Home Depot and Lowe’s are clear beneficiaries of a housing recovery. But investors might want to add PetSmart to that list.
Stew Milne / AP
“Right now about 62 percent of households, which equates to 73 million households, have pets. We believe we're incredibly well positioned if there's any type of housing recovery to take advantage of this.” (Read More: Cities With the Most Affordable Homes.)
Find out what Wall Street analysts had to say about Research In Motion, Tiffany and other retailers in this CNBC.com Stock Blog Roundup.
Source: Research In Motion
The encouraging reports about Black Friday sales did not extend to luxury and women’s apparel retailers, according to Dana Telsey, CEO Telsey Advisory Group.
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Take Costco Wholesale
], for example, which was up 6 percent to $101.88 Wednesday, within a few dollars of its all-time high, on word that management was returning $3 billion of cash to shareholders in a one-time dividend.
One time — that’s the problem. Costco’s dividend of $7 a share can be funded primarily with cash on hand; cash that shareholders already had a right to. Rather, management has decided to sell new debt to cover the payout. The one-time dividend is equal to 6.4 years’ worth of the retailer’s regular quarterly payout of $0.275, a 1.1 percent yield. To me, that sounds odd for a growth company that’s only been paying a dividend for eight years.
AP / AP
OptionMonster’s Depth Charge tracking system detected a surge of call buying in the stock, which has been working its way higher since the middle of last month. Early activity focused on the December 52.50 calls as buyers paid $0.50. Premiums then rose and larger blocks followed for $0.60 to $0.80.
The December 50 calls also saw a heavy buying, including a block of 20,000 contracts that went for $1.50. Volume was more than nine times the open interest in each strike at the start of the day, clearly indicating new activity.
“Really what happened during the quarter was they sold more high-end pieces and less low-end silver-type products,” said Brian Nagel, a senior equity research analyst at Oppenheimer. “That sales mix shift impacted gross margins.”
During the quarter, Tiffany’s
] gross margins fell to 54.4 percent from 57.9 percent in the year-ago quarter. Its results were also stung by a higher-than-expected tax rate and high precious metal and diamond costs.
After all, high taxes or low taxes, as investors we still want to make money. Historically, dividend-paying stocks have performed well. There are some recent notable exceptions to the rule though. Hewlett-Packard
] comes to mind rather quickly.
HP isn’t a rising stock paying a large dividend though, and that’s what separates the zeroes from the heroes in my opinion.
The cartoonist’s advice is sort of the simplified version of Nassim Nicholas Taleb’s “Black Swan” — and it’s something worth thinking about as the so-called fiscal cliff draws near.
Last year, the debt ceiling debacle threw a wrench into the markets, but this year, the cliff is starting to look more like a fiscal curb by comparison — investors had priced in a resolution on Capitol Hill from the get-go. Of course, it doesn’t hurt that most of Congress is populated by “Dilbert” characters anyway. That’s part of why stocks are trading so differently now than they were back when stocks sat a month away from Uncle Sam running out of cash.
Rosanne Olson | The Image Bank | Getty Images
Oil derricks in North Dakota pump oil from the Bakken Formation.
OptionMonster’s trade scanners detected the purchase of 5,000 January 2015 20 calls for $1.70 yesterday. The volume dwarfed the strike’s open interest of just 53 contracts at the beginning of the day, so this is clearly a new position.
] hit a 52-week low of $6.78 on Nov. 13 after Bank of America
] made a tender offer for some of its bonds, hoping to block MBIA from changing the terms of certain bond issues to protect its municipal bond insurance unit in the event of a default by its securitization business.
Is Andrew Mason, founder and CEO of Groupon about to get the boot?
“It’s to be determined,” said Aaron Kessler, a senior analyst at Raymond James. “Clearly, Groupon
] has had growing pains as of late the last couple quarters.”
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OptionMonster’s tracking systems detected the purchase of more than 4,000 December 17 calls, almost twice the previous open interest at the strike and therefore new positioning. Initial blocks priced for $0.53, followed by more chunks that went for $0.64.
Calls lock in the price where investors can buy shares, so they can generate some nice leverage in the event of a rally. They can also predict moves in the share price because large traders often amass calls before building a position in a stock.
Adam Gault | Getty Images
10. Affymax +256 percent
Not only has the commercial launch of Affymax’s
] once-monthly anemia drug Omontys started off strong, but investors are also rewarding the company for its efforts — and those of partner Takeda. Affymax shares are up more than 60 percent since Omontys was approved in late March. In other words, the “short the drug launch” thesis that has been nearly bulletproof in biotech for the past few years is not working with Affymax.