Laptop wars: Dell strikes back

Who would have ever imagined that a Dell (DELL) computer could be cool? That's what Dell has achieved with the launch of its new range of low priced, yet rabidly hip Inspiron laptops. Just in time for the back-to-school season!

The breakout of the new line was backed by a very strong advertising campaign. The whimsical TV spot cleverly emphasized on the vibrant array of colors available to match your individual mood and lifestyle. It was quite refreshing to see Dell selling image and emotion, instead of just deals, technical features and the ever lower price that shaved their margins to microscopic levels. (which ultimately led them to trouble a couple of years ago and forced the return of Michael Dell at the helm of the cybernetic behemoth). Coolness and value are a magical formula for the Millennial generation, whose scrimp-and-splurge philosophy in life is what makes them feeling completely in fashion with a Prada skirt and a Target t-shirt. It seems that Dell finally cracked the right value equation for today's consumer.

I am convinced that Dell is back on track and that we'll see more of this powerful combination of signature Dell value and the up-to-date, contemporary image that was so badly needed to put the brand back into the minds of the mobile generation. Next stop: smart-phones?... what do you think? Dell share price has been on the rise since July 2007. Right now, at $28, the stock is close to its 52-week high of $29.61, but it is still well below the $40 it commanded before the start of operational and pricing woes that hit the stock in the second part of 2005. With the strong demand for computers and particularly notebooks projected for the coming years, Dell seems well on its way to revisit that price level.

Fat profits with Alli

Glaxo SmithKline (GSK) has recently launched a new weight loss drug named Alli. Alli is more than a drug: GSK has designed a whole program around Alli, and in a very honest way, warns the public that losing weight with Alli requires discipline and commitment. This is, for me, the key to its incipient success. Obesity is a serious pandemic in America, and consumers are worried about their weight. But they are exposed to a constant barrage of weight loss products offerings of dubious procedence and even more questionable effectiveness; products that offer magic formulas to lose weight while you keep eating like a Roman emperor and spend your weekends watching TV in the comfort of your couch. A combination of skepticism and desperation grasp over-weight consumers who know they need help, yet feel they are victims of unscrupulous scammers who prey on their weakness: what to believe? Who to trust?. So, when a reputable, Big Pharma company like Glaxo SmithKline finally comes to the rescue and launches a weight loss program, consumer will listen... and buy. This a serious Company that can be trusted. GSK has launched Alli in a quite vigorous way, and it's diffcult to miss their very well done TV commercials and their aisle displays at key retailers like Wal-Mart and Walgreens. Awareness of the new proposition must be high, and I assume some robust trial has ensued. I think Alli is a great initiative from GSK; in my view, this business will turn into a gold mine for this Company.

At $53, GSK share price is a little depressed right now as collateral damage of the sub-prime-driven market turmoil. It looks like a good opportunity to fatten up your portfolio.

Disclosure: I own shares of Glaxo SmithKline

Coke is it!

I used to be an avid Pepsi drinker. For me, Coke was a fairly standard, no-frills kind of drink. However, during the last couple of years I've seen with growing admiration the dramatic push The Coca-Cola Company (KO) is making in terms of innovation and outstanding product quality. First it was Coke Zero. Although skeptical at the beginning, it took me a couple of months to try this product; I mean, what could be so different from Pepsi One, anyway? Boy, was it different!! The first taste made me a convert. What a product!! Refreshing, flavorful and yet quite light. This successful introduction was followed by Coke's latest brilliant moves: the launch of Diet Coke Plus -Diet Coke with added vitamins and minerals-, and the acquisition of Glaceau, the manufacturer of the wildly successful VitaminWater line. Both initiatives strongly position the company to fully leverage the already robust -and still growing- consumers demand for healthier, balanced products that support their quest for overall well-being. In the best tradition of a consumer goods leader, Coca-Cola is strongly supporting both products with integrated marketing campaigns across several mediums. Perhaps the best example of advertising at work is VitaminWater. After just a few weeks of closing the Glaceau deal, Coca-Cola launched a vibrant, massive multi-media campaign to support VitaminWater, reinforcing its positioning as a hip, alternative brand for the in-crowd.

All this activity has not gone unnoticed in Wall Street. Coca-Cola share price has increased from around $44 in October 2006 to $54 in late August. While at 24 times trailing earnings the stock is not exactly cheap by historical standards at this point, I think Coke's portfolio strategy is definitely working. The Company is asserting its leadership position in the beverage market through a demonstrated understanding of what the consumers want and, most importanttly, where they are going in terms of priorities and needs. Growth at Coke can only bubble up.