Stocks in the News

Crista Huff
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Posted: Aug 23, 2013 12:01 AM
Stocks in the News

Stock number one is: 

Sears Holding Corp., (SYMBOL: SHLD) and the headline says: Sears quarterly net loss widens on tepid sales -- Reuters

Sears shares are bouncing at nine-year lows, as bad news continues to surprise investors, driving the share price lower each time.  The company announced a large quarterly loss … again.  But the magical thinking plays on, as shareholders are apparently determined to go down with the ship.

Second quarter sales were down 6%, including appliance sales, which were strong at competitors Home Depot and Lowe’s.  Second quarter losses came in much bigger than expected, with third quarter loss projections increasing.  Credit Suisse remarked, “Sears remains on a dangerous downward spiral.”

Sears’ shares are down 21% since the last quarterly report, when we emphatically told investors to sell.  We reiterate: Shareholders who expect their Sears investments to grow are out of their minds.  Sears is not "too big to fail".

Our Ransom Note trendline says:  SELL SEARS.

SHLD Chart

SHLD data by YCharts

Stock number two is: 

Bank of America Corp., (SYMBOL: BAC) and the headline says: Bank of America Works Intern to Death… Literally -- MEDIAite

A pre-graduate student at the London branch of Bank of America Merrill Lynch has died after working exhaustive hours during his seven-week internship.  “He apparently pulled eight all-nighters in two weeks,” another intern said.  The company has expressed its condolences to the family.

BofA’s finances are finally emerging from the carnage of the 2008 Financial Meltdown.  Earnings per share are expected to grow 268% this year, with continued aggressive growth thereafter.  The PE is 16.

The share price is up 13% since we recommended it on July 3.  The stock is currently trading between $14 - $15, with a bullish chart.  Investors should expect volatility.

Our Ransom Note trendline says..... BUY BANK OF AMERICA.

BAC Chart

BAC data by YCharts

Stock number three is:

Hewlett-Packard Co., (SYMBOL:  HPQ) and the headline says: Turnaround Story Intact, But Some Bumps on the Road – Citi Research

Personal computer-maker Hewlett-Packard reported lower year-over-year third quarter results today, largely in-line with expectations, and with surprisingly good numbers on free cash flow.  However, the market chose to focus on declining enterprise hardware sales, and the stock fell dramatically.

HP’s full-year earnings guidance remains unchanged, projected to fall 12% this year, followed by two flattish years.  The PE is 6.2 and the dividend yield is 2.6%.

The stock is volatile, and likely to trade between $22 and $28 for the rest of the year.  With an extremely low valuation, a wide trading range, and the stock at support levels, traders should jump in here.

Our Ransom Note trendline says....  BUY HEWLETT-PACKARD.

HPQ Chart

HPQ data by YCharts

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.