A Nutty Environment

 | Feb 11, 2014 | 11:18 AM EST
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It is incredible how the facts sometimes don't fit the story. Yesterday, we saw people clamoring to the consumer staples in part because of the economic weakness in retail and because of the weaker employment number.

But the staples aren't what they used to be. Take old reliable ConAgra (CAG). This stock has been a tremendous performer since Gary Rodkin took over as CEO and separated the wheat from the chaff. However, ever since it decided to go big into private label with the purchase of Ralcorp, the stock's performance has been horrendous. (See Herb Greenberg's piece for more details.) Today, we heard the cut guidance and it is just plain nasty with no real yield support in sight.

Dean Foods (DF) seemed to be having a good run of things after it spun off Whitewave, but raw costs have caught up with that one, too, and the stock is being hammered. (Remember, I am concerned about almond milk raw cost for Whitewave.)

Few businesses seemed to be more stable than animal health but Zoetis (ZTS), which made a lot of promises but failed to deliver on its forward guidance. The stock just took out its low. Brutal. Just brutal. Another staple gone by the wayside in lightning speed.

Then there's Annie's (BNNY), a key component in the natural and organic food segment that has been red-hot. The company just failed to deliver on both the top and bottom lines, causing people to wonder if there is too much competition and too high a cost to being organic and natural. People seem to be taking it as company specific because  Whole Foods (WFM), which reports this week, keeps climbing, and Hain Celestial (HAIN) had good business with Whole Foods. I just wish the latter name wasn't running ahead of the quarter.

Now, you want some real lunacy? Last night, Masco (MAS) reported a number that was not so hot, but the market loved it; it loves the cabinets business . This is a company that was thought to have run out of gas with the slowdown in housing. Nevertheless, it seems that sellers are drying up and buyers are rushing in. Suddenly, there is forgiveness in housing. Believe me, that's out of nowhere.

And biotech's former darling, Regeneron (REGN), has come roaring back on a sharply expected quarter -- even as everyone was supposed to be expecting a sharply better-than-expected quarter. The whole thing is a little nutty if you ask me.

Now, the overall backdrop is better because of a stay-the-course attitude from Fed Chair Janet Yellen, a delayed implementation of Obamacare for small businesses and the possibility of an actual agreement between Democrats and Republicans for a debt ceiling increase.

I just think it's more treacherous and case-by-case than people realize. And the last few cases haven't been all that well received. 

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