The market bounced back in a major way last week, with the Nasdaq Composite leading the way with a 3.8% surge.
It was obviously a solid week. Heck, compared with historical averages 3.8% would be a market-thumping return for an entire quarter!
Let's take a closer look at five of this past week's biggest scorchers.
|
Company
|
March 25
|
Weekly Gain
|
My Watchlist
|
| drugstore.com (Nasdaq: DSCM ) |
$3.89
|
120%
|
Add
|
| Body Central (Nasdaq: BODY ) |
$23.20
|
38%
|
Add
|
| Charming Shoppes (Nasdaq: CHRS ) |
$3.98
|
33%
|
Add
|
| Travelzoo (Nasdaq: TZOO ) |
$60.94
|
32%
|
Add
|
| Rediff.com (Nasdaq: REDF ) |
$7.09
|
31%
|
Add
|
Source: Barron's.
Shares of drugstore.com more than doubled after Walgreen (NYSE: WAG ) swooped in to acquire the largely profitless online retailer.
It's surprising to see drugstore.com trading for more than the pharmacy chain's cash bid of $3.80 a share. Do investors really think that a rival bidder is going to step in or that Walgreen is going to have to sweeten its offer to get the deal done? Walgreen's offer was for a whopping 113% premium. A higher offer for a company that has missed Wall Street's profit targets in three of last year's four quarters seems highly unlikely.
Body Central delivered bears a body blow after following up a decent quarterly report on Thursday with spectacular guidance for fiscal 2011. It was a strong holiday quarter for the Body Central and Body Shop apparel chains, with comps soaring 14.9%. The real gem here is the 209-store chain's projections of earnings per share clocking in between $1.08 and $1.12 on $286 million to $292 million in revenue. Analysts were only targeting a profit of $0.96 a share on $284 million in revenue.
Plus-sized retailer Charming Shoppes may have posted a plus-sized deficit in its latest quarter, but the Lane Bryant parent won over investors by posting better than expected sales. The market also likes the retailer's turnaround chances after announcing that it would close about 240 of its unprofitable stores and made its acting CEO its permanent leader.
Travelzoo took off after ThinkEquity analyst Atul Bagga raised his price and profit targets on the travel deals publisher. Shares of Travelzoo have soared fivefold since bottoming out this past summer, fueled by strong quarterly performances and investors flocking to Internet companies embracing Groupon's group-buying model.
Rediff rallied along with Indian equities. I remain skeptical about the India-centric online portal. It attracts speculators as the only stand-alone dot-com play in India outside of the more successful MakeMyTrip (Nasdaq: MMYT ) , but Rediff is a small player in the world's second most populous nation. It's hard to get too excited about a company generating roughly $2 million in profitless revenue a month. I'll become a believer when I see healthy profitable growth.
It was a great week for these five stocks. Now let's see if they're up for an encore.
Which of these five stocks do you think will continue to move higher? Share your thoughts in the comment box below.
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