Microsoft and Kroger Bounce as Both Enter New Chapters

The Dow ignores revised GDP numbers and posts another winning session.

Feb 28, 2014 at 9:00PM
Longview Fool Image

After trading higher all day, the Dow Jones Industrial Average (DJINDICES:^DJI), the S&P 500, and the Nasdaq all nosedived around 3 p.m. EST. While the Dow and S&P 500 found their way back into positive territory today, the Nasdaq wasn't quite so lucky. When the closing bell rang, the Dow was higher for the session by 49 points, or 0.3%, the S&P 500 was up 0.28%, and the Nasdaq was down 0.25%.

These moves came after revised Gross Domestic Product numbers were released earlier this morning that indicated that economic activity in the U.S. for the fourth quarter of 2013 grew at a rate of 2.4%, much lower than the previously announced 3.25% or the 2.5% analysts had predicted. But as my colleague Alex Planes noted earlier today, Wall Street didn't seem to care. Alex does a great job of explaining why -- read it by clicking here.

Within the Dow, one of the biggest winners of the day was Microsoft (NASDAQ:MSFT), which rose 1.19%. The move comes with two stories attracting the attention of investors: first, comments by John Thompson, Microsoft's current Chairman, that the company's new CEO Satya Nadella needs to focus the company and lead those around him in the right direction. Furthermore, Thompson said that the direction needs to be headed toward making the company and its products more relevant to consumers.

The second piece of news follows up nicely with what Thompson said. The Verge reported earlier today that Microsoft is experimenting with the idea of a free version of Windows 8.1. Giving away the company's software has never been Microsoft's strategy, but this would likely get consumers interested in using the program, and Microsoft's other revenue-generating apps. We saw Google take a similar strategy years ago with its Android operating system, which is now one of the most-used operating systems throughout the world. At this time, giving away Windows 8.1 is just a rumor and, in the short run, there would be a big profit hit from doing such a venture; but it could be a very successful strategy long term. 

Outside the Dow, shares of supermarket chain Kroger (NYSE:KR) closed the session higher by 4.48% today. There was little news pertaining to the company today, but during the past few trading sessions, a number of analysts have been mentioning the company. On Wednesday, JPMorgan Chase upgraded the stock from a neutral rating to overweight, and increased its price target from $38 to $46. Then, on Thursday, analysts at Deutsche Bank named Kroger as one of two companies that could acquire struggling grocer Safeway (NYSE:SWY).

Kroger has grown throughout the years though buying out the competition or smaller chains, so this wouldn't be something new; but it would be a very large acquisition. Currently, Safeway is valued at $9 billion, as shares are trading at $37, while Kroger only has a market capitalization of $21 billion. The deal would likely be difficult for Kroger to pull off, especially since the Deutsche Bank analyst believes it would happen at a price somewhere between $45 to $55 per share for Safeway, giving the company a value of around $13.2 billion. While Kroger is clearly the better company of the two and the one I would rather hold long term, in the short term, Safeway may have more upside. 

Looking for the next BIG thing? Look no further.
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Matt Thalman owns shares of JPMorgan Chase and Microsoft. The Motley Fool owns shares of JPMorgan Chase and Microsoft. 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." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information