Europe Expectations High (AVAV, VRA, MON, TLB, CAGC, RFMD)
Stocks ended the day mixed as investors continue to look towards an ECB rate decision tomorrow and the conclusion of an EU summit on Friday. Expectations appear to be fairly high, so unless there is some tangible progress or a bigger-than-expected rate cut, it could turn into a sell on the news type of event. Rumors of a $600 billion IMF lending program to Europe helped stocks rally late, but the IMF denied the report just before the market close. S&P, meanwhile, was out with more negative commentary, saying it could also downgrade the EU and some large European banks. We’re looking for some decent volatility to close the week, with the last few days a sort of calm before the storm.
The Chinese Agriculture Stocks Index was the top performing tickerspy Index on the day, led by China Agritech (CAGC) with a 56% gain. The RF Semiconductor Stocks Index was the day’s worst performing tickerspy Index, with RF Micro Devices (RFMD) down -8%.
Stocks ended the day mixed, with the Dow rising 46 points to 12,196. The S&P edged up 3 points to 1,261, while the Nasdaq fell fractionally to 2,649. Oil dropped -79 cents to $100.49 a barrel, while gold rose $13.00 to $1,744.80 an ounce.
In earnings news, AeroVironment (AVAV), the California-based drone maker, said its fiscal second-quarter profit rose to $6.6 million, or 30 cents a share, from $262,000, or 1 cent a share, a year earlier. Sales climbed to 26% to $80.4 million. Analysts had expected a profit of 20 cents a share. For fiscal Q3, the company guided for EPS of 35-45 cents on sales of $80-90 million versus a consensus for EPS of 45 cents on sales of $88.8 million. Shares of AeroVironment fell -1.1%.
Shares of Vera Bradley (VRA) slid -2.2% after the handbag and accessories company forecast a fourth-quarter profit of 44-47 cents on revenue of $125-130 million. Analysts were expecting a profit of 47 cents per share on revenue of $130.1 million. For the third quarter, Vera Bradley earned $13.0 million, or 32 cents per share, compared with $6.0 million, or 17 cents per share, a year earlier. Sales increased 32% to $121.1 million. Analysts had expected a profit of 28 cents per share on revenue of $109.4 million. Three pros counted Vera Bradley among their top holdings at the end of Q3 and more than 20 tickerspy members own the stock in their portfolios.
Seed and pesticide maker Monsanto (MON) raised its fiscal first-quarter profit guidance to 15-20 cents a share due to a strong contribution from its South American operations. The company’s previous guidance called for EPS of 10-15 cents. Analysts were expecting EPS of 13 cents. The company still expects a full-year profit of $3.34-$3.44. Analysts were expecting $3.47 a share. Shares of Monsanto fell -0.8%. Thirty-two pros held Monsanto in their portfolios at the end of Q3 and over 1,500 tickerspy members own the stock in their portfolios.
Shares of Talbot’s (TLB) surged 69.9% after the company received a takeover offer from private-equity firm Sycamore Partners, valuing the apparel retailer at $3 per share, or $212.1 million. Sycamore already owns a 9.9% stake in the troubled retailer.
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