Investing
The Unusual Suspects for the Week Ahead (ATVI, TTWO, AMZN, GMCR, FNF, FAF, GERN, GYMB, JPM, MON, NBG, NFLX, SDTH, SIRI, TSLA, UAL, UTX, WDR)
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This weekend’s edition of The Unusual Suspects is different. While some earnings focus is made, there are several key events coming up that investors and traders alike will want to watch. Don’t forget about Friday’s unemployment figure because that will potentially be the tide that raises or sinks all ships. The cast of characters in this weekend’s Unusual Suspects is rather large and includes Activision Blizzard, Inc. (NASDAQ: ATVI), Take-Two Interactive Software Inc. (NASDAQ: TTWO), Amazon.com Inc. (NASDAQ: AMZN), Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR), Fidelity National Financial Inc. (NYSE: FNF), First American Financial Corp. (NYSE: FAF), Geron Corporation (NASDAQ: GERN), Gymboree Corp. (NASDAQ: GYMB), JPMorgan Chase & Co. (NYSE: JPM), Monsanto Co. (NYSE: MON), National Bank of Greece SA (NYSE: NBG), Netflix Inc. (NASDAQ: NFLX), Shengdatech, Inc. (NASDAQ: SDTH), SIRIUS XM Radio Inc. (NASDAQ: SIRI), Tesla Motors, Inc. (NASDAQ: TSLA), United Continental Holdings, Inc. (NYSE: UAL), United Technologies Corporation (NYSE: UTX), and Waddell & Reed Financial Inc. (NYSE: WDR).
We have compiled the news or events on each company here and we have offered color and handicapping figures on each if applicable for the week ahead or for longer-term developments in each.
Activision Blizzard, Inc. (NASDAQ: ATVI) has been stuck in a dead video game sector but it may have a new catalyst. Rumors abound that its new World of Warcraft “Cataclysm” edition will be out in early December in time for the holidays. Whether this will happen is unknown, but that might add a nice boost to end of year sales if it occurs. For its part, the company is keeping quiet. Speaking of video games, Barron’s called Take-Two Interactive Software Inc. (NASDAQ: TTWO) a ‘bargain in the sagging video game sector’ and at $10.25 its 52-week range is $7.00 to $12.57.
Amazon.com Inc. (NASDAQ: AMZN) could see additional pressure as earnings season gets closer because even after a 2.1% drop to $153.71 Friday, shares are almost 30% since before its last earnings. A pair of analysts voiced concerns on high valuations and a 25% run in the last month. As a reminder, Amazon.com has signaled in its prior quarter that margin issues are present and the competition for the eReader space is tight. The 52-week trading range is $88.27 to $161.78.
Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) is about to enter its second week after disclosing its accounting issues and SEC inquiry, and the damage could have more room to come as the class action suits are starting to come up. Shares closed down again on Friday with a 5.2% drop to $29.57. The stock was just under $30.00 as recently as late-July and the stock was at an adjusted $23+ handle when its 3 for 1 split went into effect in May. With a $19.87 to $37.97 range over the last year, there could still be more weakness as a bear raid continues to gain strength. Jim Cramer also added it to the SELL BLOCK this last week.
Fidelity National Financial Inc. (NYSE: FNF) and First American Financial Corp. (NYSE: FAF) could face continued pressure as reports of bank foreclosure document errors could throw millions of property titles into question. It will increase these firms’ operating costs to review each mortgage title and will bring down more scrutiny on their operations ahead. FNF closed down over 4% Friday at $15.04 versus a 52-week range of $12.60 to $17.00 and FAF closed down 3.1% at $14.48 versus a 52-week range of $11.90 to $19.57. Stewart Information Services Corp. (NYSE: STC), owner of Stewart Title, was only down 1.24% at $11.18.
Geron Corporation (NASDAQ: GERN) could find itself back in favor now that the ban on stem cell funding has been lifted. More importantly, its CEO is giving a keynote speech at the 2010 WORLD STEM CELL SUMMIT this week in Detroit. What will be discussed is not known but chances are that the CEO won’t just say that stem cells offer a bright future to science. At $5.45, the implied stem cell public company sector leader has a 52-week range of $4.37 to $7.18.
Gymboree Corp. (NASDAQ: GYMB) saw a huge surge on Friday of 20% on 10-times normal trading volume to $49.86 and the 52-week trading range is $37.26 to $55.27. All of this was on a possibility that the firm was putting itself up for sale, and based upon the reaction it seems a safe bet that it could announce a formal exploration of a sale this coming week.
JPMorgan Chase & Co. (NYSE: JPM) was featured positively this weekend in Barron’s as Andrew Bary wrote, “Even under stricter regulation and tougher capital-adequacy rules, the bank should do well and be able to boost its dividend, says CEO Jamie Dimon.” At $38.81, its 52-week range is $35.16 to $48.20.
Monsanto Co. (NYSE: MON) cannot win for losing when it comes to its share performance tied to issues over its new corn yields and over ongoing fears about Round-Up’s ties to health concerns. At $48.26, its 52-week range is 44.61 to $87.06. Thomson Reuters has estimates of -$0.06 EPS and $1.82 billion in revenue. Just 90 and 60 days ago the company was expected to be profitable and now the questions looms over whether the forward $2.84 EPS for AUG-2011 has come down enough as the estimate was $3.02 just 90-days ago.
National Bank of Greece SA (NYSE: NBG) could be a secondary beneficiary of a Greek support mechanism from none other than the Chinese. Chinese Premier Wen Jiabao said on a visit to Greece that China will continue to buy Greek bonds and that China will create a $5 billion fund to help Greek shipping companies buy Chinese ships. At $2.25, the 52-week range is $2.11 to $8.37. The question is whether Ireland’s woes bring down the rest of the PIIGS.
Netflix Inc. (NASDAQ: NFLX) may feel additional pressure this coming week as analysts continue to struggle with its valuation and as the stock is now about $20.00 off the high since Thursday. Oddly enough, IBD kept it as the #1 stock chart on the IBD 100, which makes it one of the longest streaks we have seen with the same leader.
Shengdatech, Inc. (NASDAQ: SDTH) saw shares drop as much as 7% after its CFO resigned on Friday after the closing bell. The company noted that Andrew Chen had no disagreements with Shengda and the chemical products company has already hired a search firm to find a replacement and it has named Chief Operating Officer Anhui Guo as the acting CFO until a replacement is found.
SIRIUS XM Radio Inc. (NASDAQ: SIRI) raised its guidance again. On Friday it gained more than 3% to $1.24 and it ended last week up 5%. The more important issue here is that the $1.25 prints from early May is the 52-week high, so any additional gains would mark 52-week highs and take the stock back to where it was in September-2008 before the meltdown started.
Tesla Motors, Inc. (NASDAQ: TSLA) gets to join others in bad PR over RECALLS. The company waited until Friday night to announce that it was launching a voluntary safety recall on Roadster models 2.0 and 2.5. The company said that the 12v low voltage auxiliary cable from a redundant back up system for headlamps, taillights, turn signals and hazard lights, and airbags in the unlikely event the primary 12V power fails or drops below a minimum threshold value. This is voluntary and not a game-changer and it is probably expected that a new technology for a new model might have issues here and there, but at $20.60 and a post-IPO range of $14.98 to $30.42 that this could add some weakness.
United Continental Holdings, Inc. (NYSE: UAL) began trading now as the unified result of the Continental-United merger. The $24.70 price was given a surviving 52-week range of $6.23 to $25.45. We gave a long synopsis of the airline sector on Friday showing how the fleets and operations compare to the rest of the airline sector.
United Technologies Corporation (NYSE: UTX) was given the Barron’s cover story this weekend title The Quiet Giant where it said that United “has a lower profile than some other industrial titans, but its prospects look decidedly bright” and said its portfolio is better balanced than many conglomerates and an $88.00 target was mentioned from Jefferies. After a $71.13 close on Friday and a 52-week range of $59.31, we’d look for up to a $1.00 higher open in a market-neutral stance on Monday.
Waddell & Reed Financial Inc. (NYSE: WDR) rose 0.7% to $27.55 after the flash crash report tied an algorithm trade from the firm pushed through by the firm of about $4.1 billion in the futures market was the flash point of the flash crash. The company has denied ill intent and wrongdoing, but the public backlash here could lead to more pressure against the firm. The 52-week trading range is $21.52 to $39.24.
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JON C. OGG
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