I hit up Quizno's for an after workout meal tonight, and I noticed a rather large sign there touting the flexibility of their combination meal deals. In bold letters... OVER 18,000 COMBINATIONS!! Now, there are three different types of combos offered there. These are (Sub, Soda, Chips), (Sub, Soda, Salad) and (Sub, Soda, Cookie/Brownie). I figured there are 30 different types of subs; this is probably an overestimate. At this location, there are no more than 10 different soda choices, and the same goes for chips. There are exactly 6 different types of salads offered. I have no idea how they came up with 18,000 combinations.
Using the above assumptions for what is offered, I calculated: 30*10*10 + 30*10*6 + 30*10*2 = 5400 combinations. I know that I could be off on my estimates of how many different types of subs, chips, etc. are offered, but I don't think I'm that far off. Maybe they are factoring in different types of breads for their subs. I suppose that additional difference would get us over 18,000 combinations, but that sure seems like cheating. Anyway, onto Spam.
Spam... No, not that kind. I'm talking about Hormel Foods (HRL), the makers of Spam, the meat product. From what I've read recently, many are forecasting a decrease in hog prices. According to CSFB, if this decrease materializes Hormel could see a boost to their earnings by as much as 5%. This is one of the big reasons why they were recently upgraded by them. Hormel also sports a nice 2% dividend, and their operating cash flow continues to be fairly strong. I'm adding this to my watch list as a potential long-term position. And, just to be absolutely clear on Hormel... Spam is not a major source of revenues for them. I believe Spam accounts for 2% or less.
Today, Dryships (DRYS) reported its earnings. By now, you've all heard about my DRYS woes. I added it to my long-term portfolio recently, and it's down a decent amount. Why? Shipping rates have plummeted, as can be seen by taking a look at the Baltic Dry Index, or BDI. This isn't a widely known index, but for shippers, it is the index. The BDI is a weighted index that includes shipping rates for the three major classes of dry cargo ships: Handy (smaller), Panamax (medium), and Capesize (large). Anyway, the BDI dropped sharply in recent weeks, and the market punished the shippers. Despite this drop in the BDI, DRYS earnings this quarter were spectacular. This should hopefully stop the bleeding. In time, the BDI should recover, and when it does, DRYS (and other shippers, too) should be worth a good deal more than the current market valuation.
4 comments:
Well your 5400 is an estimate right? Maybe the real value is closer to 6000. This is pretty silly but they may be advertising 18000 when the real number is 6000 because they include sub size as an added permutation. Again if that’s what they’re doing I think it’s silly. Any ways, that’s the big thing these days, customizing your combo. Like we didn’t have enough options already, haha.
Hormel is a household name. That’s true they have many other products aside from Spam. Accordingly, I would not base too much onto a projected decrease in swine prices. That’s of course unless pork products constitute a good % of their line. Good plan to have Hormel on your watch list but study it more as you always do.
Well, did you factor in the possibilities of choosing different vegetable toppings and condiments for the sandwhich?
I was thinking either sub size or as BruteForce suggested bread type as in wheat, white, etc. I don't think they included vegetable toppings as permutations. If they did they'll have a much larger figure than 18k. But all are equally silly IMO.
It's all really quite silly. I just don't see how they came up with the 18,000 figure. I mean... why not just pick a rounder figure. They could have easily said 100,000 if they wanted to use combinations of toppings, breads, sizes, etc. Or does the not-as-round figure make it more believable?
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