No Love for Those Who Stumble

 | Dec 04, 2012 | 10:15 PM EST  | Comments
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Tibco (TIBX), Darden (DRI) and, to a lesser extent, Gap (GPS) worry me.

Tibco's one of those companies with software that allows data to be recalled with lightning speed, so when you are shopping for a Tommy tie at Macy's (M) they can quickly match it with a deal on a Tommy shirt. This is the company that allows casinos to manage comping real time. It's always had a reputation as doing better and better each quarter.

Until tonight when it hit the wall. Seventeen consecutive quarters of beating the Street and then, suddenly, tonight it tells people it can no longer keep the streak going. I have interviewed CEO Vivek Ranadive many times and this is pretty shocking.

It can't happen when things are getting better, only when things are getting worse.

Darden's terrible. I can't tell you how much I want to say that management's at fault because I am tired of hearing from management that their advertising didn't resonate. It's incredible the excuses this company keeps offering for its myriad disappointments.

But I just fear that there's a pullback in spending. You get 2% declines in Red Lobster and Olive Garden same-store sales again amd you know things are getting worse, not better.

Finally there's Gap. This was many a gadfly's expectation for the next special dividend play. Instead we got the worst of all possible worlds, a rumor from an investment firm that Gaps' same-store sales are weak, coupled with a statement from management that no special dividend's coming.

The issue is all three of these stocks had been fairly hot of late. Tibco traded at $32 a little more than two months ago, now it is at $21. Gap hit its 52-week high at $37 in October, but was at $35 just last week. Bingo, it's at $30. Darden's down $5 today, stopped maybe only by it 4.22% yield, which may be too flimsy in the post-cliff world.

Tibco and Darden will probably catch downgrades tomorrow. Gap's being defended.

But the bottom line is that there are no bidders for those who screw up or are rumored to be doing badly. This reminds us, again, that we have a treacherous tape until the disappointment of no fiscal cliff deal becomes the consensus view for all to see.

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