The Unusual Suspects (APOL, STD, BDX, BBY, BP, CTIC, FDX, NFLX, NLST, QCOR, ROSE, WEN, APEI, COCO, UPS)
This weekend’s edition of the UNUSUAL SUSPECTS is an unusual list indeed. We have many big issues to watch for the coming week. Our cast of characters in the UNUSUAL SUSPECTS includes Apollo Group Inc. (NASDAQ: APOL), Banco Santander SA (NYSE: STD), Becton Dickinson and Company (NYSE: BDX), Best Buy Co Inc. (NYSE: BBY), BP plc (NYSE: BP), Cell Therapeutics Inc. (NASDAQ: CTIC), FedEx Corp. (NYSE: FDX), Netflix, Inc. (NASDAQ: NFLX), Netlist, Inc. (NASDAQ: NLST), Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR), Rosetta Resources, Inc. (NASDAQ: ROSE), and Wendy’s/Arby’s Group, Inc. (NYSE: WEN).
We have provided detail on what to watch for, expected moves, and added color on each where applicable.
Apollo Group Inc. (NASDAQ: APOL) closed up 1.6% at $51.10, American Public Education Inc. (NASDAQ: APEI) closed up 2.9% at $47.48, and Corinthian Colleges Inc. (NASDAQ: COCO) closed up 2.5% at $11.93 all on positive sector development chatter. Reports were out Friday that there will be a delay to a pending government measure that would penalize schools for graduating students with high debt-to-income ratios. If that is the case, then these stocks could recover far more than 2% as a group.
Banco Santander SA (NYSE: STD) closed up 6.5% on Friday based on the notion that the bank’s CEO said at the annual meeting that he still expects to have a similar net profit for 2010 as it did in 2009 when it posted a profit of about 8.89 billion e[uros. This was a runner-up bank on our list of the year’s worst performing ADRs as we were looking for grossly oversold opportunities in Europe.
Becton Dickinson and Company (NYSE: BDX), a recently added Buffett holding, was given a positive article in Barron’s. The maker of syringes was noted as “Could Give Investors a Shot in the Arm” as it is poised for stronger growth than what estimates have factored in based upon innovative products. Barron’s said “The stock may jump 40%” and based upon a -0.1% day on Friday at $69.69 with a 52-week range of $63.41 to $80.56, this could be up about 4% or so on Monday if the market is healthy.
Best Buy Co Inc. (NYSE: BBY) is reporting earnings on Tuesday morning and Thomson Reuters sees estimates at $0.50 EPS and $10.94 billion in revenues. This is going to be one of the first companies giving us a real outlook (hopefully) on whether consumer spending in electronics is expected to hold up through summer and into later in 2010.
BP plc (NYSE: BP) is at it, again. It isn’t the one that got away, but the one that never goes away. Shares closed up again on Friday, but it is still hard to ignore those options trades this last week that showed options bets were being made for either a possible bankruptcy or an outright implosion beyond what has already been seen as its stock had been down by more than half. CEO Hayward is due to testify this week and we have Monday as the day the expected D-day… “Dividend Decision Day.”
Cell Therapeutics Inc. (NASDAQ: CTIC) already closed up big in percentages with a 24% gain to $0.45 Friday on above-normal trading volume, and this is a couple week’s after diluting shareholder value. Its exploratory analysis of trial data of Pixuvri in those with relapsed or refractory aggressive non-Hodgkin’s lymphoma was said to show that patients who experienced complete responses to the drug had a 63% chance of being alive at 24 months versus only a 20% chance in patients treated with other drugs. The speculative (and questionable for many) company also said that the study showed a 21% improvement in overall survival rates in other patients. With a $0.12 to $1.90 range of the last 52-week period, this has a chance for a trader-interest revival after the penny stock imploded earlier this year.
FedEx Corp. (NYSE: FDX) is due for earnings on Wednesday of the coming week. Thomson Reuters has estimates of $1.32 EPS on $9.04 billion in revenues. The company will have some currency exposures, but it will be interesting to see if it expects the recent economic woes in Europe to slow down some of its 2010 growth expectations. At $80.63, its 52-week range is $49.76 to $97.75. After just hiking its dividend, we think there is much more room for dividend hikes down the road as its yield is paltry compared to rival United Parcel Service, Inc. (NYSE: UPS).
Netflix, Inc. (NASDAQ: NFLX) closed at $120.69 on Friday after putting in a new 52-week high intra-day of $121.55 and it closed out the week with almost an $11.00 gain. The video rental subscribing service came in as the #1 pole position stock on the IBD 100 this weekend of stocks with bullish charts. IBD said that the video renter is expected to up its EPS 21% in Q2, which would be the lowest in about 10 quarters.
Netlist, Inc. (NASDAQ: NLST) may be back as a “Small-cap trader-go-to momentum player” after Friday’s news that its HyperCloud memory module was selected to run on Viglen servers for high-performance computing applications. Shares closed up 29% at $2.45 and shares rose more than 6% to $2.61 in the after-hours session on more than 100,000 extra shares traded. With a 52-week range of $0.30 to $7.98 and with shares having been so parabolic before, the ‘only’ 2.2 million shares on Friday could mean more buyers and sellers start their war next week based on the notion that many will have missed the news and move entirely.
Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR) was hit in the after-hours session on Friday and will of course be one to watch on Monday morning and beyond. The FDA extended out its date to approve the injectable drug Acthar for infantile spasms, which was listed as being to review the information on the labeling and potential post-approval commitments. This closed up only 0.1% at $10.19 on Friday, but shares fell a sharp 8.2% to $9.35 on over 115,000 shares in the after-hours session on Friday after the news broke.
Rosetta Resources, Inc. (NASDAQ: ROSE) already had a good week a week after Stifel Nicolaus raised its rating to BUY with a $35 Price Target. Now this weekend, Barron’s also said the stock looks like a Buy as the little driller “has inspired a gusher of optimism among some investors, as it drills in shale areas. One bull sees the stock doubling if its most important energy plays pan out.” At $25.23, it has already gained handily as the 52-week range for the independent oil and gas company is $7.08 to $26.48. With the notion of a double being hinted at, this could by up at least 4% or 5% on Monday in a market-neutral scenario and could conceivably open up at new 52-week highs.
Wendy’s/Arby’s Group, Inc. (NYSE: WEN) was one of our recent “stocks which could double” and one of the reasons was the potential for further sector consolidation. Shares closed up over 7% on Friday after Trian disclosed a verbal inquiry regarding a possible takeover of the combined fast food chains. While there is n clue about who or what Nelson Peltz is getting inquiries from or how he will work with them, Wend’s/Arby’s is now in the possible M&A targets. At $4.65, its 52-week range is $3.55 to $5.55.
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JON C. OGG