Stocks in the News

Posted: Aug 07, 2013 12:01 AM

Stock number one is: 

General Motors Company, (SYMBOL: GM) and the headline says: GM Cuts Chevy Volt Price by $5,000 to Spur Sales – Bloomberg

General Motors announced today that it will cut the price on the 2014 Chevy Volt by $5000, in order to encourage sales of the electric hybrid.  Federal tax credits bring the total purchase price down another $7500, to a final cost of $27,500.  While year-to-date sales of electric vehicles in the U.S. have more than doubled, Volt sales experienced only a 9% increase this year.

GM’s earnings growth projections have recently increased to 5% this year, then 34% next year.  The PE is 11.

In early May, we said the stock appeared ready to rise into the low-to-mid $30’s.  That happened immediately, and now the stock is pushing up against resistance at $38.  We still like Ford shares better, because the company is thriving without government assistance.

Our Ransom Note trendline says:  HOLD GENERAL MOTORS.

GM Chart

GM data by YCharts

Stock number two is: 

OfficeMax Inc., (SYMBOL: OMX) and the headline says: OfficeMax Reports Earnings Miss on Sales and Margin Deterioration – Citi Research

OfficeMax reported another disappointing quarter, with earnings and margins below expectations, and revenue down 4.6% year-over-year.  Citi Research says there’s increased competitive pressure, and a lack of catalysts for OfficeMax achieving their operating margin goals.

Full-year 2013 earnings are projected to fall 27%.

On May 7, we told listeners to avoid OfficeMax shares.  The company is currently awaiting regulatory approval for acquisition by Office Depot, another company with profitability problems.  We see no reason to own shares in struggling companies.

Our Ransom Note trendline says..... SELL OFFICEMAX.

OMX Chart

OMX data by YCharts

Stock number three is:

Michael Kors Holdings Ltd. , (SYMBOL: KORS ) and the headline says: Hitting on all Cylinders – Citi Research

Upscale accessories maker Michael Kors Holdings reported first quarter earnings of 61 cents per share, blowing away analysts’ estimates of 49 cents, and exceeding expectations for revenue, gross margins, expenses and inventory control.  Growing brand awareness and new store openings led to a 144% increase in European sales this quarter.

The company raised full year estimates to reflect 36% year-over-year earnings growth.  The PE is 27.

Morgan Stanley Research says, “KORS remains Retail’s best growth story.”  Michael Kors stock has been climbing and resting steadily since going public in late 2011.  The stock is up 9% since we recommended it in late May, and the share price is on an uptrend.

Our Ransom Note trendline says....  BUY MICHAEL KORS HOLDINGS.

KORS Chart

KORS 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.