The stock market completed another troubling week, with major market indexes moving still lower on Friday. There are a host of issues to look at, including the Russia-Ukraine conflict, the Federal Reserve's monetary policy tightening, and ongoing economic pressures from supply chain disruptions and other problems. Those worries sent the Dow Jones Industrial Average (^DJI -0.98%), S&P 500 (^GSPC -0.46%), and Nasdaq Composite (^IXIC -0.64%) lower again on Friday, extending the correction still further.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
(0.68%) |
(233) |
|
S&P 500 |
(0.72%) |
(31) |
|
Nasdaq |
(1.23%) |
(169) |
Data source: Yahoo! Finance.
Even though the markets were down, investors focused on some success stories. The kinds of stocks they looked at, though, revealed some of the thought process that the investing community seems to be moving toward. Here we'll look more closely at why Dollar Tree (DLTR -0.57%) and Matson (MATX 1.38%) both moved higher significantly on Friday.
Money grows at Dollar Tree
Shares of Dollar Tree finished up more than 5% on Friday. The dollar store retailer made an upper level management move that gave investors a signal that some more drastic changes might be coming to the company in the near future.
Executive board Chair Bob Sasser announced that he will retire from his position. The move will happen before Dollar Tree's 2022 shareholder meeting, according to the release. The 70-year-old Sasser will retain the honorary title of chairman emeritus after retiring.
Sasser has worked with Dollar Tree for more than 20 years, including leading the company as CEO from 2003 to 2017. In his time with the company, Dollar Tree's size has grown more than tenfold using several key metrics, including store count, size of its workforce, annual revenue, and market capitalization of its stock.
It might seem odd for the departure of such a prominent player in Dollar Tree's success to prompt an upward move in the stock price. However, traders are speculating that the activist investors who have focused on Dollar Tree might now have more of a free hand to suggest more sweeping changes at Dollar Tree. If those moves prove to be shareholder-friendly, then it could push the dollar store stock price back to all-time highs and then some.
Image source: Getty Images.
Matson ships it
Meanwhile, shares of marine shipping company Matson were higher by 11% on Friday. Favorable financial results on Thursday evening helped lift the Hawaii-based company, and better times ahead could continue to lift the stock.
Matson's fourth-quarter financial report was positively stellar. Operating revenue jumped more than 80% year over year to $1.27 billion, wrapping up a year with a 65% rise in operating sales compared to 2020 levels. Net income soared more than four times from year-earlier levels in the fourth quarter, with earnings coming in at $9.39 per share.
Supply chain issues are helping Matson dramatically. Its service to China is an important element of its ocean transportation segment, with elevated demand for expedited service helping to boost sales. Meanwhile, Matson is also seeing hefty volume in its domestic trade, and its logistics business is benefiting from inventory restocking efforts and strong supply and demand dynamics in its core markets.
Even after today's jump, Matson's stock price remains below $100 per share. That puts a ridiculously low earnings multiple on the stock that clearly anticipates supply chain disruptions putting a big crimp in Matson's bottom line going forward. Even if earnings do fall, the question is whether they'll fall so much as to justify making the stock look like an attractive value right now.
