We are seeing red across the board from Asia and Europe and we might have red here in the United States this week, especially if the Presidential election is as close as the experts and latest polls indicate. It would not be a good thing to have the election drag out past a day or two as everyone tries to figure out who won and lost. We have been down that road before and with the market and economy as fragile as it is currently, adding unnecessary stress to the system could be the straw that breaks the camel's back. We are of the opinion that this pullback is just that, a pullback and that weakness should be bought.
We have economic news due out today, and it is as follows:
- ISM Services - 55.0
Asian markets finished lower:
- All Ordinaries - up 0.23%
- Shanghai Composite - down 0.14%
- Nikkei 225 - down 0.48%
- NZSE 50 - down 0.15%
- Seoul Composite - down 0.55%
In Europe markets are trading slightly lower this morning:
- CAC 40 - down 1.02%
- DAX - down 0.71%
- FTSE 100 - down 0.68%
- OSE - down 0.70%
Skyworks Solutions (SWKS) saw shares get pummeled on Friday as they fell $4.13 (17.15%) to close at $19.95/share. Volume was high, coming in at 17 million shares or over three times the daily average over the past three months. Investors probably saw a buy on the rumor and sell on the news type of trade here as the company beat this quarter's analyst estimates and announced guidance that is essentially in line with that of the analysts as well. The lower guidance we are seeing discussed is more like a rounding error when you are discussing numbers of that size, so we are not too concerned with the company not being able to at least meet analysts' targets for next quarter. If shares pull back further there might very well be a trade here, it is something we are watching.
We highlighted Starbucks (SBUX) in Friday's article and after looking over the situation this weekend we have to say we are quite impressed with the company. This name remains one of the retail names we want investors to have exposure to at this time as the company appears to be operating like the Starbucks of old. Shares shot up $4.22 (9.05%) to close at $50.84/share on Friday and we think that this momentum will carry forward. We have been a Starbucks bull for some time, and this looks like it has all the makings of one of the bull runs which the company's stock goes on from time to time.
Dendreon (DNDN) has seen its shares killed this year, however there may be hope for investors yet, at least that was the thinking after the most recent earnings report. Sure the company lost more than was anticipated, but the good news is that sales of Provenge rose solidly and we may see the new management team deliver the results which investors expected from this drug. We are not saying that they are going to get it up to the blockbuster status some believed possible, but doubling sales from here is a real possibility - and that growth profile would really light a fire under the share price. Investors cheered the news of the sales increase and shares finished Friday up $0.62 (16.10%) to close at $4.47/share on volume of 30 million shares. We are adding this one back onto our watch lists now.
Investors pushed shares in TripAdvisor (TRIP) higher after the company reported that traffic to their website rise by about a third and the company beat the analysts' estimates on both the top and bottom lines. The spin-off from Expedia rose $5.71 (19.42%) to close at $35.12/share on volume of 12.2 million shares after the great quarterly results were announced. The company stated that they would meet their 2012 numbers, which we believe is the minimum. The strong third quarter will probably lead the company to handily beat for the year and if they continue to build momentum with their traffic numbers, increased content offerings and see their click through rates hold steady at a minimum then the fourth quarter shall be strong as well.
Make it two quarters in a row for Pitney Bowes (PBI) delivering to investors quarterly disappointments. That is a major reason that the shares hit a new 52-week low on Friday as shares closed at $12.73/share after falling by $1.91 (13.05%) on volume of 17 million shares. Looking to the quarters ahead, the company stated that they will have restructuring charges and will be reorganizing by cutting unprofitable product lines. The company is experiencing tougher competition and a declining overall market for their business, but at this time does provide an extremely attractive yield.