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Ticker Shock: Five Reasons Darden Is Well Done


Wednesday's top stories and stocks with potential to move.


My youngest had a softball game last night that ended a bit early thanks to a downpour. But let me let me tell you, one time she got up to bat, she hit the ball out of the infield on a fly. For 6-year-olds, that's like a 500-foot shot over the center-field fence at Yankee Stadium. Daddy is once again thinking scholarship.

Asian stocks rose overnight. The Hang Seng was up 2.02% and the Nikkei was up 0.43%. Meanwhile, European stocks were showing me some green earlier this morning. And here in the US, we're currently trading higher.

Here's what I'm focused on this fine Wednesday morning:

Darden (DRI):
The company's fourth-quarter release was not too well done, but good nonetheless.

Excluding items, it put up $0.90 in the period, which was actually $0.04 better than what the Street had been looking for. The flip side is that for fiscal 2010, it offered up the following estimate for EPS from continuing ops: $2.59 to $2.85. The Street estimate I'm seeing is for $2.91.

My thoughts:

1. The bottom-line number in the fourth quarter was decent, all things considered.

2. I'm becoming more and more "constructive" on non-fast-food chains, and Darden is at the top of my list in terms of favorites.

3. The fiscal 2010 comment isn't anything to get in too much of a twist about.

4. It trades at about 12.7 times the lower end of the company's 2010 estimate (meaning $2.59) -- not too bad.

5. I'd view any sell off as an opportunity at this point.

Monsanto (MON):
The company put up $1.25 in its third quarter. That's good news because the estimate I'm seeing was for $1.17.

The bad news was the following comment in the release: "Monsanto continues to expect that its full-year 2009 ongoing EPS will be at the low end of its previously-announced range of $4.40 to $4.50."

My take:

1. I'm a bull, and I think the stock has upside potential in both the near and longer term.

2. I don't see why some have been giving these guys such a hard time. The company's got a huge name and is expected to kick out a respectable bottom line. Give my article, Ticker Shock: Four Reasons Monsanto May Mean Green Shoots, a look. I still feel the same way.

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No positions in stocks mentioned.

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