A humorous look at the companies that caught our eye, for better or worse, this week
The planet is warming, the global economy is in turmoil and the leader of the free world is facing impeachment. But the big question many people are asking is: What colour of running shoes should I buy? Even as the world descends into chaos, athletic shoe and apparel giant Nike posted a 7-per-cent revenue increase to US$10.7-billion in its fiscal first quarter – driven by a 27-per-cent gain in China – as earnings topped expectations, sending the stock to a record. When the fighting and looting begins, you’ll want to have a good pair of running shoes.
Why do they call it BlackBerry? Maybe because investors just got a Black eye and they’re Berry upset about it. Shares of the software and services provider sank to nearly a six-year low after fiscal second-quarter revenue missed estimates and the company reported a loss of US$44-million, compared with a profit of US$43-million a year earlier. With BlackBerry trimming the high end of its full-year revenue guidance amid weakness in its Internet of Things and Cylance cybersecurity businesses, investors are nursing a shiner.
LATAM Airlines (STAR)
Business quiz! Shares of Chile-based LATAM Airlines soared after the company: a) announced the world’s first zero-emissions airline powered entirely by passenger-pedalled stationary bicycles; b) was selected by Bon Appétit magazine for having the best peanuts of any airline, “with a crunchy-salty beginning and a smooth, peanut-buttery finish that had us asking the flight attendant for more”; c) said it will sell a 20-per-cent stake to Delta Air Lines for US$1.9-billion. Answer: c.
Momentum is a wonderful thing on the way up. On the way down, not so much. Just ask a Netflix investor. The streaming giant’s formerly high-flying shares continued to fall – putting them on pace for their worst quarter in seven years – amid growing concerns that the launch of competing services from Disney and Apple in November will lure away subscribers and force Netflix to crank up its already massive spending on content, denting profitability. With the stock still trading at about 80 times estimated 2019 earnings, there may be a long way down yet.
Horizons Marijuana Life Sciences ETF (DOG)
When the experts said diversify, they didn’t mean spread your money across a whole bunch of different marijuana stocks, dum-dum. The Horizons Marijuana Life Sciences ETF – which holds a basket of more than 60 cannabis-related companies – has plunged about 47 per cent in the past year as producers struggle with continuing losses, slower-than-expected growth, regulatory issues, delays in the rollout of retail stores and a black market that undercuts prices for legal marijuana. If you want to diversify, consider banks and utilities, okay?