Signet Goes on Jewlery Spree

John Ransom | February 20, 2014 12:41 PM

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

Stock number one: Zale Corporation

Signet Jewelers To Acquire Zale Corp.--Forbes

Signet Jewelers, the largest specialty retail jeweler in the US and the UK, and Zale Corp., a leading fine jewelry retailer in North America, said Wednesday that they have entered into a definitive agreement for Signet to acquire all of the stock of Zale for $21 per share in cash.

The deal is estimated to have an enterprise value of $1.4 billion (which includes stock price and debt) and is 41% over Zale’s closing price on February 18, according to a joint statement issued Wednesday morning.

Symbol: ZLC

Trailing PE -; Forward PE: -

PEG: -

Dividend: -

Estimate Trend: Up

Ransom Note Trendline: Sell Zale Corporation

ZLC data by YCharts

Stock number two: SM Energy Company

Why SM Energy (SM) Was Downgraded - The Street.com

SM Energy (SM_) was downgraded to "hold" from "buy"" by KeyBlanc Wednesday. SM Energy fell 18.6% to $72.94 in morning trading. The firm removed its price target for the oil and gas company, which was previously set at $108. The downgrade is largely due to the company's lower crude production.

"Year-end 2013 proved reserve bookings were strong, with total reserves up 46% and PV-10 totaling $5.5 billion, which increased our 1P estimate by $15/share to $51/share," analyst Jack N. Aydin said.

"However, the Company's Eagle Ford EURs were largely revised lower despite incorporating longer lateral lengths, which increased the average well cost, while the EUR oil mix generally declined across its acreage."

Shares of Garmin (GRMN), which manufactures global positioning systems, are advancing after the company reported fourth quarter results that easily surpassed expectations and offered a better than expected fiscal 2014 revenue outlook. WHAT'S NEW: This morning, Garmin reported Q4 adjusted earnings per share of 76c and revenue of $759.7M, compared to expectations of 62c and $712.78M, respectively. The midpoint of the company's FY14 profit view was in-line with estimates. However, Garmin's FY14 revenue forecast of $2.6B-$2.7B surpassed the consensus forecast of $2.58B.

Symbol: GRMN

Trailing PE: 17; Forward PE: 20

PEG: 2.64

Dividend: 4.0%

Estimate Trend: Up

Ransom Note Trendline: Buy on pullback under 50