A humorous look at the companies that caught our eye, for better or worse, this week
WAL-MART - DOG
Things that are hard to find:
1) A needle in a haystack;
2) A happy baseball fan in Texas;
3) A sales associate who can actually help you at Wal-Mart.
Citing the need to invest in higher employee wages, better training and improved e-commerce technology, the discount giant warned that profit in the next fiscal year will fall by 6 per cent to 12 per cent, sending the stock to its biggest one-day drop in 27 years. Investors are heading for the checkout lines.
WMT (NYSE), $58.89 (U.S.), down $7.80 or 11.70% over week
NETFLIX - DOG
Don’t miss Netflix’s new original series, Day Trader. It’s the fast-paced story of a young investor who lives in his mother’s basement and makes a leveraged bet on Netflix’s stock, only to lose everything when Netflix’s subscriber growth misses expectations. Will the shares recover? Will Netflix’s meagre profit – which skidded 50 per cent in the third quarter – ever justify its P/E of more than 400? Will the Day Trader’s mom get her house back? Tune in to find out.
NFLX (Nasdaq), $98.99 (U.S.), down $14.34 or 12.6% over week
VALEANT PHARMACEUTICALS - DOG
Business quiz! Valeant Pharmaceuticals plunged this week because:
a) In a small percentage of cases, people taking one of its drugs repeatedly rolled over and begged for a doggy biscuit;
b) Chrysler, maker of the Valiant compact car in the 1960s and 1970s, sued Valeant for trademark infringement;
c) The company received subpoenas from U.S. prosecutors over its drug pricing policies.
Answer: c.
Judging by the stock’s rebound, however, investors aren’t giving up on Valeant just yet.
VRX (TSX), $227.40, down 16¢ or 0.07% over week
JOHNSON & JOHNSON - STAR
Johnson’s baby shampoo promises “no more tears.” But the only tears J&J investors were shedding this week were tears of joy. Even as it battled a strong U.S. dollar, the maker of consumer products, pharmaceuticals and medical devices posted adjusted third-quarter earnings of $1.49 (U.S.) a share, beating the average estimate of $1.45. With J&J lifting its full-year guidance and announcing a $10-billion stock buyback, the stock’s smelling clean and fresh.
JNJ (NYSE), $98.24 (U.S.), up $2.87 or 3% over week
GARMIN - DOG
Bad: Getting wrong directions from your GPS and ending up at the North Pole.
Worse: Owning shares of GPS maker Garmin.
Already struggling as more consumers use their smartphones instead of stand-alone navigation devices, the company warned that third-quarter results will be hit by the sluggish global economy, competitive pricing and currency headwinds that will cause sales to come in well below estimates. Investors are sending up the flares.
GRMN (Nasdaq), $34.09 (U.S.), down $2.98 or 8% over week