Will Global Woes Drag Us Down? (DKS, PAY, NTRI, MRK, SHFL, ONTY)
Stocks took it on the chin today, as Eurozone GDP turned negative in Q4 and slowed to 2.7% growth in Brazil. Combined with a reduced target from China yesterday, the fear is that the global economy could drag down the U.S. Higher beta and cyclical names were hit particularly hard as investors looked to reduce risk. With the market on an outstanding run since the fall, today could potentially be the start of what could be viewed as an inevitable pullback (after all the market doesn’t go up in a straight line). One day doesn’t make a trend, but if this indeed is the start of a pullback, we’re looking for a more typical bull market correction, and not falling back into a bear market. That said, we have been reluctant to chase this market, and would look forward to some better entry points.
The Gaming and Slot-Machine Stocks Index was the top performing tickerspy Index on the day, led by Shuffle Master (SHFL) with a 10% gain. The Cancer Stocks Index was the day’s worst performing tickerspy Index, with Oncothyreon (ONTY) down -40%.
Stocks plunged on the day, with the Dow tumbling -204 points, or -1.6%, to 12,759. The S&P lost -21 points to close at 1,343, while the Nasdaq dropped -40 points to 2,910. Oil fell -$2.02 to $104.70 a barrel, while gold slipped -$31.80 to $1,672.10 an ounce.
In earnings news, shares of Dick’s Sporting Goods (DKS) climbed 2.9% after the company said its fiscal fourth-quarter profit rose 27% to $111.1 million, or 88 cents per share, from $87.5 million, or 71 cents per share, a year earlier. Revenue increased 6% to $1.61 billion. The profit and revenue numbers matched analyst estimates. Looking forward, Dick’s expects a first-quarter profit of 36-38 cents a share and a same-store sales increase of 3%-4%. Analysts were expecting EPS of 36 cents. The company forecast full-year EPS of $2.38-$2.41 on same-store sales growth of 2%-3%. Analysts were expecting a profit of $2.40 a share.
Shares of VeriFone Systems (PAY) surged 7.9% after the company forecast a 2012 adjusted profit of $2.60-$2.66 per share, topping the $2.59 analysts were expecting. In its fiscal first quarter, VeriFone posted a loss of -$3.1 million, or -3 cents per share, compared to net income of $32 million, or 35 cents per share, a year earlier. On an adjusted basis, VeriFone earned 58 cents per share. Revenue rose to $420 million from $411 million. Analysts had expected EPS of 52 cents on revenue of $417.8 million.
Shares of NutriSystem (NTRI) plunged -10.9% after the company posted a fourth-quarter loss of -$1.2 million, or -4 cents per share, compared with a year-earlier profit of $7.1 million, or 25 cents per share. Revenue slid -24% to $66.9 million. Analysts had expected a loss of -2 cents per share on revenue of $65.3 million. The company forecast 2012 EPS of 45-55 cents, well below the 92 cents analysts are expecting. Two pros counted NutriSystem among their top holdings at the end of Q4 and more than 170 tickerspy members own the stock in their portfolios.
Shares of Dow component Merck (MRK) slid -2.6% after the drugmaker forecast a first-quarter adjusted profit of 95-98 cents per share, below the $1.01 per share analysts are expecting. The company said foreign currency issues would lower revenue by -1% to -2% in the quarter. Merck maintained its full-year EPS forecast of $3.75-$3.85 and said it expects revenue to be similar to the $48.05 billion posted in 2011. More than 210 pros held Merck in their portfolios at the end of Q4 and almost 1,600 tickerspy members own the stock in their portfolios.
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