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Ticker Shock: Hot Topic No Longer On Fire


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

Weird commute home yesterday. The bus -- which holds probably 50 people -- was nearly empty except for me and a few others. It was like I was in a twilight zone or a bad after-school special.

Asian stocks ended the session mixed. The Hang Seng was up 1.23% and the Nikkei was off 0.64%. However, European stocks were in positive territory earlier this morning. And here in the US, we're currently trading higher.

Here's what I'm seeing this morning:

Hot Topic (HOTT):
The retailer's comps for the month of August were down just over 8% -- 8.1% to be exact. That's not the end of the world and certainly not the worst performance I've seen in retail over the last few months.

However, it was steeper than the 6.9% decline the Street had been looking for.

Some thoughts:

1. Hot Topic had been the talk of the town earlier in the year as its stock was rockin', but that's changed. It's going to take a while for it to regain the same kind of investor interest. These comp results don't help.

2. Though my ears perk up a bit with the stock under $7, it's still not enough for me to pull the trigger. The EPS estimates for this year and next have been on the way down over the last 30 and 60 days.

3. This is one I'm interested in, but I believe there will be a better time to punch this ticket.

For my previous take on Hot Topic, see Ticker Shock: Three Reasons Hot Topic Isn't, Well, A Hot Topic.

The homebuilder disseminated its third-quarter numbers. The company reported a fat loss, and it missed on the revenue line as well.

Some quick thoughts:

It's not that I don't like the company. It's that I can't find a reason to like the stock. It's under $5, which is a turn-off, and the losses that are expected are a colossal bummer, too. Additionally, estimates for this year and next have been on the way down (ironically getting my blood pressure up).

For my last take on Hovnanian, click here.
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No positions in stocks mentioned.

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