If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. Get those hands up, riders
Cedar Fair (NYSE: FUN ) is alone again, and that's a good thing. Apollo Global Management is terminating its buyout of the regional amusement park operator. Usually a stock craters when an acquirer bolts, but Cedar Fair units actually rose on the news.
Apollo's price of $11.50 per unit may have seemed like a reasonable 27% premium five months ago, but the economy has turned, and leisure companies are starting to shine again. Multiplexes and cruise lines are increasing prices, and this bodes well for the pricing power of theme park operators as the new operating season gets under way.
2. Stream on, Redbox
Coinstar's (Nasdaq: CSTR ) Redbox is starting to think outside of the box. The DVD rental company is reportedly surveying customers on the feasibility of a $3.95 a month subscription plan that would include four monthly overnight disc rentals and unlimited online streaming.
I have my doubts. A digital catalog isn't born in a day. It's taken Netflix (Nasdaq: NFLX ) three years to get to where it is today, and that involves striking a ton of licensing deals and playing nice with studios. The latter hasn't exactly been a Redbox strong suit. It also helps to have deals in place with makers of video game consoles, disc players, and DVRs to stream into living rooms with existing setups.
However, Coinstar wouldn't be floating this out there if it didn't think it was feasible at the suggested price -- which is less than half of Netflix's current plan that includes unlimited streaming.
Instead of being yet another company that is destined to go the way of the dodo bird when consumers ditch the optical disc, Redbox may have a future after all. Entering a growing market as a price leader with only one reasonable competitor is not too shabby an idea.
3. More kin than dull
Amazon.com's (Nasdaq: AMZN ) Kindle is hitting the road.
Tech blog Engadget is reporting that Target (NYSE: TGT ) will begin selling Amazon's e-book reader later this month. A tipster sent in a snapshot of the discounter's inventory PDA showing an entry for the $259 Kindle.
This is a great move by Amazon, with iPads, Nooks, and Sony Readers already on display at leading retailers. Amazon may have been able to woo tech-savvy bibliophiles to buy Kindles sight unseen, but the masses like to fidget with a device before buying in to new technology.
This will be a great ambassadorial move for Amazon, even if it's not a big seller at Target. In fact, it probably won't be a big seller at the popular discount department store. Target naturally charges state sales tax on purchases, while Amazon is able to skirt the need to automatically collect the tax in most states. Folks will mess with the display models at their local Target, only to buy them directly from the leading online retailer.
Well played, Amazon.
4. Pier pressure
You'll be taking a long walk if you're short Pier 1 Imports (NYSE: PIR ) . Shares of the home furnishings retailer soared 17% yesterday after the company posted strong holiday quarter results. Pier 1's adjusted profit for the fourth quarter clocked in at $0.32 a share.
Its new fiscal year is off to an even better start, with March comps climbing 19% higher. The holidays are a seasonally potent time for the chain, but analysts see the retailer earning $0.42 a share this new fiscal year.
The clincher here is that shares were trading as low as $0.10 apiece 13 months ago. Those lucky investors were able to snap up Pier 1 for an eye-popping P/E multiple of 0.2 based on this year's projected profit.
5. McMandarin
These may be nervous times to make a bet in China, but you have to like McDonald's (NYSE: MCD ) chances. The world's leading restaurant chain plans to nearly double the number of burger joints in China to 2,000 over the next four years.
Is the Chinese government restrictive? Yes. Are foreign companies taking big risks by investing in the mercurial nation? Of course. You want some fries with that, though? The world's most populous nation is growing briskly, and with the boost in disposable income comes the desire to eat out more often.
McDonald's wants to make sure that it's on the right side of the Great Wall.
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