Gaining Despite Fundamental Loss
Guess?, Inc. (NYSE:GES) is trading higher by 10.5% after the company reported a mixed earnings report. In the quarter, Guess?, Inc. (NYSE:GES) missed revenue expectations as total sales declined 5.2% year-over-year, yet its EPS was far better than the consensus.
Guess?, Inc. (NYSE:GES) has seen its stock increase 32% in 2013, therefore it’s hard to argue that expectations were low. When you look at the fundamental performance of this company – including a 9.8% year-over-year decline in comparable store sales and a 53.3% decline in earnings per share – it is hard to find a reason that the stock is trading higher.
While the company issued soft full-year guidance, it appears as though the market is responding to better-than-expected FQ2 guidance. The market may also be responding to the company’s announcement to integrate online order fulfillment at its stores, which has boosted margins for Macy’s.
Overall, I don’t see any significant improvements, nor do I see a reason to be optimistic. Thus, I would not buy after this pop.
Speculation of New Products Boosts This Stocks
OmniVision Technologies, Inc. (NASDAQ:OVTI) exploded higher with gains of 20% after the company blew past earning expectations. The beat came as a result of a 21% year-over-year decline in total sales.
OmniVision Technologies, Inc. (NASDAQ:OVTI) is a semiconductor company whose products are used in Apple Inc. (NASDAQ:AAPL) products. Thus, investors expected the FQ4 revenue drop – but what investors didn’t expect was bullish guidance – and that’s exactly what they got.
The company issued FQ1 revenue guidance of $355 million-$390 million, which is far greater than the $347 million that was expected. The company’s products are already designed into the iPhone 5, fourth-generation iPad, and the iPad mini, and this guidance is indicating to many that a low-cost iPhone – and possibly other products – are already being developed.
The company is currently trading at 0.60 times sales, and with new products on the horizon, I definitely think that OmniVision Technologies, Inc. (NASDAQ:OVTI) is an interesting stock.
That’s a Lot of Doughnuts
Krispy Kreme Doughnuts (NYSE:KKD) is the post-earnings performance leader with its 23% gain. The company is seeing these gains after revenue rose 11.2% year-over-year to revenue of $120.6 million – which is a lot of doughnuts!