Kerchunker Profile: Starbucks Aims to Dominate Tea

Starbucks is making waves as it opened its first Teavana Fine Teas + Tea Bar on Madison Ave in New York City last week.

Should investors take notice? A most resounding yes! Starbucks has transformed the way Americans drink coffee and you have to listen closely when CEO Howard Shultz states, “We'll do for tea what we've done for coffee.”

Oil Services Kerchunker Core Laboratories Reports Record Results.

On Wednesday, Core Laboratories reported record 3rd quarter results as new technology helped set all-time quarterly highs for EPS, net income and revenue. Its business continues to kerchunk, kerchunk, kerchunk. What makes Core Lab a great service company? It targets the more stable, less volatile production and production enhancement component of the oil companies’ budget. This makes results less cyclical and much more predicable than most energy investments. The proof is in the pudding. Over the last 10 years, sales growth has averaged 10% per annum while earnings have grown by over 35% per annum.

The Rise of The Recurring Revenue Portfolio

On the heels of my recent post "What Are Kerchunker Companies? 5 Reasons Why You Should Like Them," please watch this recent CNBC interview of Mike Smerklo, Chairman and CEO of ServiceSource. Many high tech companies are realizing what IBM did 20 years ago. The information technology industry can rapidly become commoditized so IBM determined that the company needed to shift its portfolio to a more balanced mix of high-value offerings. That meant a transition away from products (hardware) and growing its services and software businesses. Today, the cloud is enabling companies to offer Software as a Service (SaaS) which often boasts better customer retention and more recurring revenue.

What Are Kerchunker Companies? 5 Reasons Why You Should Like Them

"What the heck is a kerchunker® company?" you ask.  Kerchunker is a term trademarked by Runnymede professionals to describe service sector companies that are steady and often have recurring revenue models.  Hopefully, each quarter and each year, they grow... kerchunk, kerchunk, kerchunk!

US Service Sector Index Hits Highest Level Since It Was Created in 2008

The Institute for Supply Management (ISM) reported that its service index rose to 58.6 percent in August, 2.6 percentage points higher than the 56 percent registered in July. This marks the 44th consecutive month of growth and the highest reading since its inception in January 2008.

Follow The Leader: Investing In Chinese Service Sector Growth

According to Bloomberg, the service sector in Asian emerging markets is poised to exceed 50% for the first time. This is a historic milestone as Asia shifts its role as the world’s manufacturing partner to developing self sufficient domestic growth via its service sector. China’s 12th 5-year plan lays out specific guidelines and incentives to create the environment necessary for extensive development in the service sector. In 2012, China’s service sector accounted for just 44.6% of GDP vs the world average of 63.6% so there is huge room for growth.

US Service Sector Soars in July

"Don't call it a comeback / I've been here for years." - LL Cool J

The U.S. service sector expanded in July at its fastest pace in five months. The Institute for Supply Management (ISM) reported that its service index rose to 56 last month, exceeding economists' expectations for 53 and a significant improvement over June's 52.2. A reading above 50 indicates the sector is expanding.

U.S. Jobs: It's All About The Service Sector

The U.S. Service Sector is not only the economy's most diverse sector, it is huge - employing 90% of the workforce. Service workers are the highest paid and best educated, and they are the lowest paid and least educated. The sector encompasses neurosurgeons, college professors, delivery-truck drivers and dishwashers.

The United States Census Bureau published an interesting study entitled "1940-2010: How Has America Changed?" Looking at the American workforce, we see that it has more than tripled in the last 70 years with a major industry shift from jobs in manufacturing and agriculture (41.9%) to service jobs.  This mega trend is unlikely to reverse any time soon.

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