Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.
Stock number one is:
FedEx Corp., (SYMBOL: FDX) and the headline says:
FDX Announces Dividend Increase, and Earlier Retirement of Aircraft – Morgan Stanley
FedEx Corp. announced it would accelerate retirement of aircraft and engines, resulting in impairment charges in 2013 and '14. The company also increased its dividend.
Earnings are expected to fall 8% this year. Despite the unexpected 2014 impairment charges, earnings are expected to rise 21% next year. The PE is 16. Morgan Stanley calls FedEx shares “a cheap option on a cyclical rebound” and maintains an Overweight rating on the stock.
FedEx stock broke out of a three-year trading range in January, rose to $109, and is now trading sideways between $92 and $109.
Our Ransom Note trendline says: ACCUMULATE FEDEX SHARES BELOW $98.
Stock number two is:
Zynga Inc., (SYMBOL: ZNGA) and the headline says:
Zynga Cuts 520 Jobs, Closes Offices as Games Underperform -- Bloomberg
Online gamemaker Zynga announced that it will cut 18% of its workforce, saving about $80 million annually, and close offices in New York, L.A. and Dallas. Several of its games are underperforming, although Farmville continues to do well. Zynga’s tally of 253 million monthly active users was down 13% in the first quarter.
The company is not expected to earn a profit until at least 2015.
The stock price crashed shortly after its ipo in December 2011, and is currently in a sideways trading pattern.