Here are your trending tickers for Friday, May 16th:
It's an all you can eat shrimp-fest over at Darden (DRI)-- they've just unloaded the struggling Red Lobster for a reported $2.1 billion to private equity firm Golden Gate Capital. Investment activist group Starboard Value is crabby about the deal and had warned Darden against spinning off Red Lobster without first holding a shareholder vote. Darden plans to use part of the money to pay back some of its debt and to fund a new share buyback program. If Darden was hoping to get a better price for repurchased shares the plan is working, DRI's stock is as much as 4% lower.
In a triumph of grim reality over low expectations, shares of JC Penney (JCP) have been up as much as 20% after the company managed to lose less than expected in the first quarter. Penney reported that sales grew not just overall but on a comp store basis for the first time in recent memory. Penney lost $1.15 per share versus expectations of $1.26. JC Penney CEO Mike Ullman deserves a massive amount of credit, not just for low-balling estimates but also for pulling the chain out of what looked to be a death spiral last year. JC Penney may not be taking over the world but they aren't going to be dying any time soon. That's coming as a hard surprise to the massive group of diehard shorts getting squeezed today.
Shares of Verizon (VZ) were up nearly 3% this morning thanks to the Buffett-effect. Warren Buffet's Berkshire Hathaway revealed that they now own 11 million shares of the telecom company for a total stake of about $530 million. That might be small potatoes for the Omaha oracle but it means big things for value investors who can definitely hear him now. It seems like Buffett must approve of Verizon's recent Vodaphone buyout and sees big things headed their way. Buffett is America's spiritual Godfather when it comes to investing and he's earned the position. That said it's worth noting that one thing he's never recommended is buying a stock 3% higher based on information that's 45 days old.
Have a great weekend!