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The Unusual Suspects For The Week Ahead (ARO, APEI, IRE, BRK-A, BRK-B, CSCO, DNDN, GSAT, HPQ, RIMM, SD, TGT, TNH, DIS, GLD)

There are many issues on deck for The Unusual Suspects that are carryover issues from Friday or which have events on the schedule.  This week’s Unusual Suspects for the week ahead covers Aeropostale, Inc. (NYSE: ARO), American Public Education, Inc. (NASDAQ: APEI), The Bank of Ireland (NYSE: IRE), Berkshire Hathaway Inc. (NYSE: BRK-A), Cisco Systems Inc. (NASDAQ: CSCO), Dendreon Corporation (NASDAQ: DNDN), Globalstar, Inc. (NASDAQ: GSAT), Hewlett-Packard Co. (NYSE: HPQ), Research-in-Motion Limited (NASDAQ: RIMM), SandRidge Energy, Inc. (NYSE: SD), Target Corporation (NYSE: TGT), Terra Nitrogen Company, L.P. (NYSE: TNH), Walt Disney Co. (NYSE: DIS), and even the SPDR Gold Shares (NYSE: GLD).  We have given a large rundown of the event or catalyst for each, as well as our directional expectations for the week ahead.

Aeropostale, Inc. (NYSE: ARO) did some technical damage and the fundamentals may be shifting here.  This is a company that managed to grow sales during much of the recession and either the cycle is peaking or there are issues.  When it said that same-store sales grew only 1%, it also gave the revenue figure for its Q2 period rising 9% to $495.1 million with an expected earnings of $0.45 to $0.46 EPS vs. $0.38 a year ago but versus a prior guidance of $0.45 to $0.48 EPS.  The company said the guidance was “due primarily to the challenging retail environment, as well as a change in consumer shopping behaviors.”  The company has earnings estimates of $2.79 EPS this year, $3.02 EPS next year, and $3.36 two-years out.  Shares are not expensive in valuation at under $25.00 versus a 52-week range of $19.10 to $33.24, but the problem is this was over $30.00 as recently as July 23.  This one was weak on above average volume.  Aeropostale shares have to fly lower.  If this follows the same pattern as late 2008 when it broke under the 200-day moving average as we saw this week, then this will stabilize for a few days and then it will fall about 15% lower.  There is more risk than reward in the stock.

American Public Education, Inc. (NASDAQ: APEI) murdered its shareholders with its lower full-year guidance based upon lower military student enrollments.  Shares hit a new 52-week low of $28.50 with a closing price of $28.96.  The 32% drop on Friday, along with the new legislation after industry investigations that risk federal funding, is going to keep pressure on it and on peers (for-profit education peer tickers are APOL, CECO, COCO, WPO, LOPE, BPI, CPLA, EDMC, DV, ESI, LINC).  The turbulence and volatility here will likely remain elevated for this company and its related peers.

The Bank of Ireland (NYSE: IRE) had its ADRs touted by Barron’s in this weekend’s edition for international traders.  It noted, “A Brighter Day for Two Bailed-Out Banks : Lloyds Banking Group and Bank of Ireland appear poised to perform well.”  We have previously noted how this one could run up to $5.50 before any real resistance comes into play.  This leaves about 20% upside if our call is right.  The stock is still under the highs on Monday of $4.86 with a $4.75 close, but this Friday’s close versus the prior Friday’s close IRE’s brought a gain of almost 4%.  Unless the Euro-currency tanks, there is more room to run higher here.

Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) reported earnings on Friday after the close that can be interpreted as both bearish and bullish.  Earnings were $3.074 billion versus $1.78 billion in the second quarter of 2009 as $1,866 per share on an adjusted basis.  The net figure after you back out a $671 per share hit against earnings from the derivatives losses comes to earnings of $1,195 per share. Thomson Reuters had estimates at $1,360.44.  The A-Shares closed at $120,600.00.  Berkshire Hathaway still holds the week old “top performer” as we said the performance of the conglomerates was making “2010, The Year of the Conglomerates.”

Cisco Systems Inc. (NASDAQ: CSCO) may be a winner of the H-P scandal as its efforts to go into the data center now competes against H-P.  Cisco has earnings on Wednesday after the closing bell. and it was in our “Next Week’s Can’t Miss Earnings” on Friday before the close.  At $24.07, its 52-week trading range is $20.68 to $27.74.

Dendreon Corporation (NASDAQ: DNDN) was reported after the close Friday as having received a letter from the FDA hitting it on marketing materials, which we have outlined at BioHealthInvestor.com with our expected outlook.  Profit taking versus buyout rumors (hopes).

Globalstar, Inc. (NASDAQ: GSAT) is still up considerably from the lows of late-2008 and early-2009 but at $1.77 this is down close to 90% from the post-IPO highs of late 2006. The sat-phone provider had a late-Friday amended S-3 filing around 2:40 PM EST showing that holders would be able to sell up to 13,000,000 shares from stockholders associated with its acquisition on December 18, 2009 of certain assets and the assumption of certain liabilities of NOXA Holdings LLC.  Go back to December 18 and the stock was only trading at $0.95 versus the $1.77 close on Friday.  Some guys who sold their company are now able to lock in an extra 84% in gains on top of the business sale.  With an average volume of about 700,000 shares and with trading volume having been low and under average volume every day since July 16, it seems like a selling volume wave from holders is about to come into play that could make shares a bit cheaper.  Its 52-week range is $0.61 to $2.11.

Hewlett-Packard Co. (NYSE: HPQ) was of course on you knew would be here.  The stock got throttled in the end of day after the close on Friday after Mark Hurd’s expense account fiasco around an improper relationship with a contractor over sexual harassment forced a Mark Hurd resignation.  This just created a technical event by breaking its 50-day moving average AND by breaking the lows of June-July AND with a new 52-week low after the close on more than 14 million shares in the post-4:00 PM close.  There is going to be massive trading in this one for some time now as investors fight over this being an opportunity or the aftermath of a peaked company.

Research-in-Motion Limited (NASDAQ: RIMM) and Saudi Arabia have reportedly reached a deal on accessing data of the BlackBerry users to halt a ban on the phone’s messenger service.  A BlackBerry server will go inside Saudi Arabia for its messaging to be tracked.  This was something you knew was on the way.  This fiasco cost RIM shares a sharp 7% loss for this last week.

SandRidge Energy, Inc. (NYSE: SD) rose 1.5% after the shares were smacked down relentlessly to new 52-week lows of $4.97 after it lowered its 2010 production targets.  Much should have been known about the issues already.  Near-term we have the mantra that stocks hitting 52-week lows tend to keep doing so.  But we also gave a very detailed outlook on our expectations here.   SandRidge may be setting itself as one of the largest upside opportunities of the smaller oil and gas players.

Target Corporation (NYSE: TGT) is going to be one to watch as Barron’s gave it the cover story in this weekend’s paper.  Barron’s Lawrence Strauss summary stated: “The fabled discounter is aiming to thrive even if the economy sputters. That’s good news for shoppers — and shareholders.”  After closing down 1% at $52.32 versus a 52-week trading range of $41.21 to $58.52 and with it being above the 50-day and 200-day moving averages ($51.80 and $51.32 respectively), there appears to be no chart resistance all the way up to $54.00.  This could easily jump more than 2% Monday morning in a market-neutral position.

Terra Nitrogen Company, L.P. (NYSE: TNH) is effectively an MLP which distributes nitrogen fertilizer products to agricultural and industrial customers.  This has been partly rising in cheer for the sector as we described late Friday showing how much the sector components have rallied based upon the fallout over the Russian wheat export ban.  The company had earnings this last week but was also the top performer in the Ag-fertilizer group we track with a gain of over 17% this week and it has gone up for 8 consecutive days despite it going ex-dividend with a $2.36 dividend payout.  At $94.88, its 52-week range is $66.38 to 115.62.

Walt Disney Co. (NYSE: DIS) is on deck with its earnings Tuesday after the close.  It was covered in “Next Week’s Can’t Miss Earnings” right before the close on Friday.  At $35.00, its 52-week trading range is $24.89 to $37.98.  Media reports have been strong, so any Mickey Mouse problems would seem to be unexpected and would likely not be met with shareholder cheer in any way.

The last one to sneak in is an ETF being the SPDR Gold Shares (NYSE: GLD).  With gold going back over $1,200.00 on Friday over economic woes, our report at InvestorPlace.com caught massive options trading that was dwarfing the stock volume.  If the daily volatility around the ultimate flight to safety trade keeps up, you’ll see most of the action head to the way of the options and stock as traders look for “cheaper ways to speculate” than buying a $118 share price or than paying over $1,200.00 to hold an ounce of the shiny yellow stuff.

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JON C. OGG

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