Blockbuster's Stock Is a Flop
The video-rental chain has been having a rough go of it.
Asian stocks sank overnight. The Hang Seng and the Nikkei were off 0.65% and 2.56%, respectively. Meanwhile, European stocks were a smidge lower early this morning. And here in the US, we're currently trading lower.
Here's what I'm seeing this fine Friday morning:
Not anymore it's not.
The video-rental chain has been having a pretty rough go. It offered up a less than stellar EBITDA outlook. Janney downgraded it to Neutral, cut its outlook, and its stock sank like a stone.
I'm certainly not going to be fishing for Blockbuster shares at this point because I still see too much risk.
As for Netflix (NFLX), it certainly scratches an itch. But at the same time, despite the pullback, it's still not a bargain at more than 20 times the 2010 estimate.
Advanced Micro Devices (AMD):
The chip company was out with its fourth-quarter numbers, but there wasn't much to get excited about. Intel (INTC) remains the clear choice in this space.
I realize that AMD beat on the revenue line, but how about showing me some annual profits?
It's hard to fault Schmidt and crew because its stock has had such an incredible run and the company has such a stellar name -- it's taking on China, for Pete's sake!
But the biggest problem it has is that expectations are always so high. That can be a problem, as I think we're going to find out today. It turned in some terrific fourth-quarter results last night after the closing bell, yet some have their underpants in a twist, believing its top line wasn't strong enough.
This is one of the reasons why I'm still so gung-ho on Yahoo (YHOO). The bar there seems to be set so much lower in terms of Street expectations, and there's so much upside potential with Bartz at the wheel.
Be sure to check out Justin Sharon's article this morning, Upgrades & Downgrades: Google Still Searching for Answers. He points out the Collins Stewart downgrade.
Justin Sharon points out this morning that Deutsche took the Mac maker off its Buy list.
I learned to not bet against this company a long time ago. And it's a good thing I did, as the stock has risen like an plane out of the airport.
But I think the stock could be a bit vulnerable here, particularly if the markets continue to get battered. And my caution flag remains raised because sooner or later, I think the company is going to disappoint on some level and the shares could be the recipient of a hefty beating. It's unlikely that it will keep blowing estimates forever.
Have a great day and an even better weekend!
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