buddies over at Ford? Ford better be modernizing because the next generation of pickup trucks is coming. Snackers, the Ford F-150 is the highest selling car in America for over 30 years now. It's like the Beethoven of profit puppies. This thing's like 300 pounds. 900,000 people bought a new F-150 just last year. For context, that is almost three times as many Teslas that were sold last year combined. Number two is GM Silverado Sierra pickup trucks. Number three, Dodge Ram. But the pickup truck

disruptors are revving their silent electric motors and Ford season in the old rearview mirror. Yeah, along with some ridiculous names. We got Tesla Cybertruck, Nicholas prototype, Lansdown motors, and then Rivian, which sounds like a movie. Those companies are challenging Detroit's Braun with venture capital cash in Silicon Valley engineering. Ford won't have an electric pickup truck, by the way, until next year. Until then, the F-150 is going to going to be a little less brawn, a little more brains. For our third and final story, what about the pinstripes, Jack? Big Banks had an up and down Thursday.

They're getting a bigger allowance, but they're also getting grounded. Brings us to news number one, the FDIC has decided to loosen the old vocal rules for banks. The FDIC is basically like, go crazy banks, do whatever you want with the house this weekend. Just make sure it's cleaned up when we're back on Monday. Jack, I feel like there were like six movies in the 80s about this, and half of them start Tom Cruz. Yeah, we use a little bit of artistic discretion there, but banks really have a straightforward business. They hold your money, which you have in your checking accounts. And then they take that money and they invest that money by lending it out to other people and a bunch of other companies.

Now, then came the Volker Rule, passed right after the 2009 financial crisis because they didn't want banks to get carried away with themselves. Yeah, this thing basically banned banks from doing crazy things with your basic money. It basically said, okay, J.P. Morgan, you're not allowed to take that guy's direct deposit check and invest it in a triple leverage mortgage-backed securities derivative thing. Now, the news we just heard was that this Volker rule is going to be loosened. The FDIC is like, okay, J.P. Morgan, you can do more than just loans with that guy's direct deposit paycheck. You can invest in like startups and hedge funds as well. Yeah. They're basically telling JPMorgan, hey, if you want to invest in Airbnb with someone's paycheck, you can kind of do that now.

You can do that now. So naturally, bank stocks were like, this is good news. And the stocks jumped, But then we got news number two on Friday, which was kind of the opposite. The Federal Reserve Bank ordered all of the banks of America to not buy back their stocks or raise dividends for another quarter. Basically what they're saying is, hey, we don't like that you had that party on Saturday, so we're canceling the family trip to Disney World, no more eating out, and no more online shopping for three months, stay in your room. It was bummer news, but banks have to deal with it because they are a highly regulated industry. Yeah, the Federal Reserve, our nation's central bank, can limit the other.

bank's ability to hook up shareholders with the profits that those banks have been making. And the Fed is honestly just worried about the economy because of COVID-19. Straight up worried. And they don't want to have another situation where the banks need to be bailed out again, like in 2008 and 2009. So they want the banks to be on their best behavior, keeping things simple, and make them save more money at least until COVID clears up. So Jack, what's the takeaway for our buddies over in the banking industry?

We want to know how all of this news affects the bank's future profits. and those two announcements are pretty much a wash. Snackers, turns out those two moves by those two regulators had opposite effects on the value of bank stocks. The loosening of the Volcker Rule could boost banks' profits. But then the limit on dividends mean fewer profits will get to shareholders for now. So stocks of Goldman Sachs, Bank of America, J.P. Morgan, Citibank, and all the other big banks rose on Thursday of the first announcement. And then going to the weekend, they fell on Friday on the news number two. Owning a stock means owning future profits.

And Thursday's news was a complete wash. Jack, can you whip up the takeaways for us to start the week? Albertsons has a wholesome business model, a financially engineered balance sheet. Its goal is to steer shoppers to its sleeper brands. Ford's F-150 is the profit puppy of all profit puppies. And instead of horsepower and torque, Ford's marking and ergonomic seats and software. For our third and final story, Big Banks had some good news and some bad news on Thursday. Yeah, one was good for future profits.

was bad. And it was a wash for their stock prices. Now, time for our snack fact today. This one tweeted in by Joe Moore in St. Joseph, Missouri, home of the Cherry Mash candy. Well, let's kick this snack fact off with Mark Benio, the founder and CEO and San Francisco founder of Salesforce. Longtime snacker. Actually, he started his career as an intern back in 1984 at Apple. Years later, he came up with the name App Store. Remember, App is like the Sam. for applications, Samantha. And he was going to use it for a Salesforce product, but decided not to. So in 2008, he told his lawyer to fax Apple his trademarks for App Store.

So that's how Steve Jobs got the app store name, Mark Benioff, granted it to him. Nothing like tech founder billionaire philanthropy to another tech founder billionaire. So true. Now, before we go, happy birthday to Cliff celebrating his 36th birthday. We just heard that Cliff and Catherine had a long-distance relationship, and Snacks Daily was a mutual love and a mutual conversation topic. Couples that snack together stay forever together. I think we can say that.

And we also got to say happy birthday to the guy who gave Jack Life, Big Ted Kramer, Big Ten. And Big Mike, Big Mike Martel, the ambassadors connected to New York. Happy birthday to you as well. A lot of dad birthdays this month. Snackers, tweet us your snack facts at Robin Hood Snacks. We need more and we need merry ones. And ask your buddies H-Y-H-Y-S-D.

And then tell them, have you had your snacks daily? like that. Thanks for snack and we'll see you tomorrow. If you know, you know. 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, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, 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, is not intended to serve as the basis of any investment decision.

Robin Hood Financial LLC, member FINRA, SIPC.