24/7 Wall Street has once again dusted off its crystal ball and listed its annual list of brands that won’t last in 2015. The ten companies will disappear due to various reasons.
Zynga will be crushed by Web 2.0 companies; while BlackBerry will fall out of fashion
The failure of Zynga Inc (NASDAQ:ZNGA) to develop new applications of value will be crushed by Web 2.0 companies and Shutterfly, Inc. (NASDAQ:SFLY) will be a victim of fast moving technical developments and the inability to remain relevant, the list predicts. Consumer products brands such as Russell Stover, the third largest chocolate company in America, and Hillshire Brands Co (NYSE:HSH) will be lost to acquisition as will Time Warner Cable Inc (NYSE:TWC). BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) and retailers Lululemon Athletica inc. (NASDAQ:LULU) (TSE:LLL) and Aeropostale Inc (NYSE:ARO) will fall out of fashion and the last independent carrier, Alaska Air Group, Inc. (NYSE:ALK), will fall out of the sky, the list predicts.
The 24/7 Wall Street list has met with relatively interesting success in its five years of existence, the company’s success at predicting is just over 50 percent and even some of the companies that remain do so by hanging on a thread. As any quantitative stock picker knows a 50 percent accuracy rate can lead to stunning success if win / loss size is properly managed.
Wall Street predicted BlackBerry to disappear last year
In 2012, the web site predicted that Research In Motion would disappear as a brand and last year, the company changed its name to BlackBerry Ltd. (NASDAQ: BBRY) (TSE:BB) only to appear on this year’s list again. Last year the list, like many stock picks, had winners and losers. They accurately made calls on Nook and Leap Wireless correctly, as Barnes & Noble, Inc. (NYSE:BKS) announced it would spin off its Nook e-reader as sales continue to plunge. Leap Wireless was acquired by AT&T Inc. (NYSE:T) late last year.
The web site had some good calls last year that are still close to becoming prophecy. Martha Stewart Living and Road & Track magazines continue to suffer from limp revenue and are close to life support but still alive, while Mitsubishi Motors (OTCMKTS:MMTOF) (TYO:7211) and AB Volvo (ADR) (OTCMKTS:VOLVY) (STO:VOLV-A) (STO:VOLV-B) are still technically in business yet struggling. LivingSocial continues to offer Groupon-like deals, the WNBA to sell tickets and Olympus to make cameras, all on the previous list but just barely alive, the web site notes.
In determining what makes a potential loser, the publisher considers seven major factors:
- Declining sales and losses;
- Disclosures by the parent of the brand that it might go out of business;
- Rising costs that are unlikely to be recouped through higher prices;
- Companies that are sold;
- Companies that go into bankruptcy;
- Companies that have lost the great majority of their customers; and
- Operations with withering market share.
When brands on the list start to suffer from a mixture of these issues “they will be gone in 18 months based on our definition,” the publisher said.
List of brands predicted to disappear in 2015
The list of brands that are predicted to disappear in 2015 includes:
2. DIRECTV (NASDAQ:DTV)
3. Hillshire Brands Co (NYSE:HSH)
4. Zynga Inc (NASDAQ:ZNGA)
5. Alaska Air Group, Inc. (NYSE:ALK)
6. Russell Stover
7. Shutterfly, Inc. (NASDAQ:SFLY)
8. Time Warner Cable Inc (NYSE:TWC)
10. Aeropostale Inc (NYSE:ARO)
Read the logic behind each of these picks and wonder which 50% might remain in 2015?