The monthly jobs numbers are in, and they look good. How will this impact the Fed, and its tapering off of its quantitative easing program? In this video from Friday's Investor Beat, host Chris Hill and Motley Fool analyst Ron Gross discuss the jobs numbers, what they reflect about the economy today, and the key investor takeaways.
Then, Safeway, the second largest grocery chain in the U.S., has announced that it will be taken private by private equity firm Cerberus Capital. The firm will be paying $40 per share for Safeway in a $9 billion deal that will bring the grocery chain under the Cerberus umbrella to join Albertsons, which should help the business in terms of scale to take on other grocers like Kroger, or even the big box retailers that also sell groceries, such as Wal-Mart. While investors are seeing virtually no premium to the current stock price in the buyout, Ron notes that there has been talk of this being a possibility for a while now. The stock's growth during the past few months reflects the idea of a buyout being already baked in to today's price.
Also, shares of headphone-maker Skullcandy shot up nearly 30% today after the company reported fourth-quarter results that were better than expected. "Better than expected," however, translates to profits being down nearly 70%. Chris and Ron discuss just how low the sentiment around Skullcandy had to be for the stock to react this way on such awful news. Ron says a mix of beating expectations, plus investors doing some short covering who had thought the company was done for, can cause a pop like this. While he does see a handful of things that the company is doing right at the moment, he doesn't see much of a competitive advantage here, and wouldn't be a buyer at these prices.
And finally, Ron gives investors one stock that he'll be watching closely this week. He takes a look at Arcos Dorados, which holds the franchise rights to McDonald's in Latin America and the Caribbean. The company reports earnings next week, and while it has been a long time holding for Ron in the Motley Fool's Million-Dollar Portfolio service, he sees reasons to be concerned here. The company's store growth is slowing, so he'll be watching closely to see what the company has to say next week.
Chris Hill has no position in any stocks mentioned. Ron Gross has no position in any stocks mentioned. The Motley Fool recommends McDonald's. The Motley Fool owns shares of Arcos Dorados and McDonald's. 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.