Too Many Investors Looking for a Dip? (GPN, V, GRPN, AVP, ESRX, BTX, SOL)
Stocks started Q2 on a positive note, buoyed by positive manufacturing data in the U.S. and China, with the country’s official government PMI rising to its highest level in a year. The increase was in contrast to the decline British bank HSBC reported earlier for China. The U.S.-China news overshadowed a report that showed Eurozone manufacturing activity had dropped to a three-month low and that unemployment hit a new all-time high of 10.8%. April, as we noted, has tended to be the market’s best month recently. While the trend may continue, we are still looking for a spring/summer pullback. However, we do wonder if too many investors are looking for a dip.
The Stem Cell Stocks Index was the top performing tickerspy Index on the day, led by BioTime (BTX) with a 8% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with ReneSola (SOL) down -9%.
Stocks rose on the day, led by a 28-point, or 0.9%, increase in the Nasdaq to 3,120. The Dow climbed 52 points to 13,264, while the S&P jumped 10 points to 1,419. Oil advanced $2.20 to $105.23, while gold moved up $7.70 to $1,679.70 an ounce.
In economic news, the Institute for Supply Management’s factory index increased to 53.4 last month from 52.4 in February, topping the median forecast of 53.0. Readings above 50 indicate expansion.
In earnings news, shares of payment processor Global Payments (GPN) slid -3.8% after the company missed earnings estimates and Visa (V) announced it was dropping the firm from its list of approved service providers. For its fiscal third quarter, profits rose to $57.92 million, or 73 cents per share, from $47.78 million, or 59 cents per share, a year earlier. On an adjusted basis, the company earned 83 cents. Revenue increased 17% to $533.5 million. Analysts had expected a profit of 84 cents on revenue of $529.3 million.
Shares of daily deal website Groupon (GRPN) plunged -16.9% after the company said last Friday night that its fourth-quarter loss was wider than originally reported because of having to set aside more money for refunds. Following a revision, Groupon posted a fourth-quarter loss of -$65.3 million, or -12 cents per share, on revenue of $492.2 million. Groupon originally reported a loss of -$42.7 million, or -8 cents per share, on revenue of $506.5 million. The company reiterated first-quarter revenue estimates of $510-$550 million. Six pros counted Groupon among their top holdings at the end of Q4 and 30 tickerspy members own the stock in their portfolios.
Shares of cosmetics maker Avon Products (AVP) surged 17.2% after the company rejected a $10 billion takeover offer from privately held Coty. Avon said the offer undervalues the company. Avon is currently searching for a new CEO.
Express Scripts (ESRX) completed its $29.1 billion acquisition of rival Medco Health Solutions today, creating the largest pharmacy benefits manager in the process. The combined company expects $1 billion in costs savings as a result of the deal. Shares of Express Scripts rose 2.4%. Nearly 70 pros held Express Scripts in their portfolios at the end of Q4 and 420 tickerspy members own the stock in their portfolios.
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