Coffee Beans and Analyst Days

A question is asked while getting coffee: Is there any difference between light and dark roasts?  One person confidently states that light roasts have more caffeine without having any evidence to back that up – but stating it definitively seems to do the trick (or perhaps the question was meant to be rhetorical).  It turns out the real answer is more complex.  The truth according to Kicking Horse Coffee is that “during the roasting process, a bean loses its mass….beans that are roasted longer are less dense…losing roughly 90% of their water content.  If you measure your coffee by scoops, light roasted coffee WILL have more caffeine since the beans are denser than a darker roast.”  Its worth noting that if you weigh out your scoops (really?!?), the dark roast will actually have more caffeine because it has less mass.  A little counter intuitive and certainly not obvious.

Molina’s analyst day this week could have been seen as “counter intuitive” as well.  While Josh has been to many MOH analyst days – this was with a brand new management.  Instead of being greeted with a cautious introduction, we were struck by the amount of information and specificity that Molina was willing to share with the audience.  Josh notes that he believes Molina was willing to share these “secrets” because they really weren’t secrets.  This speaks to the straightforward nature of the proposed turnaround and margin improvement.

In the “not obvious” category, we’d place McKesson.  We hosted management this week on the heels of their 4Q18 report where U.S. Pharma & Specialty segment op profit for F19 caused some concern.  We worked hard to understand more about (and size) the “unique” headwinds facing McKesson into F19 as well as the levers that should get them back to an aspirational (in the near-term) op profit growth in line with revenue. for more.