Three Members of the S&P SmallCap 600: HSNI, ROCK and ZUMZ Reap Q2 Rewards.
With a flat market today that has traders and investors puzzled whether to buy, sell or just sit, three Members of the S&P SmallCap 600: HSNI, ROCK and ZUMZ post big gains based on their latest Q2 numbers.
Gaining 21.24% ($2.10) in early trading, HSN Inc., (HSNI) http://www.hsn.com/ set a new market cap of $658 million as shares traded as high as $11.75 by 11 a.m. EST. HSNI has a 3-Month average daily trading volume of 431,838 shares and it had surpassed 595,830 shares by mid-session.
HSNI (the parent company of the Home Shopping Network) earned $13.6 million, or 24 cents a share, compared with a loss of $249.8 million, or $4.44 a share, a year earlier. That's a strong turnaround. The year-over-year comparison is significant because in August 2008, HSNI broke free from InterActiveCorp (IACI) owned by Barry Diller. HSNI has managed to not only make it on its own, but flip-flop its earnings from red ink to black ink. Well Done.
HSNI Q2 net sales were down 8%, but considering the retailing recession, that's not bad. HSNI had some segment weaknesses, like its Cornerstone home brand, which dropped 21% to 185 million, but overall segment net sales only amounted to a 1% loss. HSNI has already set a tighter cost control into place to absorb the segment losses in Q3.
HSNI markets and sells a range of third party and private label merchandise in the U.S. HSNI offers electronics and housewares, jewelry, beauty, apparel, health, home fashions, accessories, vitamins, and other products directly to consumers through its television network and its Web site.
At $11.75, HSNI is off its 52-week high of $16.54 set on 08-26-08 (when it separated from IACI) and is far above its 52-week low of $1.40 set on 12-08-08 (a good buy signal). At $11.75, HSNI is above both its 50-day and 200-day moving averages. HSNI has trailing twelve month revenues of $2.78 billion. Its shares out versus float ratio is close enough to parity to dismiss any stability questions.
Gaining 29.02% ($2.58), Gibraltar Industries (ROCK) http://www.gibraltar1.com/ posted Q2 results late yesterday that beat analyst estimates and that sent the stock soaring this morning. ROCK is currently trading in the $10.98 range on the Nasdaq and has a new market cap of $345 million. ROCK has a 3-Month average daily trading volume of 234,728 shares and topped 424,061 by 11 a.m. EST.
ROCK broke even on its EPS for the quarter. Analysts were looking for a loss of 9 cents a share. Revenue for Q2 beat Q1 by 6%; coming out at $217.1 million, but that was down 37% from $347.2 million in the 2008 period. Now that's not healthy, but an analyst from R.W. Baird came along this morning and upgraded ROCK from 'Neutral' to 'Outperform' and that bolstered the confidence of buyers.
ROCK management noted yesterday the 'business conditions' stabilized or improved in the second quarter in many building-product markets, though the auto market remains weak. ROCK manufactures, processes, and distributes residential and commercial building products and processed metal products.
At $10.98, ROCK is less than half its 52-week high of $24.63 set on 09-18-08 and far above its 52-week low of $3.41 set on 03-17-09. At $10.98, ROCK is above its 50-day and 200-day moving averages. ROCK has trailing twelve month revenues of $1.14 billion. Its shares out versus float is close enough to parity to cause little concern.
Gaining as much as 19.84% ($2.01) in early trading, our third S&P SmallCap 600 company, Zumiez, Inc., (ZUMZ) http://www.zumiez.com/ set a new market cap of $365 million with its shares currently trading in $12 range on the Nasdaq. ZUMZ easily passed its 3-Month average daily trading volume of 291,406 shares by 11 a.m. EST topping 390,577 shares traded today.
ZUMZ management said late yesterday, its July same-store sales results fell 16.8%. While that's not good, analysts were expecting a fall of 20.8%. Total sales for the four weeks ended Aug. 1 fell 6% to $29.9 million. But just like ROCK, an analyst came to the rescue early this morning. Caris & Company issued an upgrade on ZUMZ in early trading this morning from 'below average' to 'average' and that brought the buyers in.
ZUMZ has 343 sporting goods stores it operates in shopping malls in 31 states.
At $12, ZUMZ is less than half its 52-week high of $28.84 set on 10-10-08 and is more than double its 52-week low of $4.80 set on 11-21-08 (buying in between the spread is a key signal to investors that all the money hasn't already been made on a stock). At $12, ZUMZ is ahead of both its 50-day and 200-day moving averages (trending up). ZUMZ has trailing twelve month revenues of $406 million and a trailing twelve month diluted EPS of $0.48. Although I would like to see more shares in the float, it isn't a concern.