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Dell Climbs on Endorsement; Alcoa and WD-40 to Report; Berkshire’s Latest Buy

Dan Berman
Hot Stock Minute
Dell Climbs on Endorsement; Alcoa and WD-40 to Report; Berkshire’s Latest Buy

We kick off the week with Dell (DELL) up almost 3% in early trading. The rise comes on good news for company founder Michael Dell. The group Institutional Shareholder Services, also known as ISS, says it's backing his buyout plan for $13.65 a share. It was just last Friday that word leaked out, Dell didn't want to sweeten his original offer, even though a Dell special committee was recommending it. At that point, the stock dropped more than 2% on concerns the proposal could fall apart-- something which is less likely now.

Next up is the subject of debate on bellwethers, Dow component Alcoa (AA), which kicks-off earnings season after the closing bell. The company is expected to post earnings of 6-cents a share, the same as a year ago, though on revenue that's slipping further away from the $6 billion mark. By the way, the outlook overall for the quarter is quite gloomy, with companies in the S&P expected to report a rise of just .7% over last year. Compare that to last quarter when the figure was 3.5%. In fact, if the forecast is right, it would be the smallest growth since the third quarter of last year, when profits actually fell.

Now we look at WD-40 (WDFC), which will also grease up the apparatus as we kick-off earnings season. It also reports after the closing bell. WD-40 is expected to post earnings of 56-cents a share, down a penny from a year ago, but on higher revenues. WD-40 is about more than those cans of its namesake brand. It sells a variety of household products in 187-countries and recorded sales of $343 million last year. The stock climbed 1.6% percent on Friday, bringing its total rise in 2013 to nearly 20%.

Finally, there's DaVita HealthCare (DVA). Bloomberg is reporting that Berkshire Hathaway has upped its stake in the company by 4.3%. Berkshire took advantage of a 6% drop in the stock price last Tuesday and grabbed-up almost 640,000 shares in two days. Now if you're wondering what caused the DaVita drop, it was a proposal to cut Medicare payments for dialysis by more than 9%. But Buffett may be betting there will still be plenty of profits as the number of people with diabetes climbs. DaVita hit an all-time high of more than $131 back in May. It's currently trading about 10% below that.