Footwear was last week's best-performing industry -- though "best performing" is a relative term, given the market's ongoing slump.
Crocs (Nasdaq: CROX ) was actually one of the top 10 performers in the sector last week, but it still lost 4.6% for the five-day period. That's not surprising; the fad shoemaker reported earnings last month that hinted at disappointing results for the rest of the year, plus possible financial logjams. With little thaw in the credit markets despite the ballyhoo over a Wall Street bailout, liquidity could be hurting a number of players.
K-Swiss (Nasdaq: KSWS ) was actually the biggest loss leader among footwear companies. Shares tumbled more than 12% for the week, even though the still-struggling sneaker maker received a $30 million payout from the operator of Payless Shoes for a trademark lawsuit settlement.
Nike (NYSE: NKE ) fared far better, as its shares rebounded from a 6% deficit on Wednesday to end the week 6% higher. Its earnings report showed profits up 10% year over year, and revenue that surged 17%. Investors are undoubtedly drooling over Nike's 9% increase in future orders.
Nike sneakers were front and center for the Beijing Olympics, which helped account for the company's 36% increase in Asian sales to $860 million. Look for Nike to continue kicking the competition to the curb in the coming quarters. CAPS member swat253 thinks the Swoosh's extensive marketing campaigns will support that growth: "Deal with Umbro (soccer goods) and heavy marketing of Nike+ sport kits and Nike+ events will boost product sales."
Here are the five best-performing industries of the past week, followed by the five worst.
|
The Hotties
|
% Chg
|
|
Footwear
|
4.99%
|
|
Software
|
3.49%
|
|
Aerospace & Defense
|
2.44%
|
|
Electricity
|
1.52%
|
|
Personal Products
|
1.30%
|
|
The Notties
|
% Chg
|
|
Iron & Steel
|
(15.61%)
|
|
Coal
|
(15.03%)
|
|
Industrial Metals & Mining
|
(14.32%)
|
|
Non-Ferrous Metals
|
(13.66%)
|
|
Heavy Construction
|
(13.31%)
|
Source: BigCharts.com.
When you're hot, you're hot
Investors might expect certain personal-care product companies to perform well during economic uncertainty. Consumer staples are often considered recession-resistant, since people need to eat, drink, keep clean, and fulfill life's other mundane requirements. In the personal-care sector, both Colgate-Palmolive (NYSE: CL ) and Avon Products (NYSE: AVP ) performed well last week.
CAPS member ororus suggests Colgate, one of the top toothpaste makers, will benefit from rising standards of living: "As the world continues to industrialize, Colgate will be there to reap the benefits. China should be a big market for them in the future."
In fact, both Colgate and Avon have significant foreign presences, which has helped them during our current domestic downturn. Colgate generates more than 80% of its revenue outside North America, while Avon realized three-quarters of its sales internationally. Still, some analysts believe that the decline in commodity prices and oil will no longer work to their benefit.
When you're not, you're not
Obviously, the condition of the financial markets remains key to the success or failure of many industries these days. Witness the Iron & Steel sector, the week's biggest loser. Allegheny Technologies (NYSE: ATI ) led the way down, as fears that the Wall Street bailout would take longer than expected -- or worse, not happen at all -- drove investors' fears that borrowing costs would surge, causing the economy to slow.
That was apparently too much to overcome the relatively strong earnings report released by Chinese steel finishing fabricator Sutor Technology (Nasdaq: SUTR ) , which noted rising revenue and profits.
With a bailout in the works, though, CAPS member mflongterm may prove that Allegheny Technologies' strong returns on capital make it an ideal long-term play:
This company is sustaining high EPS growth, in addition to increased ROIC. There is some debt here but manageable. I believe this stock is currently selling at a bargain, as the future growth prospects look strong for this company.
Hot or not?
Cyclical industries can enjoy lengthy stretches in the sun, or long, depressing months under dark clouds. For a good idea of where in that cycle they might be now, start your research on these companies in Motley Fool CAPS. Read financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Then let us know ... are they hot or not?
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