In a Drift

Indie Research

After a difficult shortened week, stocks started this week mixed, battling back from earlier losses. Nonetheless, the overall tone of the market remains negative, with Europe seemingly continuing to slowly deteriorate, China slowing down, and mixed U.S. economic data. Overall, we continue to expect the market to keep drifting lower in the near term.

Note as of today's close the Recommended List was up 1.7% year to date versus 1.6% for the S&P 500. Since the start of 2008, it has delivered a 32.3% return, compared with a -13.0% return for the S&P 500, a 45.3% outperformance. Since 2009, the Recommended List is up 77.9% versus 41.5% for the S&P 500, a 36.4% outperformance.

The Medical Labs and Diagnostic Services Stocks Index was the top performing tickerspy Index on the day, led by Medtox Scientific (MTOX - News) with a 35% gain. The Homebuilder Stocks Index was the day's worst performing tickerspy Index, with Hovnanian Enterprises (HOV - News) down -7%.

Stocks traded mixed, with the Dow down -17 points to 12,101. The S&P edged up fractionally to 1,278, while the Nasdaq climbed 13 points to 2,760. Oil rose 75 cents to $83.98 a barrel, while gold fell -$8.20 to $1,613.90 an ounce.

In economic news, the Commerce Department said factory orders fell -0.6% in April. Economists had expected an April increase of 0.2%. Excluding transportation, new orders fell -1.1%.

In earnings news, shares of retailer Conn's (CONN - News) slid -5.6% despite the Texas-based company reporting a fiscal first-quarter profit of $11.6 million, or 35 cents per share, up from $4.4 million, or 14 cents per share, a year earlier. Revenue rose to $200.9 million from $192.0 million as same-store sales rose almost 18%. Analysts had expected a profit of 33 cents on revenue of $195.5 million.The company forecast a full-year profit of $1.30-$1.40 a share compared with previous guidance of $1.20-$1.30. Analysts were expecting $1.32 a share. One pro counted Conn's among his top holdings at the end of Q1 and more than 60 tickerspy members own the stock in their portfolios.

Shares of Nathan's Famous (NATH - News) surged 6.0% after the company said its fiscal fourth-quarter profit climbed to $1.1 million, or 23 cents per share, from $550,000, or 11 cents per share, a year earlier. Revenue increased to $14.4 million from $12.3 million. On an adjusted basis, Nathan's Famous earned 24 cents a share.

Shares of forensic and clinical laboratory services firm Medtox Scientific soared 35.4% after the company received a $241 million offer from rival LabCorp (LH - News). The deal values Medtox at $27 per share.

Cloud-computing giant Salesforce.com (CRM - News) announced it will acquire privately held Buddy Media for $689 million. Buddy Media specializes in helping companies maintain and improve their social media footprints on sites such as Facebook (FB - News) and Twitter. Speculation that Salesforce would acquire Buddy Media started several weeks ago. Shares of Salesforce inched up 0.1%. Nearly 40 pros held Salesforce in their portfolios at the end of Q1 and nearly 620 tickerspy members own the stock in their portfolios.

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