MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Wednesday, June 19, 2013
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3:08 PM Urban Outfitters (URBN -1.6%) continues to impress retail watchers with the steady growth of its direct-to-consumer channels (24% of total sales). Management's acumen at expanding online and catalog sales is one of the reasons the company's revenue and growth rates has beat peers Aeropostale, American Eagle Outfitters, Buckle, and Abercrombie & Fitch. Comment!
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2:46 PM Orchard Supply (OSH -59%) says the U.S. Bankruptcy Court has approved all of the First Day Motions related to its voluntary Chapter 11. The motions collectively will enable the company to continue operating its business as usual as it completes its Chapter 11 case. Comment!
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2:26 PM WatchESPN (DIS) and HBO Go (TWX) have been added to the Apple TV for paying subscribers in a move that will significantly increase the reach of the streaming services. The development also represents another small leak for the cable/satellite industry (CHTR, TWC, CMCSA, DTV, DISH) as it tries to keep its content dike in place. Comment!
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2:19 PM Shares of Sonic (SONC +1.8%) skate higher on the back of a Morgan Stanley upgrade to Equalweight from Underweight. Comment!
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2:03 PM Analysts weren't surprised by the when-issued trading in Australia of the new companies emerging from the split of News Corp. (NWS, NWSA). In their debut in Sydney, 21st Century Fox (Fox movie, pay TV and free TV busines, Sky Deutschland, Sky Italia, part of BskyB ) rose over 5% while the new News Corp. (Wall Street Journal, The Sun, Barron's, Australian media assets) dropped 3%. Comment!
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1:33 PM Procter & Gamble (PG +0.2%) announces a new licensing agreement with Alexander McQueen. Under the terms of the deal, P&G will be able to immediately market fragrances under the Alexander McQueen brand name. What to watch: During last week's presentation (slides) at the Deutsche Bank Global Consumer Conference, execs said the company will increase its focus on making "value and performance" claims on its large stable of brands. On that note, a fragrance fit for a future queen could be an upcoming tag line. Comment!
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1:06 PM The mystery behind the ouster of Men's Wearhouse (MW -1.9%) founder George Zimmer lies behind the doors at the company where the exec had significant difficulty giving up control, according to Stifel Nicolaus. The investment firm backs its Buy rating on the retailer, noting current management including creator director Joseph Abboud are on the right track. Comment!
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12:59 PM The AMA officially endorses a policy to limit how caffeinated beverages are marketed to consumers under the age of 18 and calls for a temporary ban on youth marketing until more studies are completed. Shares of Monster Beverage (MNST -0.4%) are only off moderately with the risks of legislation on energy drink marketing already baked in. 1 Comment
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12:58 PM Lunch service is a good thing if you're a restaurant, something BofA analyst Joseph Buckley reinforces Wednesday, upping his price target on Bloomin' Brands (BLMN +1.9%) to $29 from $25, citing a positive outlook for the introduction of lunch service at Outback locations. "Weekday lunch … is expected to be in 34% of Outback restaurants by YE 2013 and eventually in 50%-60% of the chain," Buckley notes. Comment!
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12:45 PM Shares of Buffalo Wild Wings (BWLD +0.4%) cross into triple digits for the first time ever as investors continue to buy into the restaurant operator's growth potential. What to watch: The company's Q2 comparable-store sales and margins will be in focus to see the impact on results from an against-the-grain menu strategy to move to selling a quantity (small, medium, or large) of wings instead of letting consumers choose a specific number of wings. Comment!
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11:36 AM Smithfield Foods (SFD +0.3%) made an interesting disclosure yesterday in a SEC filing. The company was considering a "potentially significant acquisition" of a large business in the packaged meats sector. The speculation from dealReporter is that it was Hillshire Brands (HSH +1.5%) in the crossfires, an acquisition which makes sense and could be on the table again if regulators stop the Shuanghui International purchase of Smithfield. 1 Comment
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11:27 AM BTIG downgrades News Corp. (NWS, NWSA) to Neutral from Buy after doing a fresh sum-of-the-parts analysis on the company. The math on the new News Corp. suggests a when-issued trading price of around $15 per share ($3.72 per current NWS/NWSA share) which could drift to $20 if the newspaper business performs better than expected. (full research report) Comment!
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10:44 AM Winners and losers from Chrysler's (FIATY.PK) fight with the NTHSA: Though it capitulated and agreed to a recall, Chrysler scored a cheap fix (adding trailer hitches) to what could have been a more expensive issue and protected its brand in front of the planned buyout by Fiat and eventual IPO. The NHTSA saves itself what may have been a painful process of going through discovery - while General Motors (GM) and Ford (F) got a free look at how a battle with the agency goes down. Consumers with 1993-2004 Grand Cherokees and 2002-07 Libertys walk away with a little extra value due to the new trailer hitch, but might still be wondering about those rear-end collisions. 2 Comments
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10:31 AM Sony (SNE -2.9%) will not directly address Third Point's call for the company to spin off its entertainment business during its annual meeting tomorrow, according to sources. Loeb won't be in attendance, but the wide-open nature of annual meetings in Japan will give other shareholders plenty of chances to try to force Sony executives to make a statement on the proposal. Comment!
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10:03 AM Shares of Goodyear Tire (GT +2.9%) trade higher as industry factors such as the price of rubber and overall automobile demand stay in the company's favor. Goodyear is also in the midst of some labor negotiations with a steel workers union which could impact future costs. Comment!
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9:54 AM Men's Wearhouse (MW -0.7%) narrows its premarket loss quite a bit as the news of the firing of its founder is digested. Though a termination - instead of a resignation - signals there's more to the story, some forward-looking investors are jumping in on the prospect that a change of direction will benefit the retailer. 1 Comment
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9:36 AM American Eagle Outfitters (AEO -0.9%) looks out of style to Citigroup which takes the company down to a Neutral rating from its previous perch of Buy. The retailer has trailed peers for the year with its comparable-store sales growth and its share price has trudged along accordingly. Comment!
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9:19 AM Shares of Jos. A Bank Clothiers (JOSB) could see some action with rival Men's Wearhouse (MW) taking the dramatic step of firing its founder. SA contributor Money Investor already made the case that Jos. A Bank looks undervalued compared to Men's Wearhouse and could attract a buyer due to its strong fundamentals. Premarket: MW -7.1% premarket, JOSB inactive. Comment!
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