EMC Gets Squared Away

John Ransom | July 23, 2014 2:30 PM

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.

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