A humorous look at the companies that caught our eye, for better or worse, this week.
Nike
NKE (NYSE)
Sep. 26, 2014 close: $89.50 (U.S.)
up $7.69 or 9.4% over week
Nike may not have a perfect track record when it comes to endorsing athletes (take Oscar Pistorius, Ray Rice and Adrian Peterson. Please.). But the company is apparently doing a lot of other things right: Helped by the FIFA World Cup, the athletic footwear and apparel giant’s first-quarter profit leaped 23 per cent to $962-million or $1.09 a share – blowing past the average analyst estimate of 88 cents. Goooaaaaaaal!
S&P/TSX composite
TSX
Sep. 26, 2014 close: 15,026.77
down 238.58 points or 1.6% over week
Investing quiz!
When markets are plunging, you should:
a) run to your mommy;
b) down a six-pack;
c) sell everything and invest in GICs.
Investors were doing all three this week as Canada’s benchmark index suffered its fourth consecutive weekly drop, hammered by energy and materials stocks. With demand for commodities softening in China and the U.S. poised to raise rates next year, those puny GIC yields are suddenly starting to look tempting.
Alibaba Group
BABA (NYSE)
Sep. 26, 2014 close: $90.46 (U.S.)
down $3.43 or 3.6% over week
Alibaba’s initial public offering may have made fortunes for insiders such as co-founder Jack Ma – now China’s richest man, with a net worth of about $25-billion. But folks who were late to the IPO party aren’t celebrating. After an initial buying frenzy, the Chinese e-commerce giant’s shares skidded as some investors cashed out for a quick profit. With the stock now trading at a rich 30 times expected 2015 cash flow, investors aren’t so gaga for Alibaba.
Valeant Pharmaceutical
VRX (TSX)
Sep. 26, 2014 close: $144.31
up $12.94 or 9.8% over week
Aging Hollywood stars aren’t the only ones who can’t get enough Botox. Valeant Pharmaceuticals is also eager to get its hands on the anti-wrinkle treatment, and its odds improved this week when the Montreal-based company said its third-quarter results, expected Oct. 20, will beat expectations. With Valeant now in a stronger position to acquire Botox maker Allergan, the only lines investors have are from smiling so much.
Merus Labs
MSL (TSX)
Sep. 26, 2014 close: $2.60
down 50¢ or 23.8% over week
True or false: When the CEO suddenly resigns “to pursue other opportunities,” it’s usually a very positive sign.
Answer: false.
Shares of Merus Labs plunged after the specialty pharmaceutical company announced the departure of Elie Farah, who will be replaced by Barry Fishman. “The transition to Barry as interim chief executive officer will be seamless,” the company promised. Except for investors, that is.