AT&T, Verizon, and Herbalife Fall, as RadioShack's Super Bowl Ad Pushes Stock Up

Major indexes tank after poor economic data.

Feb 3, 2014 at 1:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

After another round of poor economic data hit investors today, the major indexes are heading lower once again. As of 1:05 p.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) is down 238 points, or 1.5%, the S&P 500 is off by 1.7% and the Nasdaq is down 2.1%.

The Institute for Supply Management reported a January manufacturing reading of 51.3 when analysts were looking for a 56.4. Anything below 50 indicates contraction, so while the numbers weren't that bad, they aren't great either.  

One Dow loser today is AT&T (NYSE:T), as shares have now fallen more than 3.5%. The drop comes after the company went on the offensive in the wireless service providers wars. AT&T announced a new family plan that includes unlimited talk, text, and 10 gigabytes of data for two lines at $130 per month, and only $15 per additional line. A family of five can now have a plan for about $175 month; Verizon's (NYSE:VZ) similar plan would cost roughly $300. Shares of both carriers are down about 3%, as they will likely begin to see margins fall as this battle continues.

Shares of the controversial supplements company Herbalife (NYSE:HLF) are down more than 2%. The move comes after the company released some preliminary earnings information and a few other housekeeping notes. The earnings forecast came in much better than analysts expected -- management now feels it will post revenue of $1.27 billion in the fourth quarter, above the $1.22 Wall Street predicted, and about $4.82 billion for the fiscal 2013 year, slightly lower than the $4.87 billion consensus estimate. Earnings per share are expected to come in within a range of $5.35-$5.39, much higher than the $5.26 analysts estimated. Additionally, the company announced it would increase its share repurchase program by $1 billion, which adds to its current program tol give it roughly $1.5 billion to buy back stock. But the news that the company is taking out $1 billion in senior convertible notes to help pay for this buyback, and for other administrative and corporate purposes, may be what's sending shares lower.  

One big winner from last night's Super Bowl, besides Seattle, is RadioShack (NYSE:RSHCQ), as shares are up 4.4% this afternoon on very little news other than the retailer's Super Bowl commercial last night. RadioShack poked a little fun at itself with an ad that had an employee answer the telephone and then say, "The 80s called. They want their store back." Seconds later, the store was being torn apart by movie and TV characters from the 80s. The company was trying to show that its stores have been updated and that the "new" RadioShack stores are very nice and inviting. Whether the ad is enough to change consumers opinions and get them back in the store will be seen, but it was certainly a good attempt at doing just that.  

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Matt Thalman has no position in any stocks mentioned. The Motley Fool has the following options: long January 2015 $50 calls on Herbalife Ltd.. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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