Stocks can stink sometimes
In a week that was loaded with a Fed rate cut and hundreds of telltale earnings reports, I couldn't help noticing that the IPO market tends to go more smoothly if you're a rapidly growing Chinese company.
You're not necessarily finding insurance brokers and gaming companies going public domestically. The key here is that these stocks offer growth, since they sit on the coattails of a booming Chinese market.
It was a busy week, so let's dip briefly into a few of the intriguing financial headlines.
- What's more bloated: Chipotle
(NYSE:CMG) (NYSE:CMG-B), or the analysts who can't keep up? Before you argue that I left out the stock's valuation as a third bloated choice, go join the skeptics at the end of the line. Chipotle's earnings surged 75% higher in its third quarter. The burrito baron has obliterated Wall Street expectations in each of its first eight quarters as a public company. The company's already proved that it can manage to stuff a tasty tortilla -- now it's showing investors that it's equally adept at managing expectations.
- Rumors that Google
(NASDAQ:GOOG)will enter the cell-phone market continue to heat up. This time it's The Wall Street Journal citing sources that expect an announcement within the next week or so. I'm not sure I see the allure in a Gphone, unless we're talking about heavily subsidized Web usage. Can "Ringtone Ads by Google" be too far away?
- The Federal Reserve chose to lower rates on Halloween. What's up with that? Did Ben Bernanke think his house would get egged if he didn't deliver a treat to distressed borrowers?
(NASDAQ:CROX), finally proving mortal, disappointed investors with puffy inventory levels and subdued near-term guidance. When its shares fell by 36% on Thursday, it put more holes in portfolios than some of its own shoes have. I still believe in the company, though. The market is underestimating its push into new product categories, and the laid-back outlook isn't as bleak as the price drop would make it seem. To be fair, I was also bullish a week earlier, and I was wrong to be upbeat about the stock at much higher levels.
Until next week, I remain,