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. Disc oh
The optical disc is alive and well with couch potatoes. Coinstar's (Nasdaq: CSTR  ) Redbox revealed this week that it has now rented out 2 billion discs.

Redbox celebrated the milestone by offering free DVD rentals. If you're only finding out about this now, my apologies. The promo code for the free nightly rental was only good for yesterday. However, it just goes to show that a company can grow in an ugly sector.

It took six years for Redbox to rent out its first billion DVDs, Blu-rays, and video games. It squeezed out its second billion in just 18 months.

2. Go, go, grocer
Things are going well at the high end of the supermarket space.

Upscale grocer The Fresh Market (Nasdaq: TFM  ) posted strong quarterly results this week. Net sales and adjusted earnings climbed 16% and 26%, respectively. The Fresh Market's 7% increase in same-store sales is the supermarket chain's strongest showing in five years.

The Fresh Market may have much smaller stores than its rivals, but its smaller footprint helps it deliver retro charm with its premium offerings. The result is that The Fresh Market's margins are ridiculously good. The chain's margins during the holiday quarter clocked in at 5.7%, well above the bottom-line success found at larger supermarket operators.

3. Stevia nicks
The flavors are coming at SodaStream (Nasdaq: SODA  ) -- and a new sweetener to boot.

SodaStream is turning to stevia, an all-natural plant-based sweetener, to fuel a dozen new syrups that will pack no more than five calories a serving. Some of the more exotic flavors outside of the obvious diet cola and lemon-lime offerings are peach-pear and cranberry-apple.

Offering a wide variety of flavors is important, and it only helps when some of them are way off the beaten path. I don't think you'll find SodaStream competing against bottled varieties of peach-pear soda. Giving dieters an all-natural sweetening solution will also help it attract new users.

4. One Giant step
Online gaming remains a hot industry in China.

Giant Interactive (NYSE: GA  ) is the latest player in this booming space to post strong quarterly results. The company behind the ZT Online franchise saw its revenue climb 34% during the final three months of 2011, propelled by a 28% increase in active paying users but also the fact that the average gamer is paying more.

Giant's quarterly profit of $0.17 a share was in line with expectations.

Investors willing to take on the risks inherent with buying into China's economy may want to eye the attractive valuations available in this niche. Nearly all of the publicly traded players in this space are fetching forward earnings multiples in the single digits. There is certainly the fear that a worrisome government may restrict online usage, but the Internet revolution has come too far to go down quietly.

5. Blenders on benders
America's slurping smoothies.

Jamba Juice parent Jamba (Nasdaq: JMBA  ) posted mixed quarterly results this week. The leading smoothie chain operator saw its revenue inch higher, even though it's been handing over some of its company-owned stores to franchisees. Analysts were braced for revenue to decline, but it's hard to shrink when company-owned stores come through with a 7.7% surge.

This is the fifth consecutive quarter for positive comps at company-owned stores, and that's important since we're now stacking positive store-level sales on top of positive comps. Jamba sees comps climbing 4% to 6%, so the healthy store-level performance will continue to bear fruit.

Jamba's expanding menu is helping. The company revealed during its call that 22% of its smoothie purchases are now accompanied by the sale of other menu items.

Nice blend, Jamba.

Keep it coming
If you want to make some smart stock moves yourself, find out Motley Fool's top stock for 2012. It's a free report, but only for a limited time, so check it out now.

Motley Fool newsletter services have recommended buying shares of SodaStream International, Coinstar, and The Fresh Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Jamba. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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  • Report this Comment On March 14, 2012, at 9:51 AM, meatmann50 wrote:

    Great strategy...follow the money,thats what makes stocks move...money flow.

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