Luxury Brands Doing Great in Europe

John Ransom | February 05, 2014 11:05 AM

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:

Stock number one: Michael Kors Holdings Limited

Michael Kors continues to outshine luxury rivals- FT.com

Michael Kors raised its full-year sales and profit forecasts as it reported a 144 per cent rise in European third-quarter sales, confirming that the retailer’s assault on the continent’s luxury market continued unabated. The better-than-expected results sent the company’s share price up almost 21 per cent in early trading on Tuesday, as Wall Street reacted to the growth recorded across Michael Kors’ retail, wholesale and licensing segments, as well as international markets.

Symbol: KORS

Trailing PE 37; Forward PE: 26

PEG: 1.13

Dividend: NA

Estimate Trend: UP

Ransom Note Trendline: Buy on Pullback to $85

KORS data by YCharts

Stock number two: Yum! Brands, Inc.

Yum! Brands rises after reaffirming profit growth outlook- Fly on the Wall

Shares of Yum! Brands (YUM), which owns the KFC, Taco Bell and Pizza Hut restaurant concepts, are rising after the company reported mixed fourth quarter results, but reaffirmed its fiscal 2014 profit growth view of at least 20%. WHAT'S NEW: Last night, Yum! Brands reported fourth quarter adjusted earnings per share of 86c and revenue of $4.18B, compared to expectations of 80c and $4.26B, respectively. The company reported same store sales in its China division fell 4%, while U.S. SSS fell 2%.

Symbol: VIP

Zynga (NASDAQ: ZNGA) is in trouble. Five years ago, as it rode the Facebook wave, the Silicon Valley gaming outfit was all the rage, but things are so very different now. On Thursday, it laid off 15 percent of its staff. But at the same time, in an effort to save its bacon, the company made a big bet on the future. It paid $527 million for a new technology that might just give it an edge on mobile devices, an area where Zynga hasn't traditionally fared that well. It acquired NaturalMotion, a U.K. company best known for doing the background animation for the video games such as Grand Theft Auto and Max Payne.

Symbol: ZNGA

Trailing PE: NA; Forward PE: 120

PEG: NA

Dividend: NA

Estimate Trend: Up

Ransom Note Trendline: Sell Zynga