Roulston Energy Partner on the Benefits of the Keystone XL Pipeline

Roulston Research Energy Partner Thomas Pyle and his not-for-profit organization the Institute for Energy Research recently created a blog posting about the Keystone XL Pipeline. Their argument is that the $7 billion proposed pipeline expansion by TransCanada should be a no brainer because it will create more jobs domestically and reduce our dependence on foreign oil. Most detractors cite that the pipeline will not be safe, increase greenhouse gas emissions, and is not in the best interest of our country since it crosses the border from Canada. The Institute for Energy Research thinks these issues are minor and nonsensical. The pipeline is not using new technology and safety will not be a major issue with the expansion. The idea that the United States should not approve the pipeline because it will increase EPA emissions and is not in our national interest is also irrational. This theory assumes that Canada will not produce the oil which his highly unlikely because they can ship it to growing Asian countries where energy is in high demand. To read the full blog posting to see their entire views on the Keystone XL Pipeline please visit there website at http://www.instituteforenergyresearch.org/2011/09/29/keystone-xl-more-energy-and-more-jobs/.

Thomas J. Pyle is the president of the Institute for Energy Research (IER). In this capacity, Pyle brings a unique backdrop of public and private sector experience to help manage IER’s Washington, DC-based staff and operations. He also helps to develop the organization’s free market policy positions and implement education efforts with respect to key energy stakeholders, including policymakers, federal agency representatives, industry leaders, consumer entities and the media. To read more about the Institute for Energy Research and their mission please visit http://www.instituteforenergyresearch.org/.

Sapient: Strong Growth, Healthy Balance Sheet

A New York portfolio manager recommends Sapient (NASDAQ: SAPE, $10.35) as a Buy.  This global provider of integrated marketing and technology services is growing rapidly, with service revenues rising 27% in Q2.  The company has a strong pipeline across all segments, particularly in its main business, SapientNitro.  A number of important wins have been registered recently, including Adidas, Ladbrokes, Harley Davidson, Mattel, Coca Cola.  In its Global Markets group working mainly with financial services companies, Sapient is benefitting from Dodd Frank regulations and increased data and risk management requirements.  Margins keep rising and the balance sheet is very healthy with almost no debt and plenty of cash.  The presenter targets a 30% upside from here.

Medical Device Roundtable Focuses on Lack of Investment Action in Group

Ed Berger and Greg Erman offered an overview of companies in Orthapedic (ex. Stryker, Zimmer etc) and commodity pricing of certain sectors where companies living off past laurels.

Discussed how pharma due to regulatory environment and patent sunsets are forced to change competitive paradigm, make acquisitions, reduce cost and drive new product. This model has not hit devices who do not have some of same issues. Despite hundreds of device companies (400 in Boston alone) little M+A activity, private equity or even venture activity. Everybody looking for more revenue companies and little capital flow. So many device companies still single product and capital starved.

Three areas where activity is happening in part due to Affordable Health Act which is really only an insurance reform act). Health information technology, accountable care organizations and comparative effectiveness initiatives are all where spending and new initiatives are encouraged.In each area there has been spending most notably in health care records(Athena, Epic) but with few companies of scale.

Med Device managements seem to be overly concerned with short term impacts to earnings and thus are not spending like pharma on their future strategy. Pharma is moving faster with more obvious generic sunset issues. The FDA has really not made life more difficult for the device companies. Compliance is still an issue and so companies without staffing and experience cant get quick traction. This feeds the chain of poor IPO market, weak M&A market, few buyers, little competitive threats, fear of change with Obama Care and perceived regulatory risk with the current environment.

Areas of potential interst are more for venture and PE firms. Small company opportunities in home dialysis, diagnostic and preventive are areas of probably first opportunity. The critical tipping point is maybe to watch capital investment divisions of larger companies.

Roulston Technology Partner Rob Enderle on Microsoft, Yahoo, and AOL Teaming up to Compete Against Google

Roulston Research Technology Partner Rob Enderle recently commented on the potential alliance between AOL, Yahoo, and Microsoft as they look to gain back market share in online search advertising from Google. Currently Google owns 65.5% market share of the search industry and its competitors have been scrambling to stop the bleeding. One rumor that has been rampant is that either AOL or Microsoft would purchase Yahoo because both have been interested in the past. Rob dismisses this because last time Microsoft bid for Yahoo they were rejected by Yahoo’s board. This was very embarrassing to Microsoft’s executive team and the stock dropped 10-15% and never recovered. An alliance between AOL, Yahoo, and Microsoft to sell display ads could be the best chance for the three companies to make a dent in Google’s dominance. Microsoft is the only company that has hinted about the partnership but expect to hear more about this in the coming months. To read the full article please visit http://business.newsfactor.com/story.xhtml?story_id=100006NXPA1C.

Rob Enderle is President and Principal Analyst of the Enderle Group, a forward looking emerging technology advisory firm. He specializes in providing rapid perspectives and suggested tactics and strategies to a large number of clients dealing with rapidly changing global events. You can visit his website at http://www.enderlegroup.com/.

Roulston Telecom Partner Keith Mallinson on Vodafone and Verizon Wireless

Roulston Research Partner Keith Mallinson recently wrote an article about whether Vodafone would put Verizon Wireless free cash flow to better use. Vodafone shareholders have been frustrated that Verizon Wireless has not paid a regular dividend for its 45% stake in the company. There had been speculation that Verizon decided to block dividends as an unsuccessful attempt to get Vodafone to sell its stake in the company.  Keith questions shareholders unhappiness because Verizon Wireless has generated significantly higher returns than Vodafone over recent years. For Q2 2011 the company doubled the number of net new subscribers than its primary domestic competitor AT&T and has been very committed to growing organically rather than making major acquisitions. Keith argues that Vodafone shareholders are better off with Verizon Wireless keeping its free cash flows internally because the United States has been favorable to the leading operators with market growth and regulatory stability unlike other places around the world where Vodafone has a strong presence. To read the full article please visit http://www.fiercewireless.com/europe/story/would-vodafone-put-verizon-wireless-free-cash-flow-better-use/2011-09-20.

Keith Mallinson is founder of WiseHarbor, providing expert commercial advisory to technology and services businesses in wired and wireless telecommunications, media and entertainment serving consumer and professional markets. He is also regular columnist with Wireless Week, FierceWireless Europe, and IP Finance. Prior to forming Wise Harbor Mallinson led Yankee Group’s global Wireless/Mobile research and consulting team as Executive Vice President. He currently forecasts the long-term outlook in mobile operator services, network equipment and devices to 2025 which is available to purchase on his website at http://wiseharbor.com/forecast.htmlhttp://wiseharbor.com/forecast.html

Innospec: No Longer a Tainted Story, Growth Ahead

A New York-based PM likes Innospec (NASDAQ: IOSP, $25.08) at this level.  The company until recently had a cloud hanging over it stemming from the government investigation into kickbacks to win business in Iraq.  Innospec has settled with the government and one of its competitors and can fully focus on the implementation of its growth strategy under new management.  Both Fuel Specialties and Active Chemicals businesses are growing rapidly and the company is expanding overseas.  Jeffrey Gendell, who was the big seller in the $30-$32 range has reduced his stake from 15% to 9.9%.  Going forward, with the stock added to Russell 2000 and the selling pressure subsiding, volatility should not be a big issue.  The stock is only covered by one analyst and increased coverage would be an important catalyst.  Trading at well below peer multiples , IOSP is attractive here with a possible 40% upside.

Roulston Media Partner Robert Rose on Netflix Decision to Separate DVD and Streaming Businesses

Roulston Research Media partner Robert Rose recently commented on Netflix’s controversial decision to split up their original DVD business from their higher growth streaming content. The spun off DVD business is now called Qwikster and it has incorporated DVD rentals into the product offering. However, there is now a separate charge for this offering and customers have been extremely upset at the move by CEO Reed Hastings. While Robert Rose thinks separating the businesses could be very beneficial long-term he believes that it is a major marketing blunder by the company. Netflix is a business focused on building subscribers and they failed to keep their customers engaged with what is going on with the price changes. He feels they made three major mistakes which were not giving their subscribers any time to adjust, failed to research into their channels, and being flat out dishonest with their customer base. To read Robert’s entire thoughts on Netflix please visit his website at http://adaptivemarketer.com/2011/09/netflix-qwikster-when-the-story-starts-without-you/.

As the Founder and Chief Troublemaker at Big Blue Moose, Robert Rose helps marketers become storytellers. Author of the book Managing Content Marketing, and a recognized expert in content marketing strategy, digital media and the social Web, Robert innovates creative and technical strategies for a wide variety of clientele. He’s helped large companies such as PTC, First American Title, Valley Crest, American Camp Association and Nissan tell their story more effectively through the Web. He’s worked to strategize digital marketing efforts for entertainment and media brands such as Dwight Yoakam, Nickelodeon and NBC. And, he’s helped marketers at smaller organizations such as East Harlem Tutorial Program, Coburn Ventures, Hippo and Magus to amplify their story through Content Marketing and Social Web Strategies.

Highlights from September 20th Technology Roundtable with Pip Coburn and Michael Liebow

Roulston Research recently had a Technology Roundtable in New York with Pip Coburn and Michael Liebow. Pip Coburn is principal of Coburn Ventures and is former Managing Director and Global Technology Strategist at UBS. Michael Liebow is founder of Foretuit, the leader in predictive sales pipeline management, and former Vice President of Business Development at IBM Global Business Services.

When it comes to cloud vendors prefer the status quo. This is one of the reasons why growth rates for HP, IBM and Cisco have slowed. Want to keep companies in private cloud where their legacy revenue flows from and where incumbent suppliers are entrenched.

Development testing is big avenue of growth. CIO’s who fostered internal development being replaced by those understanding bigger picture.

Its not about consumerization but instead socialization. “Socialization is the Arab Spring”. Witness concepts that catch the trends and capture market thru response to socialization. Dell now has 6000 people authorized to represent them in Social Media. ZARA sells Kate Middleton’s $49 dress and cant keep it in stock in any store.

HP, Oracle and SAP HAVE THEIR HEADS IN THE SAND.

Service based applications integrated into cloud are changing enterprises and are the big opportunities.

The four platform leaders are Amazon, Google, Facebook and Apple. Sucking the wind out of the other players and replacing the models of Monster, Best Buy, Borders, Blockbuster, SAP and others.

Roulston Paper Partner Sarilee Norton on the Changing Landscape of the Containerboard/Corrugated Industries

Roulston Research Paper Partner Sarilee Norton recently wrote an article on the outlook for the containerboard and corrugated industries. Consolidation was the main theme in 2011 in the industry with the Rock-Tenn/Smurfit-Stone and International Paper/Temple-Inland acquisitions. Sarilee thinks both will pay-off in time as the company gets them culturally aligned with the owner’s go-to market strategy but a lot of people feel the companies acquired two of the worst players in the industry. She cited a survey done in 2010 by Mark Wilde, paper and packaging analyst at Deutsche Bank, that had responders rank the six largest domestic integrated box producers and Temple-Inland and Smurfit-Stone ranked last. Sarilee thinks the next potential big merger in the industry could be between Georgia-Pacific and Packaging Corporation of America. Both have mills in attractive locations for the other party but she is not sure Koch industries, who owns Georgia-Pacific as a wholly-owned subsidary, wants to increase its exposure to the cyclicality of the containerboard industry. Both could just stand pat and see what opportunities present themselves in the future. To read Sarilee’s full article to see her detailed analysis of the Rock-Tenn/Smurfit-Stone and International Paper/Temple-Inland acquisitions along with future industry outlook please visit her website at http://www.nortonassociates-ri.com/wp-content/uploads/2011/09/How-does-your-garden-grow_final.pdf.

Sarilee Norton, President of Norton Associates, has over 30 years of industrial experience in strategy, business development, market planning and corporate communications, as well as in sales and general management. Most recently she was President of the Tru- Tech division of Temple-Inland, a specialty paper/plastic laminating business that served printing and converting, fulfillment, durable envelope and tape customers. Previously she was Vice President of Corporate Strategy for Tenneco, a Fortune 500 diversified manufacturing company where her responsibilities included directing the company’s strategic planning and analysis activities and strategic transaction opportunities. You can read more about Sarilee her consulting work at http://www.nortonassociates-ri.com/profile/

Roulston Retail Partner Craig Johnson on Upcoming Retail Holiday Season

Roulston Research Retail Partner Craig Johnson recently was interviewed about his thoughts on the upcoming retail holiday season. Craig believes we will have an above average holiday season despite the negative headlines about poor consumer confidence and high unemployment. Craig’s optimistic BTS 2011 prediction of 6.2% was very close and he expects Holiday sales to be up 4-5% on a year-over year basis unless gas prices go above $4 a gallon. He expects department stores to continue to rebound with Macy’s continued improvement while at the high-end Saks and Neiman Marcus will grow at a healthy 11-12%. After years of decline department stores have realized that they have to offer customers something that they value whether it is lower price points or exclusive lines. He also believes that Wal-Mart will perform better this holiday season primarily led by its international division and Sam’s Club. The domestic business is still seeing declining home and apparel sales which has been hurting the margins. To read Craig’s full article to see his opinion on the upcoming holiday season please visit http://www.mediapost.com/publications/?fa=Articles.printFriendly&art_aid=158409.

Craig Johnson is President of Customer Growth Partners of New Canaan, CT, consultants serving the Retail and other Consumer industries. He has three decades of experience in consumer service industries, in both senior executive and consulting roles, and has advised institutional investors and private equity participants on opportunities in the consumer discretionary sector. He is cited as an authority on retail and consumer issues in publications such as Business Week, Fortune,New YorkTimes, The Times (London), USA Today, and the Wall Street Journal. His Retail clients have included firms such as BJ’s Wholesale, Crutchfield Electronics, JC Penney, Lands’ End, Lowe’s, Perry Ellis, Simon Group, Toys R Us, Walt Disney,Westfield America and Williams-Sonoma.