Posts by Jeff Macke
- Jeff Macke at Yahoo Finance14 hrs ago
Shares of Lakeland Industries (LAKE) are celebrating a nearly 40% jump today after CEO Christopher Ryan told investors the hazmat suit company was on pace to double its production capacity by January. Lakeland shares have been as high as $30 a share on Ebola fears, but the company says most of its supply was already spoken for by industrial customers dealing with toxins not-related to the deadly virus. With the expanded capacity Ryan says Lakeland will be able to pursue some of the big business opportunities being created by the tiny, but deadly virus.
Business should be better for Avon (AVP) but its not, shares are falling 7%. Although the maker of cosmetics posted better than expected profits, revenue fell slightly shy of estimates. Two years ago Avon was subject to a $10 billion unsolicited takeover from a German group, with funding support from Warren Buffett. Since then the direct seller of beauty products has been in a state of constant turnaround. Do that long enough and investors will eventually conclude you are just running in circles.
- Jeff Macke at Yahoo Finance19 hrs ago
The World Series is over and Halloween is upon us! It's later than you think and the reason why is that retailers are showing a tiny bit more restraint in terms of launching their holiday specials. The implications for consumer behavior and investing extend way beyond anything you're going to hear from the Fed about QE or government GDP data so listen up.
First the good news. According to a widely followed Deloitte holiday shopping survey consumers are feeling confident enough in the economy to spend more. Deloitte says consumers they surveyed plan to increase holiday spending by 13%. That number seems high but it's no surprise Americans are looking to buy stuff. That's what we do. What's notable about Deloitte's survey is that we're actually spending for people other than ourselves. For the first time in eight years Deloitte found a measurable uptick in the number of gifts we plan to give.
Goodyear Tire & Rubber (GT) rolling higher by over 4% despite a sort of weird quarter. The tire giant reported earnings well ahead of expectations despite missing on revenue. Goodyear says a drop in Brazilian new car production hurt Latin America, while a shortfall in replacement product hurt North America. Investors are less impressed at the moment as they try to piece together exactly what combination of global conditions would allow Goodyear to win. Despite today's bounce Goodyear shares are well off highs over $28 last summer.
One of the finest traditions on Wall Street is October ripping the hearts out of as many bulls and bears as possible. On that front 2014 will go down as a banner year no matter what happens between now and the close on Friday.
With yesterday's 1.2% rally the S&P 500 is now positive for October. That's right, positive. Since hitting 1,820 on the morning of the 15th the S&P500 has ripped 165 points or 9% in a straight line. The move has everyone groping for a reason. Technicians will point to support holding and buyers coming in when the S&P500 approached "correction" levels. Fundamentally inclined investors are claiming earnings were better than expected.
Of course perma-Bears hate all of this. They'll note, correctly, that earnings are growing more than two times the rate of revenue increases. That's unsustainable and has been for as long as anyone can remember. It should also be mentioned October isn't over yet. Later today the Fed is expected to announce the end of Quantitative Easing and tomorrow brings the latest absurdly rough estimate of GDP for Q3.
Cathie Wood of Ark Investment Management loves disruption, especially when it comes with some controversy. The thematic based investor thinks the companies fundamentally changing the way we go about our lives end up winning, at least as a group.
That’s an easy observation to share when markets are in euphoric phases. Remember, at one point someone, somewhere thought Pets.com was going to lead a revolution. It didn’t. Great idea-based companies that can also execute can be harder to find but for those with the brains to find them early and the gumption to stick with them make money.
In the attached clip Ms. Wood shares three picks that could disrupt your book.
It’s been a wild October for Netflix. The content maker / streaming service saw investors take it down by $100 on an earnings miss two weeks ago, though the company regained much of the drop last week.
- Jeff Macke at Yahoo Finance2 days ago
Last November 7th Twitter (TWTR) held its much anticipated IPO. Priced at $26 a share for well-placed insiders, the stock opened at $45.10, hit $50 and closed at $44.90. After a year of laughs, tears and dope jokes shares are set to open at $43 today, pretty much right where it started.
The reason shares are gapping down this morning has to do with somewhat soft engagement numbers, slowing growth and a concession from the company that its vaunted "One-Click" retail efforts are still very much in the experimental phase.
From a charting perspective, which is a decent way to look at the trading of emotion-based stocks like Twitter, the shares are simply filling a gap it left back in July. The most obvious trade, and by obvious I mean "insanely high-risk and not to be taken as advice," is to look for a long position around $40 a share with a stock 5% lower.
- Jeff Macke at Yahoo Finance3 days ago
Gas prices dropped again last week and are sitting at nearly four year lows but will it be enough to save Christmas?
First the good news. According to AAA the average price per gallon in the US is $3.04. That's a drop of 6-cents per gallon over just the last week. Gas prices are down more than 10% since Labor Day, much lower than where they were this time last year. If prices hold and all things remain equal that drop will lead to $50 billion in additional fuel savings over the course of the year.
Now the bad news: according to informed sources Santa's sleigh runs on good will, not unleaded. For most of us the price of gas per gallon is pain-weighted to the upside: we feel higher prices but tend to ignore drops, at least when it comes to other discretionary spending.
If you run an Internet search on gas prices and consumers you'll get back a weirdly high number of results from early 2012 when it looked like gas could go over $5.00 gallon. Wal-Mart and a host of other retailers were pointing to gas prices as a key factor in their inability to grow the top line.
- Jeff Macke at Yahoo Finance6 days ago
Shares of Ford (F) doing some hard core off-roading with over a 3% drop today. The company said third quarter earnings came in at $0.21 a share, a dime shy of expectations. The best interpretation of Ford's weak revenues, in light of the strength in the rest of the industry, is that the company got caught transitioning to a new F-150 truck at exactly the wrong time. It is also worth pointing out that Ford's getting its butt kicked by rival General Motors (GM) which has done nothing but recall cars and apologize for causing more than 20 deaths due to faulty ignition switches.
- Jeff Macke at Yahoo Finance6 days ago
Amazon (AMZN) shares getting beaten mercilessly this morning. Right now shares are trading about $280 in the pre-market. That's 10% lower than where Amazon closed and would bring year-to-date losses for investors to about 30%.
Wall Street and main street press are doing their best to convince you they know why Amazon keeps blowing up this year. "It's the lack of income! It says right there on USA Today!"At best that's half the story. At worst it's just a dumb way to think about investing on a quarterly basis.
Yes, Amazon lost a huge bundle of money. Net income was a disaster, just as they told us it would be three months ago. But EPS has never been Amazon's focus.
"The Company believes it will incur substantial losses for the foreseeable future... the rate at which such losses will be incurred will increase significantly."
That's from Amazon's S1 dated May 14, 1997. It might be the most honest thing ever written in a government filing.
- Jeff Macke at Yahoo Finance7 days ago
Caterpillar (CAT) treating the bears like litter-box filler and driving the whole market higher. Shares of the Dow (^DJI) member pushing $100 after the company reported $1.72 in earnings per share, trumping analyst expectations for $1.36. It's all about expectations here. Bears will quibble about flat revenue but when so little is expected of you simply controlling expenses is more than good enough. For the full year CAT raised guidance to $6 a share in earnings versus $5.75 prior to the call. "Isn't beating by 36-cents in Q3 and raising guidance for the year by a quarter tantamount to an earnings warning?" It's a trick question. The answer is "stop thinking and enjoy the rally.”