Filed under: Company News, Earnings, Market News, Investing
Plenty of stocks go up and down in any given week. The gainers inspire us to keep investing. The decliners keep greed in check while reminding us about the risks of the equity markets.
Let’s go over some of last week’s best and worst performers.
King Digital Entertainment (KING) — Up 20 percent last week
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We’re not playing “Candy Crush Saga” the way we used to, but some of King Digital’s other mobile games are starting to show signs of life. Shares of the casual-gaming leader moved higher after it posted quarterly results.
King Digital is no longer a one-trick pony. Gross bookings for non-“Candy Crush” games have soared 167 percent over the past year and now make up nearly half of King Digital’s total gross bookings. The diversification is paying off. King Digital referred to App Annie data showing that its market share of worldwide revenue generated from casual games in the top 100 titles is 49 percent on iOS and 44 percent on Android.
Whole Foods Market (WFM) — Up 19 percent last week
The country’s leading organic grocer moved higher after posting better-than-expected quarterly results. Sales climbed 9 percent to $3.3 billion, fueled by expansion and a 3.1 percent uptick in comparable sales. Whole Foods Market’s profit of 35 cents a share exceeded analyst estimates for the second quarter in a row.
Things aren’t perfect. Margins contracted once again with net income failing to grow as quickly as sales. Whole Foods is facing competition as mainstream grocers and discount department store chains stock up on cheaper organic food. However, with shares trading 19 percent lower so far this year — even after last week’s pop — it’s easy to see Whole Foods come through with a big move up on a refreshing earnings beat.
Kate Spade (KATE) — Up 12 percent last week
The market for premium handbags has proven challenging for Coach (COH) over the past two years, but the same can’t be said about smaller rival Kate Spade. The trendy maker of expensive purses and other accessories rang up $250.4 million in its latest quarter, 30 percent higher than a year earlier and comfortably ahead of the $244.1 million that Wall Street pros were modeling. Kate Spade also went on to raise its guidance.
Herbalife (HLF) — Down 29 percent last week
The bears are winning the battle at Herbalife. Shares of the distributor of wellness products tumbled after it posted disappointing financials. Herbalife’s quarterly profit fell sharply, largely on Venezuelan currency swings.
Herbalife has become a battleground stock. We’ve been treated in the past to colorful disputes between Carl Icahn on the bullish side and Bill Ackman on the bearish front. Ackman’s claim that Herbalife is a pyramid scheme with the company making money on recruiting new distributors rather than its actual products may or may not be valid, but investors aren’t sticking around. SunTrust Robinson Humphrey (STI) downgraded the stock after the report, slashing its price target from $75 to $55.
Sprint (S) — Down 20 percent last week
It isn’t easy being a wireless carrier this earnings season. Sprint was the last of the four smartphone service providers to report this season, and just like its larger peers, it too wasn’t able to live up to Wall Street expectations.
Sprint posted a wider loss than analysts were projecting. It also revealed that it will lay off 2,000 employees to trim costs.
Michael Kors (KORS) — Down 11 percent last week
Kate Spade may have soared last week, but rival Michael Kors went the other way. Its results were strong on the surface: Revenue soared 43 percent; net income climbed 42 percent. However, analysts were perched on the high end of its guidance for the seasonally potent holiday quarter, suggesting continuing deceleration of the premium handbag distributor’s once heady growth. Goldman Sachs (GS) removed the stock from its conviction list of highest-rated stocks to buy.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Coach, Michael Kors Holdings and Whole Foods Market and has the following options: long January 2016 $57 calls on Herbalife. John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool’s board of directors. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
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Source: Investing
