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(Best) AM, SURW, CDE (Worst) ATU, SVU, RMBS from Better Trades

Home > Movers and Shakers > Best and Worst Stocks of June 29, 2009

June 29, 2009

The markets are coming off their first weekly loss in more than a month. The week saw the Dow drop 3%, while the S&P lost 2.6% and the NASDAQ slipped 1.7%. Investors were discouraged throughout the week as several economic reports dampened traders’ sentiment.

Top 3 Stocks

AM – American Greetings Corp. ($6.65 to $10.70) +60.9%

Operating as the world's largest publicly held creator, manufacturer and distributor of greeting cards and social expression products, American Greetings Corp. (AM) posted some of the highest percentage gains over the past week, due in large part to their earnings release that came in higher than expected.

For the company’s 1Q, American Greetings posted a profit of $10M, or $0.25 per share, albeit 25% lower than previous year’s 1Q earnings of $13.3M, or $0.27 per share. Overall sales during the period declined as well, falling from $428.3M to $412.0M, nearly a 4% drop.

On average, analysts within the industry were looking for earnings during the 1Q to come in at $0.20 per share on total revenues of $396.6M.

American Greetings also confirmed that the company purchased the wholesale division of Schurman Fine Papers, which supplies Papyrus brand greeting cards. The company also made it known that they purchased a 15% equity interest in Schurman.

"We realized improved margins as a result of our cost reduction activities last year and we will continue to focus on efficiencies this year," commented Zev Weiss, CEO at American Greetings.

Looking ahead, AM is looking to post free cash flow from operations near $70M for the fiscal year. Within the markets, shares of AM surged the day following their earnings announcement, posted their highest mark in more than six months.

Having traded down nearly 16% since the start of the year, American Greetings shares gained more than $4 per share over the past week. The stock resumed its upward trek on June 29, adding just over 4%, or $0.48, to end the session at $11.18 per share.

Over the course of a year, shares of AM have traded within a range between $3.24 and $18.45 per share.

SURW – SureWest Communications ($9.33 to $11.05) +18.4%

Posting gains of nearly 20%, or $2 per share, SureWest Communications (SURW) conduct business by creating value for customers through an integrated network of highly reliable advanced communications products and services with unsurpassed customer care.

Not relying on overwhelming news during the course of the past week, SureWest benefited from investors taking notice of the company’s initiative to upgrade their customers’ Internet speed for free. As a leading independent communications holding company, SURW became the nation’s first company to provide their customers with a two-way Internet speed at 50 megabits per second (mbps) to those that have “fiber-to-the-home” connections.

Those residing in the greater Sacramento area will be the first to receive these upgrades. With a symmetrical system in place, that of greater speeds for uploading and downloading data on the Internet, faster speeds will enhance those involved in online gaming, as well as music, video and photo sharing practices on the net.

"In today's environment, customers are understandably searching for ways to receive more value from their products and services," announced Pete Drozdoff, Vice President of marketing for SureWest. "Our key to differentiating SureWest from the competition is our ability to deliver value and reliability to customers through cutting-edge products and features over our superior fiber-optic network. This free speed upgrade enhances the Internet experience for our customers and continues to allow us to outperform the competition with the fastest connection speeds wherever we serve."

Despite more than an 18% jump in market value over the past week, shares of SURW traded lower to start the new week. By the sound of the closing bell, SureWest stock was lower by $0.43, or 3.9%, to end the session at $10.62 per share.

Throughout the year, shares of SURW have traded as high as $18.50 per share, and as low as $6.32 per share.

CDE – Coeur d’Alene Mines Corp. ($10.80 to $12.72) +17.8%

Rounding out the top three percentage gainers for the week was Coeur d’Alene Mines Corp. (CDE), which is engaged in the operation and/or ownership, development and exploration of silver and gold mining properties and companies located primarily within the United States and South America.

The week that was saw the company’s stock gain nearly $2 per share in trading, due largely to a court ruling by the U.S. Supreme Court that the mining company is now permitted to deposit rock waste from their Alaska gold mine into a lake on federal land.

With countless environmentalists keeping a close eye on the situation, the ruling comes after a U.S. Court of Appeals had invalidated the company’s permit from the underground Kensington Gold Mine located Northwest of Juneau. In 2005, the U.S. Army Corp of Engineers initially granted CDE a permit to dump nearly 4.5 million tons into the aforementioned lake over the course of decade.

"We now look forward to bringing Kensington into production, which we are now targeting for the second half of 2010," affirmed Chairman, President and CEO Dennis Wheeler, following the recent ruling.

The Kensington mine is looked upon to produce nearly 125,000 ounces of gold annually, representing a 135% increase over the company’s total gold production.

Heading into a new trading week, shares of CDE were up nearly 18% at the start of the June 29 session. At the sound of the closing bell on Monday’s session, CDE was continuing their upward trend, adding $0.11, or 0.9%, to close the day at $12.83 per share.

Over the past 52 week, Coeur d’Alene Mines has traded as high as $31.10 per share and as low as $3.60 per share.

Worst 3 Stocks

ATU – Actuant Corporation ($15.21 to $12.50) -17.8%

Doing business as a diversified industrial company with operations in 15 countries, Actuant Corp. (ATU) offers numerous products under such established brand names as Enerpac, Gardner Bender, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and Power Gear. During the past week, ATU shares were hit hard as investors were discouraged by the company’s directions following a public offering to help pay down debt.

On June 22, Actuant confirmed that the company was in the process of publicly offering 9.5 million shares of common A class shares at $12 per share. Included in the offering, the company also instituted a 30-day option for the underwriters to purchase upwards of an additional 1.425 million shares in order to cover any over-allotments. J.P. Morgan Securities Inc. and Merrill Lynch & Co. are acting as managers for the offering.

With more than 56 million in outstanding shares already, the company’s main purpose for the offering is to help pay its debt, as well as increasing funds for operations. More than $108M is expected to be raised from the offering, minus discounts, expenses and commissions.

In the week prior to the company’s public offering, Actuant released their 3Q earnings report, in which the company booked a net loss of $17.6M, or $0.31 per share, compared to a profit of $38.6M, or $0.60 per share.

Following a slight increase in share price after their earnings report, the stock preceded to lose nearly 18% in market value after last week’s news. By the end of the June 26 trading session, shares of ATU has lost nearly $3 per share.

At the start of the new trading week, shares of Actuant resumed their downward trend, slipping marginally in the June 29 session, giving up $0.10, or 0.8%, to end the day at $12.40 per share. Shares of ATU have traded within a range between $7.02 and $34.10 per share over the course of a year.

SVU – SuperValu Inc. ($15.90 to $13.41) -15.7%

Added to the list of the biggest percentage losers over the past five trading sessions, one of the nation's largest supermarket retailers and largest food distributor, SuperValu Inc. (SVU) witnessed their stock price plummet during the week, in large part due to the company’s warning for upcoming 1Q results.

Durving the June 24 session, SVU officials made it known that the company’s performance for the quarter was hurt substantially by the current economic demise and recent price cuts to induce spending did not pan out. These factors led the company to warn investors that results would miss market expectations.

On the day of the announcement, share of SVU plunged nearly 12% to close the day at $13.81 per share. Throughout the remainder of the week, the stock’s price would gradually slip to $13.41 per share, losing more than 15% in the course of a week.

"Since providing guidance on our fourth quarter earnings call, consumers have become more value focused and cautious in their spending which has pressured sales and margins greater than anticipated," reiterated Craig Herkert, CEO at SuperValu.

Company representatives stated that the upcoming 1Q results would be “substantially” lower than previously stated. Analysts, on average, are looking for the grocery store chain operator to post quarterly earnings of $0.65 per share.

Even though the broader markets began the new week trading in the green, shares of SVU remained in the red, slipping $0.28, or 2.1%, to finish the June 29 trading session at $13.13 per share. Shares of SVU have reached as high as $32.89 per share as well as hitting lows of $8.59 per share over the past year.

RMBS – Rambus Inc. ($18.70 to $15.79) -15.6%

Rounding out the list of those stocks that posted significant losses for the past week includes Rambus Inc. (RMBS). The company is engaged in the design, development, licensing and marketing of high-speed chip-to-chip interface technology in order to enhance the performance and cost-effectiveness of computers, consumer electronics and other electronic systems.

The company’s news related to the downfall over the past week was two-fold. The first news regarding Rambus was the company’s lowering of revenue expectations for the upcoming 2Q. Previously stated to come in between $27M and $30M, Rambus officials are now looking to post sales between $26.7M and $27.2M.

In a related announcement, Rambus representatives announced their intention of tendering nearly $150M in senior, convertible notes set to mature in 2014. Rambus intends on using the potential proceeds from the sale to repay Rambus’ zero coupon convertible senior notes due to mature in 2010. The company is also planning to use any remaining cash from the sale to use towards working capital.

The company’s announcements during the week propelled the stock downward by the conclusion of the trading week. losing more than 15%, or $2.91 per share. The stock continued its decline as the June 29 session kicked off a new week.

By the sound of the closing bell, shares of RMBS were trading in the red, falling $0.24, or 1.5%, to end the day at $15.55 per share. During the course of a year, Rambus shares have traded as high as $20.15 per share and as low as $4.95 per share.

2009 Better Trades Article

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