European Worries Persist (YHOO, FRAN, BMC, ORCL, ACOM, GOLF, MVG)
Stocks continued their downward trend as European worries persist. With Greece still in a political stalemate, expectations have risen that the country could eventually drop the euro currency. We think, while potentially painful in the near term, that ultimately this would be the correct move for the country to make as Greece would then be able to deflate its currency to help spur economic growth. Currency devaluation has helped countries like Argentina and Iceland rebound in the recent past. The near-term problem, though, is that it could increase borrowing rates for the EU’s other troubled nations.
The Sporting Goods Retailer Stocks Index was the top performing tickerspy Index on the day, led by Golfsmith Intl Hldgs (GOLF) with a 28% gain. The Canadian Mining Stocks Index was the day’s worst performing tickerspy Index, with MAG Silver (MVG) down -11%.
Stocks fell on the day, with the Dow off -116 points to 12,705. The S&P dropped -15 points to 1,338, while the Nasdaq lost -31 points to 2,903. Oil fell -$1.35 to $94.78 a barrel, while gold slipped -$23.00 to $1,561.00 an ounce.
Shares of Internet search provider Yahoo (YHOO) rose 2.0% after Chief Executive Scott Thompson resigned. The company named Ross Levinsohn interim CEO. Thompson came under pressure to leave the company after an investor alleged he lied about his education credentials on his resume. Thompson also revealed that he had been diagnosed with thyroid cancer. Nearly 60 pros held Yahoo in their portfolios at the end of Q1 and more than 1,450 tickerspy members own the stock in their portfolios.
Shares of women’s retailer Francesca’s Holdings (FRAN) surged 6.6% after the company raised its first-quarter profit outlook to 17-18 cents a share from 14-15 cents. Analysts were expecting EPS of 15 cents. The retailer also fired Chief Financial Officer Gene Morphis for leaking sensitive information on various social media outlets. Cynthia Thomassee replaced Morphis as interim chief financial officer.
Shares of BMC Software (BMC) soared 8.7% after the company adopted a poison pill plan to guard against a hostile takeover after hedge fund Elliott Associates LP acquired a stake of more than 5% in the company. Elliott has a reputation for amassing stakes in companies and then pressuring management to solicit takeover offers. One analyst said Oracle (ORCL) could be a potential suitor for BMC. Eight pros counted BMC Software among their top holdings at the end of Q1 and 110 tickerspy members own the stock in their portfolios.
Shares of Ancestry.com (ACOM) plunged -13.7% after NBC decided against a fourth season of Ancestry.com’s adaptation of the British show “Who Do You Think You Are.” The show debuted in the U.S. in 2010.
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