The day after Christmas has become one of the best shopping days of the year for retailers as consumers look to get those gifts that they wanted but didn’t get the day before. It has become a day that is as much about buying as it is returning especially this year with a record $28 billion in gift cards sold this holiday season. Craig states, “If your using a gift card, it’s like using other people’s money, so you don’t mind paying full price.” Customer Growth Partners thinks that $29 billion was spent this past Monday, which may make it more than Black Friday. The three day weekend and nice weather may have played a factor but Craig believes this is a sign that consumers are much healthier than a few years ago because they deleveraged and brought consumer credit down by 20 percent in terms of what they borrowed. He explains, “We think it looks pretty good for sustained spending growth for the consumer.” This comes on the same day that Sears announced they will be closing 100-120 Kmart and Sears stores as the company announced weaker than expected holiday sales. The softer than expected holiday sales performance point to the deepening problems at the retailer and concerns over its survivability. We will see how this plays out over the coming year but if you would like to read the full article please visit http://www.cbsnews.com/8301-500202_162-57348599/brisk-mega-monday-business-buoys-retailers/.

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.

A San Francisco-based portfolio manager recommends Sotheby’s (NYSE: BID, $29.37) as a Buy.  The presenter highlights China as a major expansion opportunity for the company.  Dramatic growth in the number of high net worth individuals in the country and rising interest in Chinese classic and contempopary art have made China a key area of focus for this leading auctioneer of fine art.  The current valuation doesn’t reflect BID’s prospects in this relatively new market for the company.  The stock is also significantly undervalued based on historical EV/EBITDA multiples and versus other global luxury brands.  BID could also become a takeover target for LVMH or other entities such as Qatar Holdings.  The upside is 50%.

A Boston-based portfolio manager continues to recommend America’s Car-Mart (NASDAQ, CRMT, $40.00).  The name was presented at our April idea forum in Boston.  America’s Car-Mart, an automotive retailer, operates in a niche market, targeting used car buyers in rural areas that have little or no access to traditional financing.  The company had a very strong Q3, with sales rising 17% and the ASP gaining 3.8%.  The presenter also notes that the company continues to buy back stock.  CRMT has repurchased 19% of shares since February 2010.

A Boston-based portfolio manager presented Summer Infant (NASDAQ: SUMR, $6.99) at a Roulston Research idea forum in February.  This designer of branded baby and toddler products reported solid Q3 results.  Key takeaways from the quarter include:

Sales were up 27%, and most of the gain was organic (the company made a small acquisition earlier this year)

International sales are strong

There is less customer concentration now

The company’s new baby car seat will be ramping up in 2012

SUMR has been paying down debt since 12/31/10 and reduced it by further $3.6 million in Q3

The company will launch a category killer baby monitor w/free internet viewing capability world-wide on various devices. Customers will pay 1-time $350 for product and then the family will be able to see the baby from anywhere without paying monthly or any other fees

As the 2011 holiday season is entering its final days it is apparent that retail sales during the period are doing better than expected despite unemployment still being 8.6% in November. Stores are providing discounts to attract shoppers that are searching for bargains but not at the level of desperation that was seen during the recession. Discounts were in the 30-40% range instead of the 50-60% seen last year. The return of layaway plans attracted low-income shoppers to pay for their holiday items in this tough economic time. Craig states, “Some of the women’s retailers that were doing well earlier in the year are getting hurt this holiday by the resurgence of the department store.” Department stores are expected to be the big winners this holiday season driven by the exclusive brands and broad product offering. The mild holiday weather has been hurting apparel retailers as the traditional demand for winter clothes has been soft. To read the full article please visit http://www.reuters.com/article/2011/12/19/us-usa-retail-idUSTRE7BI12R20111219.

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.

Roulston Research Energy Partner John Hofmeister was interviewed on CNBC about the recent volatility in energy prices. He sees it as a combination of the uncertainty of global economic activity along with the problems in Europe where on a given day the supply and demand relationship could cause prices to increase or decrease one way or the other. The lack of confidence in a European solution is causing an uncertainty in the market and fear of a recession to grow which would cause demand destruction to start up. In addition, it has been unseasonably warm in the United States in November and December which has caused the heating oil and natural gas markets to be soft. The geopolitical uncertainty will be a factor for sometime to come so it will be important for the United States to become less reliant on oil from the Middle East. Egypt, Libya, and Syria are all major uncertainties right now and Iran is the wildcard with news of the country potentially blocking oil shippers from crossing the Straight of Hormuz in the Persian Gulf.

John’s biggest concern is that crude prices will continue to climb into the triple digits. Global growth is expected to be 4-5% and if we don’t have enough oil supply to meet the demands of China, India and the rest of the developing world it would slow global growth. According to John the United States has always played politics with the energy industry and the most recent example is with the Pipeline bill being attached to a payroll tax extension in Congress. This year consumers will pay the highest price of for liquid fuels in the country’s history and a lot of it has to do with the shutting down of the Gulf of Mexico and playing games with the pipelines for political reasons. He believes that the energy industry would be the driving force to bring the economy back but first the United States needs to take its energy policy seriously. To hear John’s full interview please visit http://video.cnbc.com/gallery/?video=3000062423.

Upon retirement from Shell as President in 2008, John Hofmeister founded and currently heads the nationwide membership association, Citizens for Affordable Energy. This Washington, D.C.-registered, public policy education firm promotes sound U.S. energy security solutions for the nation, including a range of affordable energy supplies, efficiency improvements, essential infrastructure, sustainable environmental policies and public education on energy issues. You read more about Citizens for Affordable Energy and his recently published book Why We Hate The Oil Companies at his website http://www.citizensforaffordableenergy.org/

A New York portfolio manager notes that while Rentrak (NASDAQ: RENT, $14.09) is a speculative play, the upside could be very big.  Rentrak is the only company offering stable TV ratings in every local market, a key advantage over Nielsen and other competitors.  The company started its TV Essentials business just two years ago and already has 100+ local TV stations signed up.  With 2,500+ total local and network stations, there is a great opportunity for expansion.  Rentrak already has 7 out of top 13 largest national ad agencies on board, a key factor underpinning growth in this business.  Management forecasts doubling of revenues annually for the next 4-5 years for TV Essentials with gross margins approaching 50%.  The company’s video on demand and box office businesses are two other important assets, projected to expand at double-digit rates with 75% margins.   RENT has a monopoly in box office measurements after it purchased Nielsen’s division in 2010.  The presenter believes that investors willing to be patient can potentially see up to 10x return.  The stock has dropped from $36 to $14 on the decline in the company’s original Home Entertainment business, but the other assets are poised to more than make up for it over long-term.