This Week's 5 Smartest Stock Moves

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. Head like a Whole
Premium organics are back. Whole Foods Market (Nasdaq: WFMI  ) posted impressive quarterly results this week. Revenue climbed 15%, fueled by an 8.4% spike in store-level comps. Earnings nearly doubled, soaring 88% to prove the upscale grocer's model can deliver widening margins in good times.

Analysts weren't overly impressed with the chain's top-line outlook -- 12% for this fiscal year and 10%-13% next year -- but it's hard to scoff at double-digit gains.

There are plenty of retailers posting impressive comps lately, but many of them are simply stacked up against the low-lying fruit of abysmal results in each of the two previous years. That's not Whole Foods. Comps during last year's fiscal third quarter slipped a mere 2.5%, essentially offsetting the 2.6% store-level uptick a year earlier. In other words, Whole Foods isn't simply back to where it was before the recession hit most premium retailers. It has already turned around and is running in the right direction.

2. Ugly shoes are back
Shares of Crocs (Nasdaq: CROX  ) are trading higher today, after the maker of cozy yet arguably unfashionable footwear posted better-than-expected results.

Yes, Crocs.

A lot of smart people -- including many of my fellow Fools -- often bring up the Crocs fad as a cautionary tale of tempering enthusiasm when it comes to hot trends. What if this wasn't a fad after all? Revenue climbed 31% over last year's adjusted showing. Earnings of $0.37 a share reversed a year-ago loss and clocked in well ahead of the $0.22 a share that Mr. Market was expecting.

A year ago, a 31% spike in Asian sales helped partly offset domestic and European weakness. Now, Crocs is climbing on all three fronts with double-digit gains in Asia and the Americas and a 7% uptick in Europe.

Crocs has a cash-rich and debt-free balance sheet, so it's not going anywhere anytime soon. The next time you compare Crocs to pet rocks, Milli Vanilli, or Beanie Babies, you may want to update your fad choices.

3. Sirius is no dog star
Sirius XM Radio (Nasdaq: SIRI  ) is still rocking. The country's only satellite radio provider posted its fourth consecutive profitable quarter, boosting its revenue and free cash flow projections for all of 2010.

The stock climbed higher on the news, even though the shares were hammered during the previous two quarters after posting similarly upbeat results.

I called it.

The day before they were announced, I offered up three reasons why Sirius XM's stock would trade higher on earnings news. Improving fundamentals and widening short positions were two reasons I singled out, but perhaps the most important one was that the stock hadn't run up ahead of the quarterly call the way it had during the two previous quarters.

Performance and expectations go hand in hand, and this time Sirius XM was able to rock the skeptics.

4. Playing with a loaded STEC
STEC (Nasdaq: STEC  ) posted better-than-expected quarterly results Tuesday. The solid-state storage specialist posted a profit of $0.06 a share, well ahead of analysts, who were settling for breakeven results. Revenue also clocked in ahead of Wall Street targets.

STEC's results provided strong sequential boosts, a far cry from the previous quarter when EMC (NYSE: EMC  ) -- its largest customer -- held back on orders.

Executives were curt on the subject this time around. Analysts were advised not to ask customer-specific questions -- and the only time EMC came up was when STEC's CEO noted that "the inventory carryover situation at our largest customer was resolved" during the quarter.

Fellow Fool Anders Bylund feels that the company may be hiding something, preferring a little more transparency out of STEC.

I'm not concerned. In fact, the company is telling investors everything they need to know -- about EMC and its data storage business in general -- by announcing third-quarter guidance that implies another huge sequential step up on the top and bottom lines.

Connect the dots -- and prosper.

5. Hire and higher in China
Chinese job listings giant 51job (Nasdaq: JOBS  ) got the job done last night. Revenue rose 36%, with earnings more than doubling to $0.29 a share -- or $0.33 a share on an adjusted basis.

51job's performance was fueled by a 74% surge in its online recruitment services, which now account for slightly more than half of its revenue mix. However, even the company's original print advertising business inched higher during the quarter -- despite the fact that the number of city-specific publications put out weekly has shrunk from 22 to 17 over the past year.

And, yes, even cranking out job listings can be a high-margin affair in China. This is 51job's second consecutive quarter of delivering net profit margins in excess of 20%. Compare that to stateside leader Monster Worldwide (NYSE: MWW  ) -- which has a foothold in China through ChinaHR.com -- which delivered microscopic net margins given its breakeven results on an adjusted basis during the same quarter.

Some resumes just look better than others.

Whole Foods Market is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services, free for 30 days.

Longtime Fool contributor Rick Munarriz is an optimist at every turn. Hdoes not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1261555, ~/Articles/ArticleHandler.aspx, 10/24/2014 3:05:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement