The opening makes Amazon Revere’s largest employer, a title previously held by Necco. House Speaker Nancy Pelosi told CNBC on Wednesday that additional financial aid to Americans is needed to support the U.S. economy’s recovery from the coronavirus-induced recession. Lemonade’s donations to charities and no-hassle approach to insurance makes it appealing. That’s why you should buy Lemonade stock on a dip.
REVERE, Mass. (AP) — Amazon has opened a delivery center in a former Massachusetts candy factory famous for making Sweethearts and other classic confections.
The Seattle-based tech giant said Wednesday that some 200 people will start working at the former Necco factory in Revere this week.
The company has leased the 800,000-square-foot (74,300-square-meters) building to sort deliveries coming from its larger distribution centers before they’re sent out to area customers.
The opening makes Amazon the city’s largest employer, a title previously held by Necco.
Revere and Boston had unsuccessfully pitched the former Suffolk Downs horse track as a potential site for Amazon’s planned second headquarters.
Massachusetts House Speaker Robert DeLeo, who represents the city, said the center provides a welcome boost to the local economy. Massachusetts had the highest unemployment rate in the nation in June, at more than 17%.
Necco, short for the New England Confectionery Company, was the country’s oldest continuously operating candy company before it abruptly shuttered in 2018.
More than 200 workers were laid off, and its brands, including Sweethearts, its namesake wafers, and the Sky Bar, were sold.
The 50-acre property is owned by Clarion Partners, a New York real estate investment company that bought it for $355 million earlier this year.
July 22, 2020
Pelosi says more aid directly to Americans is needed to support economic recovery
House Speaker Nancy Pelosi told CNBC on Wednesday that additional financial aid to Americans is needed to support the U.S. economy’s recovery from the coronavirus-induced recession.
“You can help people stay open, pay the rent, pay the utilities … even pay employees, but if you don’t have people coming in the doors, you’re still having a problem,” the California Democrat said in an interview with Jim Cramer on “Mad Money.”
“So that’s why we want to put money in the pockets of the American people so that they can, in this consumer economy, spend, inject demand into the economy, create jobs,” she said.
Pelosi’s comments Wednesday come as lawmakers in Washington begin working on another piece of coronavirus relief legislation, ahead of the scheduled expiration of a key financial lifeline for millions of Americans who lost their jobs during the pandemic.
The talks on Capitol Hill also are transpiring as Covid-19 cases in the U.S. have been rising in recent weeks. Daily deaths from the virus on Tuesday eclipsed 1,000 for the first time since May 29, according to the Covid Tracking Project.
House Minority Leader Kevin McCarthy, R-Calif., told CNBC on Tuesday that he believes it will likely be August before Congress approves another piece of coronavirus relief legislation.
Republicans and Democrats must iron out differences on issues such as liability protections for businesses; a potential second round of stimulus checks to individuals; and the federal supplement to unemployment insurance, which is one of the biggest unanswered questions.
The current $600 per week supplement — on top of state-level benefits — is set to expire at the end of the month. Republicans are considering extending it at a lower rate of $400 per month through December, CNBC reported earlier Wednesday. Some GOP lawmakers contended that $600 each week may be too generous and deter people from returning to work.
Senate Democrats have proposed tying the level of the federal supplement to state unemployment rates, with the weekly benefit amount being reduced as the economic conditions in a state improve. Democrats in the House extended the $600 weekly benefit through January in a $3 trillion rescue package approved by the chamber in May.
Pelosi told Cramer that an extension of the benefit is necessary because it provides “a floor for America’s working families,” comparing it to the support for financial markets provided by the Federal Reserve’s monetary policy.
“We should not be quibbling over $400 or $600 when people are in desperate need and have great uncertainty,” Pelosi said. “You know how the markets and the business community doesn’t like uncertainty. We shouldn’t inject uncertainty further into the lives of America’s working families.”
Pelosi also reiterated her support for another round of direct payments to Americans, building off of the $1,200 checks that many received earlier this spring. The White House and congressional Republicans also have expressed support for another batch of stimulus checks, but there is debate on who would qualify to receive them and the amount.
The ultimate support for the U.S. economy is reducing transmission of the coronavirus, Pelosi contended. “It’s all a health issue. If we just defeat the virus, we can open up our schools and our economy.”
Author: Kevin Stankiewicz
Buy Lemonade Stock on a Pullback to $70
Lemonade (NYSE:LMND) looks like a good investment in the medium term. But investors ought to wait for a pullback in Lemonade stock before pulling the trigger. In the longer term, the insurer could become a takeover target, although it will also face some important risks.
Lemonade has built several appealing characteristics into its business. First, according to the company, skimping on or denying claims doesn’t boost its bottom line to the same extent as other insurers. That’s because it donates the difference between its premiums and the amount it pays out in claims — with a ceiling of 40% of its premium revenue — to charities chosen by its customers.
However, it is interesting to note that Lemonade reportedly sells 75% of its premiums to reinsurers. It does so in exchange for a fee equal to 25% of the total premiums. Regardless, the fact that Lemonade has less incentive than its competitors to deny or shortchange claims is likely a great selling point.
Another important selling point is its fast, no-hassle service. According to a Seeking Alpha columnist, Lemonade’s “customers can file claims by chatting with AI bots, and they can receive claims only in three seconds.”
CNBC’s Jim Cramer says that the chatbots are great for millennials. Why? Because the members of that generation “hate talking to a human being.”
But I’m in an older generation. And when it comes to fairly simple tasks like signing up for a service or submitting a claim, I’d rather deal with a computer program. That’s because computers usually ask fewer questions and work more quickly than humans. So I believe that Lemonade’s approach is probably appealing to a majority of Americans.
The company’s gross written premiums surged from $9 million in 2017 to $116 million in 2019. Its net losses per dollar of gross written premiums plunged from $3.12 in 2017 to just 94 cents in 2019.
Further, the Seeking Alpha columnist pointed out that the insurer’s “revenue growth rate is much higher than [its] expense growth rate, indicating the high probability of generating profits in the next several years.” I agree with that assessment.
Are you still not convinced? Think about this. Lemonade now focuses on selling homeowners’ and renters’ insurance, but it has said that it would begin selling other types of insurance. In fact, the company recently announced that it would begin offering health insurance for pets.
As the insurer starts offering other types of insurance, it will likely not have to increase its marketing or administrative spending a great deal. However, its revenue will jump tremendously.
Over the long term, other insurers could begin copying Lemonade’s approach. They could start using AI -driven bots to a greater extent and donating a portion of their premiums to charity. Still, Lemonade has a first-mover advantage when it comes to using those techniques.
Moreover, based on the rapid growth of the company’s premiums, consumers seem to have already developed some loyalty to the insurer.
Given these points, I wouldn’t be surprised if Lemonade became a takeover target within a couple of years.
Now may not be the best time to buy the shares. Lemonade stock has nearly tripled since its IPO earlier this month. And in the broader markets, good news about novel coronavirus vaccines is causing a stir.
Therefore, it may be best to wait for a pullback to the $65-$70 range before pulling the trigger. At that point, the shares look like a good bet for those looking for a low-risk play on increases in millennials’ homeownership rates over the next 12 to 18 months.
As of this writing, Larry Ramer did not own shares of any of the aforementioned stocks. Larry has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful, contrarian picks have been Roku, oil stocks and Snap. Larry began writing columns for InvestorPlace in 2015. You can reach him on StockTwits at @larryramer.
Author: By Larry Ramer, InvestorPlace Contributor