Stocks in the News

Posted: Aug 24, 2013 12:01 AM

Stock number one is: 

Microsoft Corp., (SYMBOL: MSFT) and the headline says: Microsoft CEO Ballmer to Retire Within Next 12 Months-- Bloomberg

After streamlining the company, but lacking visionary leadership, Microsoft CEO Steve Ballmer announced today that he will retire within 12 months.  The company “has struggled to adapt to the shift away from personal computers and toward mobile devices,” reports Bloomberg.  Citi Research says that if the new CEO decides to focus on enterprise, and de-invest from consumer, the stock is worth $42, and could pay a bigger dividend.

Earnings projections have improved since our last report, to 4% growth this year, then 9-10% growth in each of the next two years.  The dividend yield is 2.65%, and may increase again in September.

The stock traded sideways during Ballmer’s ten-year tenure as CEO, currently in a range  between $31 and $36, with serious resistance at $36.

Our Ransom Note trendline says:  HOLD MICROSOFT.

MSFT Chart

MSFT data by YCharts

Stock number two is: 

Aeropostale Inc., (SYMBOL: ARO and the headline says: New Fashion Not Turning the Tide – Morgan Stanley

After reporting second quarter comparable store sales down 15%, Aeropostale will take a large net loss for the full year, unexpectedly challenging its cash position and causing analysts and investors to re-think their investments.  Despite attempts to strengthen its apparel mix, sales continue to suffer.  Morgan Stanley calls Aeropostale “a structurally challenged business.”

The stock is down 36% since we told listeners to sell Aeropostale shares on March 15; and it’s hitting ten-year lows today. 

Our Ransom Note trendline says..... SELL AEROPOSTALE. 

ARO Chart

ARO data by YCharts

Stock number three is:

Pandora Media Inc., (SYMBOL: P) and the headline says: Keep Calm and Stream On – Morgan Stanley

Pandora Media shares fell to support levels today as mixed news shook up Wall Street.  The company reported better-than-expected second quarter earnings, with large increases in revenue, market share, number of active users, and listener hours.  But it also announced increased expenses, and a plan to cancel its recently-implemented 40-hour-per-month limit on free Mobile listening, shaking Wall Street’s confidence in Pandora’s marketing strategy.

After a string of annual net losses, Pandora is expected to earn a small profit this year, rising rapidly in the next several years.

On July 1, we told aggressive growth investors to buy Pandora shares, and to expect volatility.  The stock then rose 15% through yesterday and lost all its gains today.  Watch for the stock to trade between $19 and $22 in the near-term.

Our Ransom Note trendline says....  BUY PANDORA MEDIA.

P Chart

P 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. 

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