A humorous look at the companies that caught our eye, for better or worse, this week.
Allergan
AGN (NYSE)
April 25, 2014 close: $168.15 (U.S.)
up $34.23 or 25.6% over week
Understanding Wall Street, Chapter 1.
If you buy a stock based on non-public information, it’s called insider trading and you go to jail. But if billionaire Bill Ackman scoops up $4-billion of Allergan shares based on non-public knowledge that his hedge fund is joining with Valeant Pharmaceuticals to take a run at the Botox maker, it’s called being a shrewd investor. Wall Street rigged? Don’t be ridiculous.
Apple
AAPL (Nasdaq)
April 25, 2014 close: $571.94 (U.S.)
up $47 or 8.9% over week
Business quiz!
Shares of Apple surged this week because:
a) The Siri voice app comes with a new “X-rated bedtime stories” feature;
b) It turns out Steve Jobs faked his own death and is returning as CEO;
c) Apple posted better-than-expected earnings, boosted its share buyback to $90-billion from $60-billion and announced a seven-for-one stock split, prompting analysts to hike their price targets.
Answer: c.
Rogers Communications
RCI.B (TSX)
April 25, 2014 close: $42.28
down $1.99 or 4.5% over week
Customers love to bash Robbers, er, Rogers. Now it’s investors’ turn: The wireless and cable giant posted first-quarter results well below expectations, hurt by a combination of lower revenues per user, anemic growth in wireless subscribers and a lack of compelling new smartphones. Judging by the stock’s plunge this week, a lot of investors are cancelling their contracts.
Harley-Davidson
HOG (NYSE)
April 25, 2014 close: $71.65 (U.S.)
up $5.01 or 7.5% over week
Riding a motorcycle is exhilarating – except for the speeding tickets, hearing damage and fatalities. But there’s a safer way to indulge your passion for two-wheeled thrills: Invest in Harley-Davidson’s stock. Boosted by higher motorcycle shipments and cost cuts, the company posted sharply higher first-quarter revenue and earnings, causing its stock to pop a wheelie.
Lululemon Athletica
LULU (Nasdaq)
April 25, 2014 close: $45.50 (U.S.)
down $6.21 or 12% over week
If Lululemon was hoping last week’s investor presentation would restore investor confidence, it didn’t work. One analyst lamented the lack of “concrete details regarding the company’s business analysis and plans.” Another cited “the distinct impression of a company losing focus.” Judging by the stock’s tumble, we get the distinct impression that investors are giving up on the yoga wear retailer.