Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines.
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Stock number one: Herbalife Ltd.
Wall Street rejects Ackman's Herbalife 'death blow'—Reuters
Billionaire investor William Ackman's latest volley of accusations against Herbalife fell flat on Wall Street on Tuesday, with shares in the nutrition company soaring more than 17 percent. Ackman, whose hedge fund Pershing Square Capital Management placed a $1 billion bet that Herbalife will go bust under regulatory scrutiny, told a conference of investors in New York that the firm's recruiting methods violate U.S. labor laws by employing drinks makers and babysitters without pay.
Symbol: HLF
Trailing PE: 14; Forward PE: 9
PEG: 0.50
Dividend: NA
Estimate Trend: Flat
Ransom Note Trendline: Avoid HerbaLife
Stock number two: EMC Corporation
Why EMC (EMC) Stock Is Up Today--The Street.com
EMC(EMC_) continued to climb Tuesday after Elliott Management took a $1 billion stake in the data storage company.
Elliott now holds approximately 2% of EMC's $55 billion, which makes the hedge fund the fifth-largest shareholder in the company. Elliott wants EMC to spin off VMWare(VMW_), in which EMC owns an approximately 80% stake. Elliott believes this move would boost EMC's stock.
Symbol: EMC
Trailing PE: 23; Forward PE: 13
PEG: 1.36
Dividend: 1.70%
Estimate Trend: Up
Ransom Note Trendline: Buy EMC
Stock number three: Netflix, Inc
Netflix Sinks 5%; Another Analyst Skeptical On Value--Benzinga
Netflix Inc. (NASDAQ: NFLX) was down more than 5 percent Tuesday while another analyst expressed skepticism on the shares' value. Citibank's Mark May maintained a Neutral rating on the stock and said its valuation "reflects the positive thesis surrounding U.S. and international subscriber potential and pricing power."
Symbol: NFLX
Trailing PE: 160; Forward PE: 63
PEG: 3.17
Dividend: NA
Estimate Trend: Up
Ransom Note Trendline: Avoid Netflix