There are some picks in this sector that have excellent valuations and strong earnings growth.
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Refinery problems and speculative bets keep pressure on pumps nationwide.
Gas prices in California rose as much as 20 cents per gallon between Thursday night and Friday morning, and the state's fuel shortage is just one reason U.S. gas prices will flirt with $4 for a while.
The average price of a gallon of regular gasoline in California is nearly $4.49, according to the AAA Daily Fuel Gauge Report. That's the highest in the country and far exceeds the roughly $3.89-a-gallon national average reported by the Energy Information Administration -- still a record for this time of year.
The fallout from trimmed earnings and revenue forecasts spreads, and an analyst cuts his FB price target.
Zynga (ZNGA) shares fell roughly 20% to a new low Friday after the company offered bleak news about its third quarter and lowered its full-year forecast.
Facebook (FB) shares dropped as well after Forbes reported J.P. Morgan analyst Doug Anmuth trimmed his target price on Facebook shares to $28 from $30 because of Zynga's troubles. Anmuth notes that Zynga accounted for 54% of Facebook’s payments revenue in Q2. He now projects 2013 Facebook payments revenue of $582 million, down from a previous forecast of $797 million. That would be a 28% year-over-year drop.
Stocks are poised to finish the week higher as the unemployment rate dropped to 7.8% for September.
How much would the investment guru pay for the tech giant?
Legendary mutual fund manager Peter Lynch made his fame by generating outsized returns investing in growth companies. He is willing to pay up for faster-growing companies. He famously said that he would rather pay a price-to-earnings ratio (P/E) of 20 for companies that grow 20% than a P/E of 10 for companies that grow at 10% a year.
This brings us to the concept that we call "Peter Lynch Fair Value" in our valuation box.
In determining the fair value of companies, Lynch uses a rule of thumb which says that the fair P/E of growth companies is equal to its earnings growth rate. Lynch is willing to buy a growth company at a P/E multiple that is equal to its growth rate (G). Therefore, to Lynch, at fair value, the PEG ratio of a growth company should be 1.
Companies are trying to use America's weight to their advantage.
We hear it from all around: America is getting fatter.
Now, though, we're starting to see it all around as well. More and more companies are featuring obese people in their ads -- and not as the butt of jokes, USA Today reports.
Instead, considering the fact that almost two in three adults are overweight or obese and that nearly half of the population will be obese in the next 20 years, it's clear that companies need to appeal to this growing pool of America.
Athletic apparel maker Nike (NKE), for example, which has seen its share of struggles this year, recently debuted a commercial of an obese man jogging. As a spokesperson for the company explained, "It's not just championship athletes that aspire to push their limits."
Considering all the positive indicators, the conditions for US business success are remarkable.
By Sheldon Liber
Yes, you read that right! The United States is in the best position to be the catalyst for a global economic recovery. While our nation is slowly lifting its head from a drunken stupor the rest of the world still has its head spinning.
And as U.S. markets are rallying on the unexpected drop in the unemployment rate, the case for U.S. leadership is even stronger than before.
Mosaic's earnings miss shouldn't deter sector bulls.
By Jim Woods
The sweet smell of success is somewhat of a paradox in the fertilizer business. In fact, the more olfactory offense wafting through the air, the greater the sales of fertilizer and potash by leading companies in the industry.
This week, we received third-quarter earnings from industry behemoth Mosaic (MOS) that stunk -- but not in a good way.
The agriculture giant said it saw a loss of $229 million, or 42 cents a share, during the quarter ended Aug. 31. That's more than double the loss it had in the same quarter a year ago.
Now that the K-Cup patent has expired, the Seattle coffee giant may be looking to acquire its Vermont rival.
Shares of Green Mountain Coffee Roasters (GMCR) rallied on Thursday, moving back into positive territory late in the afternoon session.
Starbucks (SBUX) CEO Howard Schultz made comments that might have generated some bullish momentum. He stated that his company was interested in making acquisitions in the food and beverage sector -- some traders may have seen these comments as evidence that Starbucks could purchase the Keurig-maker.
Starbucks is no stranger to acquisitions. Over the years, the company has made several. The coffee giant purchased Tazo Tea in 1999, Evolution Fresh last year, and La Boulange Bakery earlier this year.
Forget the conspiracy theories about rigged data. The latest jobs numbers are bullish for retailers and consumer products companies.
Zynga downgraded to 'neutral,' and First Solar is downgraded to 'negative.'
Friday's noteworthy upgrades include:
- Automatic Data Processing (ADP) upgraded to Buy from Neutral at Goldman
- Dollar Tree (DLTR) upgraded to Outperform from Neutral at Credit Suisse
- Family Dollar (FDO) upgraded to Outperform from Neutral at Credit Suisse
- Informatica (INFA) upgraded to Buy from Neutral at Nomura
- Gap (GPS) upgraded to Buy from Above Average at Caris
This leading maker of product packaging and recycling solutions has witnessed growth across the board. Its Smurfit-Stone acquisition will also help.
By Zacks Equity Research
RockTenn (RKT) reported revenue growth of 67% in its fiscal third quarter, thanks in part to last year's acquisition of Smurfit-Stone, which should keep it poised for even more growth. With low valuation metrics, including a low price-to-sales ratio of 0.6, this Zacks No. 1 Rank ("strong buy") paper and packaging company is a compelling value pick.
On July 24, RockTenn posted a third-quarter fiscal 2012 profit of $58.2 million or 81 cents per share, compared with a loss of $30.1 million or 60 cents per share a year-ago. The results were boosted by a solid double-digit growth in sales.
Cloud computing and increased social networking boost demand for this data-storage leader.
By Jim Yin, S&P Capital IQ, The Outlook
Our latest Focus Stock is EMC (EMC), which carries S&P Capital IQ's highest investment recommendation of 5 stars, or "strong buy."
The company is a leading provider of data-storage solutions that support transaction processing, data warehousing, electronic commerce and content management. It helps customers manage and secure their vast and ever-increasing quantities of information, and it helps automate their data centers and reduce their operational costs.
With each passing quarter, HP's promise looks less and less likely to be fulfilled.
I'm starting to wonder whether the faith that some investors have placed in beleaguered tech giant Hewlett-Packard (HPQ) will ever prove to be anything other than misguided optimism. As harsh as that may sound, it's looking less and less likely with each passing quarter that the promises of tomorrow will ever come.
HP's stock, which has been on a steady decline, losing more than 30% of its value since starting the year at $25, is now under further attack. On Wednesday, the company confirmed what investors have feared for quite some time: that things are going to get worse before they get better.
September unemployment declined to nearly a 4-year low as employers added 114,000 jobs. Zynga shares continue to tumble. Facebook shares fall on Zynga concerns. Avon's former CEO steps down as executive chairman.
U.S. stocks eased off earlier highs that sent the Dow industrials to a five-year high. Markets rallied Friday as the government's nonfarm payrolls report showed the unemployment rate unexpectedly fell from 8.1% in August to 7.8% in September, the lowest level since January 2009 -- when President Barack Obama took office.
The Dow Jones Industrial Average ($INDU) was up 59 points at 13,635. The S&P 500 ($INX) was up 5 points at 1,466. The Nasdaq Composite ($COMPX) was up 2 points at 3,152.
Economists had predicted the jobless rate to remain at 8.1% or tick up to 8.2%, depending on the survey. The rate declined as many Americans returned to the workforce to look for work.
It's within geological reach, but it isn't within political reach.
Journalists are all about fact checking these debate statements, looking for the hype and the false promise, so I indulged in a similar test last night in speaking with Al Monaco, the new chief executive officer of Enbridge (EEP), which builds and manages the largest pipeline system in North America.
Here's a country within a company, currently slated to build $30 billion worth of pipelines in the next five years, of which $18 billion are funded and the rest are most likely going to have little problem being funded ,given Enbridge's amazing track record.
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[BRIEFING.COM] S&P futures vs fair value: +2.00. Nasdaq futures vs fair value: +7.30. As the opening bell draws closer, the S&P futures market is attempting to cling to a small gain that would keep the cash market on course for a slightly higher open.
There might be some wait-and-see action in the stock market as traders returning from vacation aim to get a feel for things by watching the tape for a bit. That point notwithstanding, there is plenty of activity already ... More
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