Ticker Shock: Fun and Games for Activision; No Joy for Cisco, THQ, Whole Foods
Thursday's top stories and stocks with potential to move.
Yesterday wasn't exactly what I'd call an election rally. Let's see if we can get it right today, people!
Anyway, Asia got killed as we slumbered. The Hang Sang slipped more than 7%; the Nikkei was off more than 6%. Europe is lower as well. And so far, at least, the Dow is in negative territory as well.
After the bell, the California-based company and one-time high-flyer released its first-quarter numbers.
Excluding items, it put up $0.42 per share, which was a sweet $0.03 north of expectations. Its sales number was in line as well.
But CEO John Chambers said the company expects revenue to fall 5% to 10% in the current quarter - which would put revenue between $8.85 billion and $9.34 billion. Analysts were expecting $10.4 billion.
I think this news could shake out some anxious shareholders. If the stock were to get really hammered in the days ahead and trade down to the lower double digits, I think it'd be a terrific longer-term buy. My opinion is that investors are starting to treat this company like it's some sort of fly-by-night - and that, to my mind, could work to the advantage of a savvy buy-and-hold investor.
Whole Foods (WFMI)
After the close, Whole Foods disseminated its fourth-quarter numbers.
The company put up a penny a share, although its earnings were apparently weighed down by $0.12 in charges. But I think the real story revolves around the announcement of a pending preferred stock deal: "Private equity firm Green Equity Investors V LP has bought preferred shares in Whole Foods for $425 million, which can give them a stake in the company of about 17%, if converted into common."
This is big news, because it gives the company what I would call a little more breathing room during these tough times.
But would I buy the stock on this news? In a word, no. First off, folks aren't spending lots of money - not good for a company whose prices have led some to call it Whole Paycheck.
I also think it's important to note that Whole Foods isn't exactly the only store offering up healthy fare. Even your local grocery store has all kinds of stuff labeled organic.
By the way, can you believe this was a $50 stock not 2 years ago?
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