Please ensure Javascript is enabled for purposes of website accessibility

January Home Sales Dip, American Railcar Industries Jumps Again

By John Divine - Feb 21, 2014 at 6:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Disney ends as the best performer in the Dow, Tile Shop Holdings rallies 13% on earnings.

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.

Stocks finished off the shortened week of trading with a whimper on Friday, as mediocre housing data failed to either impress or depress investors. Existing home sales fell 5.1% in January from last January, though median home prices rose more than 10% in the same period. The sales slump was roughly in line with expectations, and the months ahead should give a better idea about whether weather played a role in the falling sales. An uninspired Dow Jones Industrial Average (^DJI 0.09%) fell 29 points, or 0.2%, to end at 16,103. 

The services sector was the second best-performing sector in the stock market today. Entertainment behemoth Walt Disney (DIS 2.33%) finished as the Dow's top performer, adding 1.2%. With ABC, Disney, and ESPN all under its belt, the company makes more in TV distribution fees than any other company in the world. If "cord-cutting" -- the tendency of consumers to stop paying for cable in favor of online content – catches on, Disney's distribution fees will likely take a hit. This is why the forward-looking Disney has teamed closely with Netflix to distribute its content in the age of streaming. 

Shares of American Railcar Industries (NASDAQ: ARII), which makes, sells, and leases railcars, jumped 9.1% on Friday, just a day after the stock rallied more than 14% on the heels of a robust earnings report. The $1.3 billion American Railcar Industries is a direct beneficiary of the domestic energy boom, as demand for the transportation of oil and gas rises with energy production. The rail industry represents an interesting derivative play on America's energy renaissance, and American Railcar shareholders are sitting pretty right now; margins are rising, and the board approved a 60% dividend increase only two days ago. 

Lastly, shares of Tile Shop Holdings, (TTSH 3.26%), a specialty tile retailer, surged 13.9% on Friday. Not surprisingly, this pop was also sparked by a strong earnings report. That all-important metric for any retailer, same-store sales, edged up more than 10% in the fourth quarter, and was up 12.4% in 2013 as a whole. Retailers can only boost revenue by opening more stores or increasing their sales at existing stores, so Tile Shop currently has half of that equation figured out. Incidentally, it has the other half figured out, too, growing its store base by 30% in 2013; now, all it needs to do is turn consistently profitable!

John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool recommends Netflix, Tile Shop Holdings, and Walt Disney. The Motley Fool owns shares of Netflix, Tile Shop Holdings, and Walt Disney. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$32,832.54 (0.09%) $29.07
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$109.11 (2.33%) $2.48
Tile Shop Holdings, Inc. Stock Quote
Tile Shop Holdings, Inc.
TTSH
$3.80 (3.26%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/09/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.