A humorous look at the companies that caught our eye, for better or worse, this week.
Crude oil
CL (WTI fut)
Oct. 17, 2014 close: $82.75 (U.S.)
down $3.07 or 3.6% over week
Actual theories that were advanced this week to explain the dramatic drop in oil prices:
1) The United States and its allies are conspiring to hurt Vladimir Putin and/or the Islamic State;
2) Global growth is slowing;
3) U.S. production is rising;
4) OPEC is willing to let prices fall to protect its market shares;
5) Traders were “panic selling.”
Good to see we can all agree on why the market collapsed.
Textron
TXT (NYSE)
Oct. 17, 2014 close: $36.65 (U.S.)
up $3.46 or 10.4% over week
Flying an airplane is hard: I watched some YouTube videos first and still crashed. It’s a lot easier making money on airplane manufacturer Textron. Buoyed by an 18-per-cent jump in revenue, the maker of Bell Helicopters and Cessna, Beechcraft and Hawker airplanes posted better-than-expected third-quarter earnings and raised its full-year forecast. Investors are enjoying the view from above the clouds.
Netflix
NFLX (Nasdaq)
Oct. 17, 2014 close: $357.09 (U.S.)
down $94.99 points or 21% over week
Test your business knowledge! Netflix’s stock cratered this week because:
a) The company added three million subscribers in the third quarter, well below its forecast of 3.69 million;
b) Netflix projected fourth-quarter earnings of 44 cents (U.S.) a share, roughly half of what analysts were expecting;
c) The stock’s multiple of 100 times estimated 2014 earnings left it vulnerable to any signs of a slowdown in growth.
Answer: all of the above.
Mattel
MAT (Nasdaq)
Oct. 17, 2014 close: $28.78 (U.S.)
down $1.95 or 6.3% over week
Mattel executive: “Barbie, your sales plunged 21 per cent in the third quarter. What do you have to say for yourself?”
Barbie: [silence]
Executive: “I’m serious, Barbie. That’s the fourth double-digit drop in a row. Our stock is getting hammered.”
Barbie: [silence]
Executive: “Could you at least wipe that smile off your face?”
Domino's Pizza
DPZ (NYSE)
Oct. 17, 2014 close: $84.84 (U.S.)
up $8.43 or 11% over week
Now we know where all the McDonald’s customers went: Domino’s.
Even as its fast-food rivals struggle, the pizza chain posted same-store sales growth of more than 7 per cent – both domestically and internationally – in the third quarter, helped by an increase in online orders and new products including chicken. With profit beating analyst expectations, the stock is piping hot.