Pullback Would Be a Buying Opportunity

Indie Research

Stocks fell on the day, driven lower by weak Chinese manufacturing data, as the purchasing managers' index from HSBC Holdings Plc fell to 48.1, indicating contraction. The economic news at home was better with jobless claims hitting a four year low. The earnings news, meanwhile, was mixed, although generally solid. We're still looking for a spring/summer pullback, but think if one does occur, it will represent a good buying opportunity.

The Recreational Product Stocks Index was the top performing tickerspy Index on the day, led by Sturm Ruger (NYSE: RGR - News) with a 13% gain. The Chinese Agriculture Stocks Index was the day's worst performing tickerspy Index, with Origin Agritech (Nasdaq: SEED - News) down -11%.

Stocks fell on the day, with the Dow off -78 points to 13,046. The S&P fell -10 points to 1,393, while the Nasdaq gave back -12 points to close at 3,063. Oil plunged -$1.92 to $105.35 a barrel, while gold dipped -$7.80 to $1,642.50 an ounce.

In economic news, new claims for jobless benefits fell by -5,000 to a seasonally adjusted 348,000 last week. That beat the reading of 354,000 new claims economists had expected and was good for the lowest reading in over four years. Elsewhere, the Conference Board said its index of leading economic indicators increased 0.7% last month, topping the 0.6% increase economists expected.

In earnings news, shares of discount retailer Dollar General (NYSE: DG - News) jumped 3.1% after the company said its fiscal fourth-quarter profit rose 32% to $292.5 million, or 85 cents per share, from $222.5 million, or 64 cents per share, a year earlier. On an adjusted basis. Dollar General earned 87 cents. Revenue surged 20% to $4.19 billion, while same-store sales increased 6.5%. Analysts had expected EPS of 82 cents on revenue of $4.1 billion. The company forecast an adjusted 2012 profit of $2.65-$2.75 a share on sales of $16.00-$16.15 billion. Same-store sales growth is expected to be between 3%-5%. Analysts were expecting a profit of $2.71 per share on revenue of $15.92 billion.

Shares of athletic apparel maker lululemon athletica (Nasdaq: LULU - News) rose 2.5% despite a disappointing full-year profit forecast. The company expects a full-year profit of $1.50-$1.57 a share on sales of $1.3-$1.325 billion. Analysts were expecting EPS of $1.61 on revenue of $1.308 billion. In its fiscal fourth quarter, lululemon's profit rose to $73.5 million, or 51 cents a share, from $54.8 million, or 38 cents, a year earlier. Revenue climbed 51% to $371.5 million. Analysts had expected a profit of 49 cents.

Shares of GameStop (NYSE: GME - News) plunged -6.1% after the video game retailer said its fiscal fourth-quarter profit fell -27% to $174.7 million, or $1.27 per share, from $237.8 million, or $1.56 per share, a year earlier. On an adjusted basis, Texas-based GameStop earned $1.73 a share. Revenue fell to $3.58 billion from $3.69 billion. Analysts had expected a profit of $1.73 per share on $3.69 billion in revenue. The company expects EPS of 52-55 cents for the current quarter on sales of $2.06-$2.11 billion. Analysts were expecting a profit of 58 cents per share on $2.27 billion in sales. GameStop expects a full-year profit of $3.10-$3.30 a share on sales of $9.65-$10.02 billion. Analysts were expecting a profit of $3.15 per share on $9.88 billion in sales. Fifteen pros held GameStop in their portfolios at the end of Q4 and more than 400 tickerspy members own the stock in their portfolios.

Food maker ConAgra (NYSE: CAG - News) said its fiscal third-quarter profit rose to $271.6 million, or 65 cents per share, from $214.8 million, or 50 cents per share, a year earlier as sales increased 7% to $3.37 billion. On an adjusted basis, ConAgra earned 51 cents. Analysts had expected a profit of 49 cents on revenue of $3.35 billion. The company said its fiscal fourth-quarter earnings would be lower than previously forecast due to higher raw materials costs. Shares of ConAgra fell -0.6%. Eleven pros counted ConAgra among their top holdings at the end of Q4 and nearly 300 tickerspy members own the stock in their portfolios.

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