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Putting Loose Change Out Of Its Misery, One Jar At A Time, With CSTR

By
Brian Laung Aoaeh
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0

Last summer, after amassing a jar full of quarters, dimes, pennies and nickels I wondered how I might be able to convert them into dollar bills. That is when I came across Coinstar Inc – CSTR.

How?

CSTR makes money by providing a range of services tailored to the individual consumer. These services consist of;

  • Coin-counting machines,
  • Electronic payment services, and
  • Entertainment services.

These products and services operate on a self-service model and;

  • CSTR’s 12,800 coin-counting machines have helped customers count more than $13 Billion worth of coins since the company’s inception in the early 1990’s.
  • The company operates 19,300 point-of-sale terminals, and 360 e-payment kiosks.
  • CSTR also operates 320,000 entertainment services machines.

Where?

CSTR’s products and services exploit retailer’s store-front space. The company does business in the US, Mexico, Canada and the UK.

Why?

CSTR’s retail partners earn a portion of the fees that the company charges its customers. This means that valuable real estate space which would otherwise be under-utilized, becomes another revenue generator for organizations that enter partnership arrangements with CTSR. In addition;

  • The company has struck partnership agreements with more than 100 retail outlets.[i]
  • The company has unveiled a new service that enables consumers directly deposit coins into individual checking accounts.[ii]
  • CSTR continues to attract new partners for its Coin to Card™ program, most recently adding Circuit City Stores, Inc. to a list that includes iTunes, Amazon.com, Borders, Hollywood Video, Linens ‘n’ Things, Pier 1 Imports, Starbucks, Virgin Digital, and Eddie Bauer.[iii]
  • CSTR has entered a strategic partnership with the market leader in stored value card solutions in the UK. This agreement enhances the company’s UK Gift Card Mall program, and provides retailers with another distribution channel. It also offer’s consumers more options for purchasing gift cards without necessarily visiting the issuing merchant’s store.[iv]

Future Prospects

CSTR’s future prospects look excellent:

  • Obvious opportunity lies in geographic expansion, particularly in Western Europe, for the short term, and possibly in promising emerging markets in the long term.
  • The company’s partnership with McDonald’s Ventures, LLC in Redbox Automated Retail, LLC – a DVD kiosk operation, has yielded brilliant results. Redbox has experienced growth of more than 100% in kiosks that have been in operation for more than one year, also Walmart Stores and Walgreens have begun testing Redbox kiosks in a number of locations. 2007 could see significant growth in the number of Redbox kiosks in operation – even as Blockbuster continues to battle declining sales.[v]
  • CSTR has taken steps to make it difficult for direct competitors to wade into its turf without expending significant resources – the partnership agreements it has entered offer immense protection, also the company holds more than 50 patents that govern various aspects of its business.

Threats

Factors that may threaten CSTR’s growth include:

  • An economic slowdown that prompts consumers to become more frugal, thus stunting business in the company’s entertainment services.
  • Security glitches in its electronic payment services could lead to a loss of confidence among customers. I would peg this as a low risk.
  • As growth accelerates, there will be more need for costly investments in technology, it is not clear if demand for CSTR’s services will grow quickly enough to cover such investments.

The company’s management has indicated that it will focus on[vi]

  • International expansion,
  • Product and service expansions,
  • Expanding the number of units in operation,
  • Stronger customer relations, and
  • Growth through acquisitions.

Presently, CSTR does not have any significant direct competitors. That should bode well for investors that do not mind exchanging coins for CSTR’s shares.

December 12, 2006

[i] http://www.coinstar.com/us/html/A4-2

[ii] Bruno-Britz, Maria, Coinstar to Enable Direct Deposit of Coins, October 31, 2006, www.bamktech.com, accessed on December 11, 2006.

[iii] Businesswire release, December 07, 2006, accessed on December 11, 2006.

[iv] www.finextra.com, Coinstar and PrePay Technologies ink Distribution Deal, December 11, 2006, accessed on December 11, 2006.

[v] Seeking Alpha, DVD Kiosk Industry: Coinstar/Redbox Seeing Strong Growth, November 3, 2006, accessed at http://biz.yahoo.com/seekingalpha/061103/19854_id.html?.v=1 on December 11, 2006.

[vi] Coinstar 2005 Annual Report, accessed at www.coinstar.com on December 12, 2006.

Investing Dogma That Has Ruined Many – Think Again On Holding Long Because Soon, Long Will Become Short

By
Tekedia Editors
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0

The old dogma that existed for decades is that investing and putting money in equities and leave it for long-term will make you a rich man. Sure, it worked. Between 1982 to 2000, the S&P climbed from 102 to 1527- a monster 1397% increase. But alas, the world has changed since then. Volatility in market has become so common because information flows so fast and individual investors get so much details that freak them out much often. In this 24-7 news cycle, the small guys hear all and with the cable business desks, the psychology of individual investing has never been worse.

 

Bad news brings good ratings and do not bet against that any problem in the market is magnified by cable business anchors. In essence, as they talk about the economageddon, the small guys pull their monies from the market thinking the end is near. According to Federal Reserve, money lying largely idle in bank and money markets was $9.36 early March 2010. In May 2007, it was $7.44. So what is happening? People are moving money to safe havens and out of markets.

 

These are the class of investors that sell on dips and return to the market when it has climbed. They leave again when it dips again. Compared to the pros with all their computers and who-knows algorithm that buy on dips, the small guys is left confused and traumatized by market misses.

 

When you think the market is back to normal, Greece, PIIGS, and all variants of troubles emerge and the markets get crunched again. The question is: does it make sense to compete with the pros if you have no personal or individual investing strategy? The answer is Yes or No.  The pros will always win because they source for information and follow trends more than the small guy. And their machines are very sophisticated. But they can be burnt also.

 

For the small guy, this era of volatility means having super safe equities in your portfolios-big caps though slow growth. You can live on dividends and look for those stocks to snail climb. Just note one thing, the concept of putting money for long-term and expect a big return is a mirage. What matters now is timing: it could be short or long-term. But timing is what matters people of earth.

 

Why? It is possible that you invested at the peak of 1998 and left the market at the bottom of 2008; you might not have enjoyed the long-term strategy dogma.

 

By next year, I expect interest rate to take off. What does that do to your investing strategy? Confidence in this market could be tough. But I have learnt one thing: following emotions and news cycle without a clear strategy is very bad. Develop a plan and follow it up.

 

The day I bought Citi at the bottom, I had this understanding that I could sleep in the night. It was cheap, not by financial ratios, but by being Citi. But nothing is normal as even the mighty WaMu is nowhere. What does that tell me? Watch your shoulders and have an exit plan. I cannot expect it to grow for ten years to $40. Why? Stocks grow in cents, but fall in dollars. When it reaches $8, I am out, and I hope it does.

 

If you believe the long-term mantra and got in 2000; you might have been off by 28% since S&P trades at 1089 this week. That is what you gained by long-term strategy.  Timing is everything!

 

Provided that unemployment stays high, credit tight and consumers not spending, growth will tank and returns may not be promising. Large cap and stable firms may be the best place to put money in equities.

 

I think so because there is nothing fundamental in today’s economy with government stimulus, artificial low interest, terrible commercial and residential real estate and non-spending consumers. When the economy gets itself out of the low interest and all the global stimuli, then we can know if we can stay we have recovered from the recession. Right now, the global economy is still on life support. And you must hold that dogma of long-term with caution.

 

Dated June 2010

The Irrational Rationality Of Global Crises

By
Tekedia Editors
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0

As a Nigerian, I like it when the price of crude goes high. After all, my native country gets more that 80% of its foreign earnings from crude. So, anything that makes it to go up is always appreciated.

 

I have predicted that the price of crude will go up. I stand on it primarily because BP oil spillage just helped me out. Temporary scarcity due to new government maneuvers with the offshore drilling will cause price to spike a bit. Or the psychology of a major regulation will make speculators jack up the price.

 

However, without the BP oil spill, the short term crude price seems to be going low. Why? The world could experience another dip into recession, making cautious and anxious executives watch their shoulders as they plan to ramp up global production. Sovereign debt is going to play a huge factor in these cyclical economic episodes and global production activity could slow down, again.

 

Think about it: if the euro continues to go down, some big manufacturing giants like Germany and France could export more and benefit. But there are many euro-zone nations that will not get much help from this.  Few of the nations will dominate the cake that will play out due to weak euro.

 

Simply, not much has happened in Europe over the long haul. Few of their firms created within the last fifteen years have made it to the top. Contrast that with American Google, Yahoo and possibly Facebook, you will appreciate the structure and pulse of the European economy; it is not that very dynamic in creating new innovations in new industries. It depends largely on the century old industries that power Germany and France, and England.

 

So what happens in weak euro will not be generally good for all the euro-zone nations with regard to exports as many have largely intra-euro trade. Unlike Germany which trades most with France, but remains #2 exporter in the world after China overtook it early this year; some of the smaller countries do little trade with non-euro nations.

 

So you get Greece, Spain, Portugal, Italy and Ireland cutting public spending and public wages, you have a problem in the short term in getting euro-zone growing. And this sovereign debt crisis is just beginning. I have predicted that within ten years, a major nation will pull out of the currency union. More problems are coming and euro has a long way to go.

 

Why? The Europeans are not ready for deep reform.  The labor laws are very anti-competitive and antiquated.  Most of their governments have this mirage that once the PIIGS cut down on deficits, life will be good. As they cut the deficits, the recovery will lag behind, and more pains and riots across the streets in coming months. The creation of a masochistic syndrome that  denies to solve the root cause in Europe which is reform, over the more political convenient fiscal discipline will continue to stall the competitiveness of many of the nations.  While Germany gets it, many do not and they find it hard to compete.

 

Now, back to African Union.  They are setting good standards for the creation of the single currency. I hope we hold off on it for a long while. But if they follow on with it, they must understand that states play like humans because humans govern states.  Before Spain and Greece made it into euro, they demonstrated clear strategies on reforms to increase productivity, advance labor laws, and competitiveness. Once in, they forgot.

 

In my talk at the African Union congress last year, I made this case clear: this most be an ongoing benchmark and standardization process if we have to do it. The reason is that many states could come and bring others down with them. Unfortunate for Africa, the big ones are the most fiscally irresponsible. Yes, when you have Nigeria in West Africa acting weird, the small ECOWAS nations are in trouble. In Europe, at least the big nations watch over the small guys, unlike ours.

 

So what is all this? It is a strange world when solid Europe could be worried. You know Hungary is now in the equation. We are moving from PIIGS to PIIGSH!

 

But do not worry, all the problems in growth that Europe will cause the world will be offset by gains that Asia powered by China will give the world. Europe has since diminished its shock powers on the world GWP. In the old world, Europe weeps, the world dies; not anymore. In measurable ways, I am confident that people will get used to European problems in the next 15 months as they will be coming.

 

Things look very irrational these days; you have the oil price going low; a weakening euro; sovereign debts crises;  and yet fairly good earnings  from companies in the latest quarter; and more other things that cannot be easily correlated without unusual assumptions. One of the assumptions being that earnings were good because many firms were restocking inventories, and we should not expect good returns in coming quarters.

 

You have a system where things become uncorrelated. Exactly what you get when the states are micro-managing the economies and market forces are diminished. Banks declare profits just by taking near zero interests loans from the Federal Reserve and Central Bank of Europe and do nothing creative to the economy. A total disequilibrium and the recoveries continue to recover.

 

Editor’s Note: originally written in 2010

Virtual Classroom And Lab – A Model For Improved Technical Education In Africa

By
Tekedia Editors
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0

Advances in information and communication technologies (ICT) are becoming central to the social and economic developments of nations. ICT has offered means to transact businesses and transformed nations and organizations into knowledge based economic structures and data societies with electronically linked interdependent relationships. Education in the 21st century is best positioned to utilize these evolving opportunities to lift a higher percentage of the global population out of illiteracy and poverty.

 

Through Internet, the international boundaries have shrunk and the movement and transfer of ideas across nations by industries, academia and individuals sky-rocked. For UNESCO and other organizations focused on facilitating global literacy especially in the developing nations, Internet Virtual Classrooms and Labs (IVC) would be pivotal to realizing their objectives faster and with lesser resources.

 

Specifically, semiconductor technology has remained pervasive in shaping all aspects of modern commerce and industry. Being pivotal to many emerging industries in the 21st century, it occupies a central position in the global economy. Because Internet, medicine, entertainment and many other industries cannot substantially advance without this technology, it occupies a vantage position in engineering education in many developed nations.

 

These nations invest heavily in microelectronics education as in the United States where the MOSIS program enables students to fabricate and test their integrated circuits to enable full cycle design experience.  On the other hand, developing nations increasingly lag behind in developing and diffusing this technology in their economies owing to many factors which include human capital, infrastructure, among others. Notwithstanding, the Internet offers opportunities to bridge this widening gap by using IVC to harness the skills of experts in the developed nations and virtually export them to the developing ones. This article describes the IVC challenges and opportunities in the developing nations.

 

What is IVC? This is a ‘classroom’ on the Internet where instructors and students interact via computers. Besides lecture notes, VOIP (Voice over Internet Protocol) phone, live-chats and online-conferencing are vital components of this classroom resources. The motivation is to create a virtual traditional classroom on the web and educate students separated by physical distance from the instructors. Many US and European universities use IVC to coordinate their satellite campuses and distance education programs.

 

A. The merits/drawbacks of IVC

  • IVC is not limited by distance, allowing lectures to be delivered across national and continental boundaries.
  • IVC offers the platforms to harness the brightest minds to teach a larger spectrum of students globally.
  • At the long-run, the benefits of IVC supersede the cost of implementation.
  • The main drawback of IVC, though video conferencing is eliminating it, is the impersonal delivery method which could be challenging to some students.
  • The courseware and labware could be reused over time towards saving cost in the long-term. IVC offers a good archival capability to store and disseminate materials developed by leading experts.
  • Another is the investment required from poor nations to fund high speed communication systems needed for IVC.
  • To the developing nations, it provides a framework through which they can tap the pool of their experts in Diaspora which increasingly prefer to live in the developed nations.

 

There are many challenges to the deployment of IVC in the developing nations. Some are:

  • Electricity
  • Telephone facilities
  • Broadband telecommunications
  • Computer systems
  • IVC Accessories
  • Lack of adequate manpower

 

Though these problems are widespread in the developing nations, some of the schools, especially the private ones which are better managed have good facilities. Consequently, they are well positioned to benefit through IVC the expertise and skills of experts across the globe. This opportunity is strategic considering the lack of enthusiasm from top global scholars in traveling to these regions owing to their high crime rates, transportation safety problems and incessant political instabilities. Besides, The One Laptop Per Child Initiative which is poised to make laptops available to students will certainly help to improve some of these conditions over time.

 

The Internet offers the core platform in designing the IVC. IVC is a network of Internet-connected computers which have been tailored for learning. These computers are equipped with audio, video, test-messaging capabilities with huge storage systems. In designing this system, quality is important to facilitate efficient transfer of ideas between the parties.

 

In conclusion, as information and communication technology continues to shape all aspects of human endeavors, its application in education in the developing nations would be vital. These regions lack the human and institutional capabilities to deliver some of the emerging concepts to their teeming student populations. IVC if properly implemented will offer a highly needed solution to access the global pool of top scholars for these nations. Though complex, appropriate IVC deployment would facilitate semiconductor technology acquisition and diffusion into these economies via sound microelectronics education.

mHealth And Why That Could Change Healthcare in Africa

By
Tekedia Editors
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0

One of the most prevalent problems in Africa is healthcare delivery. For decades, we have been unable to solve it. Lucky enough, the continent has improved its mobile communication system. From Nigeria to Botswana, Africa is up and calling, wirelessly.

 

Now, is there an opportunity for our continent to develop our healthcare, from scratch, based on mobile medicine? Just forget the old health model of building clinics everywhere and help citizens to make their cell-phones connecting nodes for selected and expanded hospitals.

 

In that case, people can actually get care without having to travel four hours to see a doctor.  Can the continent build health hubs and health spots that can be equipped with equipment for diagnosing some common ailments with data sent wirelessly to hospitals? Hospitals then can send prescriptions to local pharmacies? Or perhaps request for physical visits when necessary.

 

How can we make doctors to see lesser patients so that people do not spend two hours in hospitals just to have a 4 minute discussion with a doctor? It is already known that our medical staff are stretched to the core. But there is an opportunity from technology and we must take advantage of it.

 

That is where the Africa has to be. It must be. Stakeholders need to congregate for this because now and the future is mobile.

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