Stocks Finish Mixed Amid European Worries, Hedge Fund Raids (TSN, VAL, NOVL, MSFT, GMCR)
Stocks rebounded from their intraday lows to finish mixed. The big news impacting the trading day was Ireland finally admitting that it was indeed in debt trouble and needed help. The fear continues to be that Portugal and Spain could be the next European Union countries to need bailouts. Meanwhile, the FBI raiding three hedge funds over insider trading also grabbed headlines and initially sent the market lower as well. All in all, though, we view the market’s bounce back as a positive near-term sign for stocks.
Stocks ended the day mixed, with the Nasdaq rising 14 points to 2,532. The Dow fell -25 points to 11,179, while the S&P lost -2 points to close at 1,198. Oil slipped -24 cents to $81.74 a barrel, while gold rose $5.50 to $1,357.80 an ounce.
In earnings news, packaged foods firm Tyson Foods (TSN) announced a return to fiscal fourth-quarter profitability, sending its shares 6.1% higher. The company posted net income of $213 million, or 57 cents per share, for the three months ended October 2nd, compared to a net loss of -$457 million, or -$1.23 per share, in the same period last year. Excluding certain items, adjusted EPS came to 64 cents, which was 9 cents better than analysts’ expectations. Revenue rose by 3% to $7.44 billion, which was below the $7.75 billion consensus.
Valspar (VAL) saw its shares rise 5.6% after the paint company announced its fiscal fourth-quarter results. The company earned $51.3 million, or 51 cents per share, compared to $49.9 million, or 49 cents per share, in the fourth quarter of fiscal 2009. Excluding certain items, the company’s adjusted EPS totaled 56 cents, which was 7 cents better than Wall Street’s expectations. Revenue grew by 13% to $876.8 million, which was also ahead of the $841.8 million consensus. Valspar guided for 2011 adjusted EPS of between $2.45-$2.65, compared to the $2.45 analysts were looking for. Twelve Pros counted Valspar in their top-15 U.S.-listed equity holdings at the end of Q3, and 40 tickerspy members hold the stock in their portfolios.
In M&A news, software firm Novell (NOVL) agreed to be acquired by privately held Attachmate for approximately $2.2 billion, or $6.10 a share. Attachmate is owned by an investment group that includes Francisco Partners, Golden Gate Capital, and Thoma Bravo. Novell will also sell select intellectual property assets to a consortium or tech companies led by Microsoft (MSFT). Shares of Novell rose 6.6%.
Shares of Green Mountain Coffee Roasters spiked by 18.2% after the company announced plans to restate financial statements from fiscal years 2007, 2008, 2009, and the first three quarters of 2010. The company expects adjustments to reduce cumulative profits by -$6.1 million to -$6.5 million, or -4 cents to -5 cents per share. The company also noted that none of the accounting errors “implicate misconduct” on behalf of the firm or its employees, and was not related to the company’s relationship with fulfillment vendor M. Block & Sons, which was put under SEC scrutiny back in September. At the end of Q3, seventeen Pros counted Green Mountain in their top-15 U.S.-listed equity holdings, and 410 tickerspy members hold the stock in their portfolios.
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