Top News on Jan. 15 that You Might Have Missed
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Every day I provide the top news that you may or may not have heard for that particular day. This includes news that often slips through the cracks of whatever headline is dominating the market. On Tuesday, there was a lot of company specific and overall segment related news that could have long-lasting effects. Therefore, let’s take a look at a few of these top stories.
Apple 'Closes' Below $500
For the first time in 11 months, shares of Apple (NASDAQ: AAPL) closed below $500 following a downgrade and a slashed price target from $660 to $530 by Nomura. In addition, concerns continue to mount regarding iPhone 5 demand, as the WSJ reported that component orders had been slashed 50%.
The most frustrating part of the Apple story is that the company can not comment, as it prepares to announce earnings. In the process of its massive fall Apple has now become a stock yielding almost 2.2%. The perception continues to fall with each passing day, as recent data from Bernstein shows that the stock is losing its appeal to growth funds as well as retail investors. The trend of this stock will be closely monitored over the next few months as funds rebalance, and will most definitely hold its position for many days as producing “top news.”
Wal-Mart Sets Goal to Grow the Economy
Apple may be the largest company in the world, but there's no doubt that Wal-Mart (NYSE: WMT) is still the most powerful, with the best grasp on the economy. The company already employees over 2 million workers worldwide, but on Tuesday they announced plans to hire an additional 100,000 veterans and to buy $50 billion in U.S.-made goods.
This was big news for the retailer, as most large companies have elected to operate conservatively with large amounts of cash on their balance sheet. The company also saw its stock rise 1% after the announcement, however there are some concerns that analysts may come crashing down due to heavy assessments of margin pressure. Therefore, I’d continue to monitor this development.
Steroids in Sports Is 'Costly' to More than Just the Game
In case you got bored with CNBC or Fox News, then maybe you flipped on to another channel and found that Lance Armstrong was dominating the news. The most decorated cyclist of all-time, and the cancer pioneer, finally admitted after years of denial that he had in fact used steroids, during an interview with Oprah Winfrey.
The confession is expected to cost the cyclist millions in lawsuits due to allegations of slander and abuse towards his peers. However, retail giant Nike (NYSE: NKE) could also be at the forefront of these lawsuits. Analysts expect a flurry of lawsuits as a result of Armstrong’s confession against the company that sponsored him for years, Nike. Reportedly, Nike had been at the epicenter of several cover-up scandals over the years and supposedly the reality of Armstrong’s secret life could cost the company many millions combined with a change in public perception.
Graphic Search May be Cool, but it’s No Facebook Smartphone
Facebook (NASDAQ: FB) has rallied for weeks, actually months, as certain segments of its business have strengthened and as we await its next “big thing.” In the days prior, Facebook shares have rallied higher, crossing the $30 mark, in anticipation of its Jan. 15 event. However, the event in some ways was disappointing to many who were expecting to see the first glimpse of a Facebook smartphone.
Instead, we got “Graphic Search,” which is the company’s first social search. The new feature will hopefully increase a user’s activity on Facebook and also open new doors for advertising. Long-term it may be a good fit, but for now, it caused a 2.75% decline in shares of the stock.
Dell Continues to Rally Higher
Dell (NASDAQ: DELL) has traded higher by 20% in the last two days as rumors of a private equity takeover begin to look more likely. On Tuesday, there were two companies mentioned as serious contenders: LBO and Silver Lake. This adds substance to the rumors, and created additional gains for the stock.
However, the big question now is regarding the purchase price. Perhaps the buyout will produce an immediate 20% return, but with a 20% gain in the last two days I’d consider the possibility that the full premium is quickly approaching, and that minimum upside exists.
Developments such as these ultimately dictate the direction of a stock, both short and long term. Therefore, it’s important that investors are aware of these developments and then, with additional due diligence, use the information to make an educated investment decision. With that being said, stay tuned to what may happen next.
BrianNichols owns shares of Apple. The Motley Fool recommends Apple, Facebook, and Nike. The Motley Fool owns shares of Apple, Facebook, and Nike. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!