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World Markets Rise on Alcoa; Kroger Acquisition; Barnes and Noble’s New Chapter

Dan Berman
Hot Stock Minute
World Markets Rise on Alcoa; Kroger Acquisition; Barnes and Noble’s New Chapter

Markets worldwide appear to be climbing on a metal winner. We're talking Alcoa (AA) which beat the street when it kicked-off earnings season after yesterday's closing bell. The company posted earnings of 7-cents a share when estimates were for 6-cents, and also squeaked past consensus on revenue making $5.85 billion when estimates were for $5.83 billion. But are investors or the media paying too much attention to this company? Yahoo! Finance Senior Columnist Mike Santoli gives his take in the video above.

Supermarket giant Kroger (KR) is buying smaller competitor Harris Teeter (HTSI). In case you haven't heard of Harris Teeter, the company has 212 stores in the southeast and mid-Atlantic regions. Kroger is paying $2.5 billion dollars or $49.38 a share.That's less than a dollar more than Harris Teeter's closing price yesterday. Right now the stock is up about 2.5%, adding to gains of 25% so far this year. Kroger stock is already up 37% this year.

Barnes & Noble (BKS) will try to begin a new chapter today, or at least turn a page. Effective immediately, Michael Huseby will serve as CEO of the Nook Division and president of the company. He replaces William Lynch who resigned yesterday, just two weeks after revealing the company was ceding defeat in the tablet market. Barnes & Noble has in fact been considering a separation of its Nook business from its retail shops. So it should be noted, Huseby has a history of spinning off companies. Barnes & Noble is down 4% this morning, adding to previous monthly losses of 22%. However, the stock is still up 22% so far this year.

It looks like four companies are jumping through hoops for Hulu. The Wall Street Journal reports that Hulu's suitors are Direct TV (DTV), also AT&T (T) along with the Chernin Group, and Guggenheim Digital Media which has paired with private-equity firm KKR. Meanwhile, Bloomberg is reporting that Time Warner Cable (TWC) has offered to acquire a stake in the company. Hulu has different appeal to the different players. Pay TV operators could use it as a platform to deliver programming. It could also remain a stand-alone Internet service to compete with the likes of Netflix (NFLX).


Intuitive Surgical (ISRG) needs some help, stat. Its shares have been down 15% in early trading. Intuitive makes the Da Vinci surgical robot. It now expects quarterly revenue of $575 million, when expectations had been for $630 million, so we're talking nearly a 10% shortfall. The drop is due in part to negligence lawsuits stemming from use of Da Vinci. Prior to the losses we're seeing this morning, Intuitive's shares were right about where they started the year, up just half a percent.

Next is another medical company in crisis: Natus (BABY). It dropped more than 13% yesterday after the company lowered its preliminary revenue outlook for the quarter. Shares had been up prior to the fall so they're down about 8.5% over the last week. Investors in Natus could have just put their money in something like a CD, with the shares up about 1% over the last year.

Now we look at WD-40 (WDFC), which we mentioned yesterday as a stock to watch because it was reporting earnings after the closing bell. Sure enough that report sent shares skyrocketing 14% in extended trading. The company easily beat estimates making 66-cents a share, a dime more than expectations. Revenue was also above consensus at $93 million. WD-40's namesake brand was the star for the quarter. It helped drive a 12% rise in profits despite disappointing sales for homecare and cleaning products. By the way, the company is also raising its outlook. Prior to the jump we're seeing this morning, shares of WD-40 have been up 19% year-to-date.

Finally there's Priceline (PCLN). It was up almost 4% yesterday hitting its highest price in more than a decade. Morgan Stanley has changed its rating of Priceline to overweight from equal weight, and it's upping the stock's price target to more than $1,000, about 11% higher than the stock is right now. Shares of Priceline are already up more than 725% over the past five years.