Mr. Sensitive

May 3, 2013

FSX Friday Update

Filed under: Uncategorized — lbej @ 17:45

I totally forgot to watch the release of the employment numbers this morning, and do you know why?  I was busy cleaning bathrooms.  I was afraid Mr. Market would put me in time-out for putting bleach ahead of business.  Luckily for me, he was too busy driving the Dow Industrials and S&P 500 to new all-time highs on the back of payroll numbers that weren’t as bad as was feared.  The official consensus projection was for an increase of 150,000 jobs, but the market was expecting an even lower number (for perspective, +250K per month is considered healthy).  When we got 165,000 and an upward revision of 114,000 for the prior two months, it was off to the races.  The Dow and S&P topped 15,000 and 1600, respectively, for the first time, and the Nasdaq rose to a 12-year high.  What’s the bottom line?  Good things happen when you put bleach first.

The Family Stock Index managed to eke out a new all-time high Friday morning before Zero and I dragged it back down.  The FSX gained 1.3% on the week to close at 15,505, and advancers outnumbered decliners more than 2-to-1.    Nevertheless, there are clear signs that the rally may be topping out, as only three FSX members made new 52-week highs (Reagan, Charlotte, Mario TY) even as the index itself set a fresh record.  The broad participation we witnessed last week just isn’t there, and I continue to believe that there’s only so much that Reagan can do to push us higher (three years of evidence to the contrary notwithstanding).

Advancers

  • Reagan (REGN) +23%.  This is getting pretty ridiculous.  Reagan is now up 56% in 2013, having gained 208% in 2012 and 67% in 2011.  This week she added nearly $50 when rival eye-drug maker Allergan reported disappointing clinical trial results.  Reagan wants to beat everyone at everything; she would appreciate that her latest all-time high came at the expense of a company foolish enough to challenge her.
  • Charlotte (ICE) +7.8%.  Charlotte is doing the best she can to balance the depredations of Zero, and the effort is certainly appreciated.  She’s having a spectacular year—up nearly 40% in four months—and this week’s move contributed more than 50 points to the FSX.  Was it enough?  Not even close.
  • Nicole E. (NICE) +5.3%.  The market is counting on Justin to secure and retrieve the Brinky Bowl when he visits the Pfaff this weekend.  Expect a selloff on Monday; not only will Justin fail to take the Brinky Bowl, he’ll almost certainly leave one or more of his belongings here.
  • Ghost Marisa (MOLXA) +4.6%.  I’m pretty sure Marisa is haunting the southeast corner of Brinky’s room.  If she’s half as excited about her accommodations as Brinky’s laughter indicates, the stock could have a lot more room to run.
  • Zondro (ZQK) +3.7%.  Zondy gets to play with Justy!
  • Mario TY (MAR) +3.5%.  Is the market clamoring for Mario to come out of the FSX bullpen in relief again?  If the chants get loud enough, I may have to step aside for a week sometime in the next month or so.

Decliners

  • Icarus (FAST) -3.3%.  Icky doesn’t get to play with Zondy or Justy.
  • Lee (TGI) -10.5%.  Ugh.  Investors are coming to terms with what I realized more than a month ago—I have no idea what to do with my book now that it’s all but finished.  After this week’s drop, that uncertainty is priced in.  But I also have no idea what to do with myself now that my book is all but finished, and I’m afraid that isn’t reflected in the stock.  Yikes.
  • Zero (ZAGG) -27%.  Zero now has an excellent chance of finishing at the bottom of the FSX standings for the third consecutive year with a third different stock, a Bizarro feat no less impressive than what Reagan has accomplished over the same period.  He’s found a most able squire to aid in his quest in the form of Zagg CEO Randy Hales.   Management guided analyst expectations up in the last quarter only to deliver a shockingly bad report yesterday.  Analysts were expecting EPS of $0.21; ZAGG reported $0.11, a decline of 35% versus the prior year quarter and slightly more than half the expected number.  If you think that’s bad, just wait.  Earnings per share can be impacted (read: manipulated) by a number of things, including share buybacks, accounting reclassifications, and even simple rounding.  Revenue, on the other hand, can be manipulated through accounting tricks (is there anything in business that can’t be?), but usually only temporarily through delayed or accelerated revenue recognition.  In general, revenue is what it is, and Zagg reported revenue in the quarter of $51.5 million, 7.2% below the prior year quarter and an unbelievable 23% less than the $66.57 million median analyst estimate.  I don’t like the overuse of the words unbelievable and incredible, but in this case, it’s actually hard for me to believe that management could be this clueless about sales trends in their business, and they certainly have no credibility going forward.  The stock was halted after hours as market makers tried to bridge the enormous gap between bid and ask prices; when it opened for trading it plunged 25% immediately.  It looks for all the world like Zero has done it again.
Name Ticker 5/3/2013 Change
Brinkley BCO $26.44 -0.02
Charlotte ICE $172.02 +12.51
Dustin DST $69.36 +0.83
Ghost Marisa MOLXA $23.88 +1.04
Icarus FAST $47.86 -1.61
Jenny JNY $13.58 -0.49
Jodi Ann JOY $57.63 +1.03
Justin SCI $16.74 +0.28
Katie CATY $19.77 +0.32
Lee TGI $71.39 -8.41
Lisa LNCE $25.37 +0.61
Lucas LEI $1.30 +0.03
Lulu LULU $76.36 +2.22
Marcus MCS $13.02 +0.32
Mario T.E. MGEE $55.49 +0.15
Mario T.Y. MAR $43.01 +1.44
Namilita NL $11.41 +0.22
Nicole E. NICE $36.05 +1.82
Nicole M. COLM $60.25 +1.33
Reagan REGN $266.16 +49.56
Ruby RJET $11.34 -0.04
Wilson WILC $6.84 -0.03
Winston ED $63.66 +0.82
Zero ZAGG $5.00 -1.83
Zondro ZQK $6.71 +0.24
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