Consumer
| Today's Consumer Stories | |
|
News and Views
|
Macro/Technicals
|
Earnings
|
Sector News, M&A, Capital Raises
|
Research Away
|
Top Events/Earnings Calendar
|
Cantor Flows
|
|
News and Views
Cracks showed today in the rally as some real companies came under pressure yesterday with disappointing results from Consumer Staples GIS, K, CL, and BG. Volume was ahead of the week’s average but still uninspiring as volume was lighter on the way up from being down 1% today early. Long story short is that Financials put the markets on their back as positive comments about GS got the market to rally in the afternoon. Today’s earnings and macro news will guide us, but if the results are even somewhat near consensus it is month end so I think we will see some late day window dressing even if the markets are under a little pressure early ……that is IF the news is not a disappointment.
Buying Consumer Staples on weakness, 4-1 buys
Sellers/Shorts of Consumer Discretionary, 4-1 sells
RAH opened on the highs and closed on the lows (bearish signal) just above the 50 day sma 57.95. If that level does not hold accounts should look to lighten up or short the stock. Conversely, if it does hold the line it could move back to $60. Pick your poison.
MWW better numbers than expected. Positive for MAN, RHI, and KFY
EXPE better numbers than expected. Positive for PCLN and OWW
NFLX upgrade, bid up 3%
CSTR earning and guidance last night had stock lower.
Macro/Technicals
SP Futures: 1092; -5.00;SPX: 1101.53; -0.42
RLX:
RTH: 88.74; -.77
XLY: 31.23; -.51
XLP: 26.91; -1.21
VIX: 24.13; -.49
Leaders: GAP, BC, GMCR, SCI, SKX, CROX, ELY
Laggards: CRI, BBW, K, CL, CAB, GIS, PLCE, SFD, WTSLA
Earnings
EXPE Expedia reports Q2 EPS $0.44 ex-items vs Reuters $0.41 ($21.07)
Company reports revenues of $834.0M vs Reuters $845.5M.
NTRI NutriSystem reports Q2 EPS $0.40 cont. ops vs Reuters $0.35 ($22.25)
Company reports revenues of $141.6M vs Reuters $136.5M.
- Adjusted EBITDA was $26.2M, an increase of 57% as compared to $16.6M for Q2 2009.
- Based on the share repurchases and current business trends NTRI is raising the lower end of itsfull year diluted EPS guidance to $1.07 per share while maintaining the upper end of guidance at $1.12 per share Reuters estimate is $1.10.
MWW Monster Worldwide reports Q2 EPS $0.00 ex-items vs Reuters ($0.05) ($13.32)
Company reports revenues of $215.0M vs Reuters $216.8M.
- Bookings increased 19% to $208M from $175M in Q2 of 2009
- Guides Q3 EPS to ($0.02)-$0.02 vs Reuters ($0.01); guides revenues to $218-$228M vs Reuters $231.1M, and bookings $215-$225M
Guides f10 EPS to ($0.14)-($0.06) vs Reuters ($0.15); guides revenues to $890-$925M vs Reuters $903.8M, and bookings in range $930-$970M
Sector News, M&A, Capital Raises
AMZN WSJ looks at Amazon.com's new Kindle ($116.86)
Without coming to any conclusions on the stock, a "Heard on the Street" column summarizes Amazon's surprising introduction of a cheap new Kindle -- so cheap that the company may be taking a loss on each one it sells -- very shortly after slashing the price on the old one. The price remains too high for that many people to be tempted to buy one, and competitors' devices are also threatening. There is also the growing likelihood that ebook customers will eventually start shopping at Apple (AAPL)'s iBooks store. The column notes that investors who don't trust Amazon's long-term focus on profits even at the expense of short-term pain are probably taking deep breaths right now.
Farooq Kathwari, CEO of Ethan Allen (ETH), tells Cramer that the company is making money again, albeit from a lower base. Cramer says he is still a buyer of the stock.
DLTR Barron's Weekday Trader is positive on Dollar Tree ($43.44)
The article notes that the stock is the cheapest in its peer group at 13x forward earnings, while it consistently beats Street expectations and has an above-average long-term growth rate of just over 14%.
SHOO Steven Madden to replace inVentiv Health (VTIV) in S&P SmallCap 600 ($38.48)
The change will occur on a date to be announced. VTIV is being acquired by Thomas H Lee.
SWK Stanley Black & Decker acquires CRC-Evans ($57.27)
SWK announced it has acquired CRC-Evans International, a global supplier of specialized tools, equipment and services for the construction of oil and natural gas transmission pipelines, for $445M in cash from a group of investors led by private equity firm, Natural Gas Partners. SWK says the acquisition of CRC-Evans will be immediately accretive to earnings and will be over $0.10 accretive to earnings by year three. The acquisition will be funded with existing sources of liquidity and will not increase the company's year-end debt levels.
- The Company will host a conference call today, at 17:00 ET; (877) 242-3653; outside the U.S. at (763) 416-6917; also, via the Internet at
Research Away
NFLX Netflix upgraded to overweight from equal-weight at Morgan Stanley ($98.02)
DCF value for the shares is $140.
K ($47.98) Kellogg added to Top Picks Live at Citi The rating remains buy; target remains $61.
BJ ($45.04) BJ's Wholesale downgraded to neutral from outperform at Cowen & Co. Firm cites valuation as rationale.
CL ($78.12) Colgate-Palmolive downgraded to neutral from Conviction Buy at Goldman Sachs Target is reduced by 6% to $86. The firm notes slowing volume growth and increased spending from competition.
G ($15.00) Genpact downgraded to sell from hold at Kaufman Bros
VLCM ($19.25) Volcom downgraded to hold from buy at Needham
Top Events/Earnings Calendar
Today
Earnings:
PRE: FO, IMKTA, NWL, SR
POST: none
Events: HLYS Capstone w/Heelys
Cantor Flows
Consumer Staples: GIS, GMCR, IPAR, K
Consumer Discretionary: RSH, CRI, KSS
Consumer Services: MWW