The Daily Dose: A Handful of Quick Hits

 | Dec 23, 2013 | 8:00 AM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


The week is over before it has even begun. Vacations are in full effect, along with a general holiday mindset, and that means thinly staffed trading desks and a lack of wholesale adjustments to portfolios. With nothing of pressing relevance on the docket, rest assured that the bulls will maintain an upper hand. Nonetheless, several things have popped up on my radar.

What Nobody is Saying on Target Data-Breach-Gate

You know where my firm, Belus Capital Advisors, stands on Target (TGT) shares: Sell. That rating was in play long before the security breach -- which never should have occurred if tight internal controls had been in place. However, here are three viewpoints I am not hearing anywhere on this issue:

1. People with Target cards believe that their personal information has been hacked. This isn't technically the case, but this perception stands to dent trust in the Target brand and an already-weakening same-store-sales trend.

2. People without Target cards are now wondering if the company's prices and online store can be trusted. If those data were so easily swiped, why should a "guest" (Target lingo for a customer) believe that the company is offering the best value for their hard-earned dollars?

3. Traditional thieves may now believe Target hasn't properly trained its staff to safeguard shoplifting. Here's how to determine whether theft at Target is on the rise in the weeks that follow: hangers lying messily on the floor (yes, for real). Theft equals inventory shrinkage, which equals profit-margin impact.

In addition to a 2014 earnings-per-share warning I had been expecting from this company, I anticipate a fiscal fourth-quarter profit shortfall relative to an analyst consensus that remains very nonchalant in their modeling. Bottom line: The stock deserves to be bid lower.

Three Broader Economic Themes to Discuss at Christmas Dinner

1. On average, when prior rounds of quantitative easing came to an end, stocks have tended to peak two weeks after the announcement.

2. For companies that bought back shares from 1990 to mid-2013, total returns were 0.83% above those of the S&P 500 during the past 12 months. Obviously we have fielded pretty substantial new buyback announcements this month, so do a screen for the companies with the largest amount of cash as a percentage of total assets in various sectors. Then dig into when preexisting share-repurchase plans are set to expire and the dollar value of shares repurchased thus far, as the first half of 2014 will be buyback announcement mania -- trust me.

3. Say "bye-bye" to emergency unemployment insurance on Dec. 28 for 1.3 million folks thanks to Congress, which did not renew the emergency aid program. Sudden cut-offs and the associated psychological impact to families has me concerned about economic-surprise factors in the first quarter of next year. The charts below shed some light on how the landscape will change for many individuals.

Before Dec. 28, 2013

After Dec. 28, 2013

Columnist Conversations

there is some very heavy selling today and poor price action in Facebook today.  in the first hour the st...
Stock has been roasted last five trading sessions. Time to rotate into Ford ahead of big CEO long-term plan re...
Equity futures were up slightly just before 9:30 PM Sunday night.
Spent a good amount of time with PayPal CEO Dan Schulman this week...and came away fully understanding why thi...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.