Here are five stocks to watch today.
Dole Food (NYSE:DOLE) reported 4Q10 loss of 31 cents per share. missing consensus expectations of 18 cents profit by a good margin. The miss came largely from the fresh fruit business, where poor prices in Asia (due to a temporary closure of Iranian markets) and a challenging crop in Latin America pressured the banana business. The stock is likely to trade down in the near-term, given the positive expectation built in the stock. However, the issues with Iran are already over (the Iranian market is open now) and conditions in Latin America have also improved. Given these improving business conditions, the current decline in stock price provides a good entry point to go long on the company.
Hewlett-Packard (NYSE:HPQ) announced a 50% increase in the company’s regular company dividend to $0.12/share at its HP Summit day yesterday. Management also indicated that HP expects EPS to exceed $7/share in 2014 -- an 11%+ CAGR. HP is trading near trough valuations and this news is an incremental positive. HP stock can outperform in the near- to mid-term and, if broader markets do not take a big step down, a mid-40s price range is possible for the shares.
Texas Instruments (NYSE:TXN) issued a press release and 8-K announcing that two of its fabs (Miho and Aizu-wakamastsu) in Japan have suffered damage as a result of recent earthquakes. Miho fab was the source of wafers for approximately 10% of TI revenue in 2010 and is currently completely offline, and thus may cause meaningful impact on revenues and topline in remaining Q1 and Q2. Although TI has identified alternative sources for 60% of the fab's output, and is evaluating additional transfers of products, it can still see a $200-300 mm topline impact and 10-15 cents EPS impact. The stock is likely to underperform going forward.
Impax Laboratories (NASDAQ:IPXL) released positive topline data from its phase 3 ADVANCE-PD trial of IPX-066 in advanced Parkinson’s patients. The company plans to file the NDA in 4Q11, and expects approval in late 2012. IPXL management has indicated peak sales potential of $250- 400 mm in the U.S. for this drug. IPXL shares may trade around $25-26 on this positive news.
Arch Capital Group (NASDAQ:ACGL) announced that it expects $35-$70 mm in pre-tax losses from the 1Q11 New Zealand earthquake, higher than most of the sell-side estimates. ACGL also noted that it cannot yet estimate potential losses from the Japanese earthquake. However, it mentioned that its models indicate maximum pre-tax losses of (a) approximately $60 mm for a one-in-100-year return period and (b) approximately $100 mm for a one-in-250-year return period. The stock is likely to trade down today and underperform in the near term. Given the uncertainties on Japanese losses, it is best to avoid the stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.