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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Diamonds and Dogs

11/1/18

Fitbit (FIT) getting in shape. The number two smartwatch maker is jumping 25% following better than expected earnings and raised guidance for the fourth quarter. Revenue rose a modest 0.3% year to $393.6 million ahead of estimates. International revenue grew 10%. During the third quarter, Fitbit sold 3.5 million wearable devices. Average selling price increased 3% year-over-year to $108 per device driven by the growing mix of smartwatches. Going forward, Fitbit could be a takeover candidate for anyone like Google that wants to compete against Apple.

Wayfair (W ) has a spending problem. Online home furnishings store Wayfair is down 12% to a five month low following earnings last night. The company missed by a wide margin even as revenue rose 42.4% year over year to $1.71 billion ahead of estimates. Customer acquisition costs had an adverse effect on the company's bottom line. Advertising was around $707 million or $196 per new customer. As one analyst put it, when customers only spend $443 a year, this seems like a rather excessive and completely unprofitable way to run a company. All the housing related stocks and companies are struggling right now with rising interest rates.  

Diamonds and Dogs market commentary is a journal of daily observations on anything that happens to be of interest to our author. Obviously, our primary focus is the stock market and world economic events, but for this page we have no defined topics. We want this page to be dedicated to the interests, concerns, and possibly to the financial gain of our clients and friends. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.