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2 Top Stocks Rally As The Force Awakens Them

Few industry groups escaped the market’s wrath Monday. IBD’s Leisure-Toys/Games group was one that did. It climbed more than 1%, fueled by a heavy-volume advance by Hasbro ( HAS ), which reported Q4 results ahead of the open. The Pawtucket, R.I.-based company earned $1.39 a share, up 14% from last year and 9 cents over views. Revenue climbed 13% to $1.465 billion, topping forecasts for $1.365 billion. Sales rose 23%, excluding pressure from the strong dollar. The 13% rise was Hasbro’s biggest quarterly sales gain in nearly five years. Results got a boost from toys based on Disney ‘s ( DIS ) “Star Wars: The Force Awakens,” such as action figures, masks and lightsabers, and Universal Pictures’ “Jurassic World” products. Sales from boys’ toys jumped 35%, but girls’ toys fell 17%. Hasbro advanced 1.5% Monday, reclaiming its 200-day moving average as it works on the right side of a seven-month consolidation. It’s been an outperformer, rising 11% this year. Highly regarded Fidelity Contrafund owned shares as of Dec. 31. The Transformers and Nerf maker raised its quarterly dividend by 11% to 51 cents a share. For the full year, Hasbro’s EPS rose 11% to $3.51 a share. Analysts expect a 12% increase this year and 9% the next. Global rights to produce Disney’s “Frozen” and other Disney Princess dolls transferred to Hasbro from Mattel this year. IBD’s toys and games subgroup rallied to No. 17 in Monday’s issue, up from No. 151 six weeks ago. It spiked more than 5% intraday Thursday, after Bloomberg reports that the two major toy makers began discussing a possible merger late last year. On Monday, Hasbro CEO Brian Goldner said on the company earnings conference call that he is open to potential “add-on acquisitions.” Mattel ( MAT ), which makes “Star Wars”-based Hot Wheels toys, last week reported Q4 profit that increased 21% to 63 cents a share on flat sales of $1.99 billion, beating forecasts on both the top and bottom lines. It benefited from an 8% revenue increase in Barbie dolls and a 26% jump in its wheels segment, which includes Hot Wheels and Matchbox cars, on a constant-currency basis. The stock soared 14% Tuesday to a 14-month high, surpassing a 28.03 handle buy point in robust trade. It’s well extended past the entry. The El Segundo, Calif.-based company’s Q4 profit marked its first quarterly gain in more than two years. Analysts expect full-year EPS to resume growth at 12% this year and 25% in 2017, after big declines the past two years. Mattel leads Hasbro with respective Composite ratings of 92 and 90, but its EPS Rating  lags at 46 to 78. Mattel has a 97 RS, reflecting the stock’s 18% advance this year, while Hasbro’s RS is a respectable 87. Other stocks in the toy maker group include Jakks Pacific ( JAKK ), which is trading below 7 a share and near nine-month lows. It has a subpar 61 Composite Rating.

Qualys Slammed On Q4, 2015 Sales Miss, Sluggish Q1 Guidance

Cloud-securer Qualys ( QLYS ) more than doubled its losses from the regular stock-trading session after-hours on Monday, as it missed the consensus analyst view on Q4 and 2015 sales and offered Q1 guidance that lagged Wall Street expectations. In extended trading Monday, Qualys stock plunged 6.7% after wrapping the day down 6.1% at the closing bell. High-tech stocks toppled Monday on continued pressure following LinkedIn ( LNKD ) and Tableau ‘s ( DATA ) poorly received forecasts late last week. And stocks were widely slammed by global worries , with the price of oil again dropping to about $30 a barrel. IBD’s 41-company Computer Software-Security industry group closed Monday down 7.2% after ending Friday down 7.4%. Shares of Proofpoint ( PFPT ), FireEye ( FEYE ), CyberArk Software ( CYBR ) and Palo Alto Networks ( PANW ) also suffered Monday and closed the day down 10.3%, 9.5%, 9% and 9.3%, respectively. For its Q4 ended Dec. 31, Qualys reported $44.4 million in sales and 21 cents in earnings per share excluding items, up 21% and 40%, respectively. EPS minus items easily topped the consensus of 16 analysts polled by Thomson Reuters for 17 cents, but sales were slightly short of Wall Street expectations for $44.6 million. Qualys wrapped the year with 70 cents EPS ex items on $164.3 million in sales, up 52% and 23%, respectively, year over year. Sales fell short of the consensus view for $164.4 million, but EPS minus items topped projections for 66 cents. In both cases, Q4 and 2015 sales were in line with Qualys’ prior guidance, but EPS minus items topped the high end of earlier views. Current-quarter guidance for $44.7 million to $45.4 million and 14-16 cents EPS ex items would be up 20% and flat, respectively, at the midpoints of the outlook. But both views missed the consensus model for $46.3 million and 18 cents. Qualys stock hit an all-time high of 55.47 on May 4, 2015, but plunged nearly 33% the next day after missing Q2 expectations. Since then, shares have fallen another 39%.

Will Global Economic Worries Slow Online Travel Giant Expedia?

Online travel agency (OTA) Expedia ( EXPE ) is set to report earnings after the close on Wednesday — and analysts polled by Thomson Reuters expect double-digit percentage growth amid challenges. Expedia is set to grow revenue by 26% to $1.71 billion in Q4, compared with the year earlier quarter revenue of $1.36 billion, according to the consensus view. EPS minus items is expected to jump 16% to $1, from 86 cents, according to the poll of analysts. Expedia stock was down about 3.5% in afternoon trading on the stock market today . The market overall was down on Monday on worries  over the global economy and oil back under $30 a barrel. Expedia has an IBD Composite Rating of 52, where 99 is the highest. Analysts have been expressing concern for the health of online travel companies as of late, citing the slowing global economy and increased competition. In a research note Monday, RBC Capital Markets analyst Mark Mahaney wrote that web traffic to Expedia’s various properties has been slightly up during the quarter, but attributed it to the fact that the firm acquired Orbitz in September and in December  HomeAway , a large alternative accommodations platform. Those acquisitions also make the quarter more difficult for analysts to model, Mahaney says. U.S. online travel trends are slightly negative, he says, based on web traffic data from ComScore ( SCOR ) that show single-digit growth that may be slowing. But, Mahaney wrote that bookings growth is likely to remain strong and that the economics of Expedia’s per-unit costs remain favorable and growing. “Expedia has been an improving execution story for some time now, and has emerged as an excellent play on the secular growth of Online Travel and as a strong integrator of assets,” Mahaney wrote in the research note. Mahaney says that he expects executives to issue guidance on earnings before interest, taxes, depreciation and amortization (EBITDA) of low double-digit growth in its core online travel bookings business. But, the slowing global economy may change that guidance. Though Expedia and rival OTA Priceline ( PCLN ) acknowledge that startup Airbnb — which lets people rent their home, room in a home, or apartment to travelers via its website — is a threat to their businesses, Priceline executives have thus far dismissed it as “not material.” Both Expedia and Priceline are adding inventory that’s similar to Airbnb’s, which in industry jargon are “alternative accommodations.” TripAdvisor Stock At Lowest Since 2013 Down more than 4%, near 56 in afternoon trading Monday, TripAdvisor ( TRIP ) stock has taken a beating thus far in 2016. The company is set to report Q4 earnings on Thursday. Analysts polled by Thomson Reuters expect the top line to grow at a modest 3% to revenue of $298.5 million, up from $288 million in the year-earlier quarter. EPS ex-items is expected to fall 6% to 33 cents from 35 cents. Cowen analyst Kevin Kopelman wrote in a research note earlier this month that TripAdvisor would be the OTA he would be most concerned about in a bear market.