Today's stock market
|Index||Percentage Change||Point Change|
Interest rates rose again today, putting the financial sector in the lead and hurting rate-sensitive utility stocks. The Financial Select Sector SPDR ETF (NYSEMKT:XLF) climbed 1.7% and the Utilities Select SPDR ETF (NYSEMKT:XLU) dropped 2.2%.
Copart beats on revenue, misses on profit
Online automotive auction company Copart reported fiscal fourth-quarter profit that missed Wall Street expectations, and the stock slumped 13.4%. Revenue increased 18.7% to $449.2 million, beating the analyst consensus estimate of $444.2 million. GAAP earnings per share of $0.45 and non-GAAP EPS of $0.42, representing 20% growth over earnings in the period a year earlier, fell well short of expectations for $0.48 in EPS.
Service revenue grew 16.3% to $391.7 million and vehicle sales were up 37.7% to $57.6 million. Global unit volume increased 10.2%, down from 12% growth in a strong Q3. U.S. unit volumes grew 9.8% and international unit volumes were up 12.2%. Average selling price in the U.S. was up 11.9%, thanks to a strong market for used cars and higher prices for crushed cars.
Copart executives said on the conference call that there was a one-time $10.5 million charge for depreciation and amortization that was included even in the non-GAAP earnings calculations, hurting operating profit by about 7%. Even considering that, profit was a miss, so despite recent strong performance and a stock up over 48% year to date as of yesterday's close, investors dumped shares today.
Pot stocks hit new highs
Investors lit up marijuana stocks today, and none more than Tilray, which soared another 38.1% and is up 856% since the close of its first day of trading as a public stock roughly two months ago. Stoking enthusiasm was an interview that Tilray CEO Brendan Kennedy gave to Mad Money host Jim Cramer on Tuesday evening.
In the interview, Kennedy painted an expansive vision of the marijuana industry, sizing it at $150 billion, considerably above the size of the market today (or likely anytime soon). He made the point that drug companies that sell pain relief products can hedge against a loss of market share by partnering with marijuana growers, as Tilray has done with Novartis. Alcohol companies also have an incentive to jump into the cannabis market or else lose out to the early movers in the pot-infused beverage space, such as Constellation Brands with its $4 billion deal with Canopy Growth Corporation.
There was no solid news in the interview, but it doesn't take much to get marijuana investors fired up these days, like yesterday's minor news item that Tilray had been approved to provide cannabis for a drug trial. Today's press release from pot company Cronos Group announcing that it will partner with Aleafia Health to conduct a medical study into the management and treatment of insomnia and daytime sleepiness also fed the frenzy, with shares of the former jumping 9.8% higher as well. Tilray and Cronos were the two most active stocks on the Nasdaq today.