|
Stocks to Watch for the Week of February 4th
As a valued InvestorsObserver reader, we would like to offer you a free opportunity to access our weekly Stocks to watch guide. Each week, our analysts examine the markets for stocks and stories that will likely make headlines or influence trends during the upcoming days. Our Stocks to Watch guide explains why each selected stock is expected to move, brief technical analysis, charts, analyst thoughts, plus trading ideas designed to maximize profits while protecting investors from unexpected market fluctuations.
We’ve included below a brief summary of what’s going on with these five stocks, the technical analysis for each, plus our analyst's thoughts. Join InvestorsObserver Essentials now to see three trade ideas for each stock covered and get the financial knowledge you need for this week.
 
What's happening with DIS: Disney (DIS) is currently trading just shy of its 52 week high. The company is coming off a strong 2012, which saw the stock climb just shy of 33%. While it was a strong year for the stock, the majority of the gains took place during the first nine months, before the stock hit a sideways pattern during the last three months. One of the biggest pieces of news about Disney of late was the company landing "Lost" creator, and "Star Trek" director J.J. Abrams to direct the next "Star Wars" film. Disney purchased Lucasfilm late last year for $4.05 billion. The company will be reporting fiscal first quarter results on February 5th, with analysts forecasting earnings of $0.76 per share. During the same period last year the company had earnings of $0.80. Disney has either met or beat analyst estimates each of the past 6 quarters.
Technical analysis: DIS was recently trading at $53.79, down $1.08 from its 12-month high and $15.23 above its 12-month low. Technical indicators for DIS are bullish and the stock is in a weak upward trend. The stock has support above $51.85. Of the 25 analysts who cover the stock 13 rate it a "strong buy", three rate it a "buy" and nine rate it a "hold". The stock receives Standard and Poor's 5 STARS "Buy" ranking.
Analysts' thoughts: We like Disney for a couple of reasons. The first is that the U.S. economy is improving, which will help Disney theme parks as tourism picks up. We are also bullish on the stock in the long term. One reason is that by the end of 2013 we expect to see Disney re-negotiate its affiliate fees for ESPN. If there was ever a "must have" channel for television providers, it is ESPN, and Disney will be able to get whatever it wants in the negotiations. Looking further down the road, its Studio is gearing up for a blockbuster year in 2014 with titles such as "Thor 2", "Captain America 2", "Iron Man 3", and Pixar's next feature "The Good Dinosaur". It will then follow those titles up with the new "Star Wars" film in 2015. Lower unemployment should lead to greater tourism, and with its studio lineup as strong as it is, Disney is a great long-term play.
What's happening with RIMM: Research in Motion (RIMM) has been in serious trouble for the past few years. The company, which was once the leader of the smartphone revolution, has been struggling to compete in a market dominated by Apple (AAPL) and Google (GOOG)-powered Android phones. Analysts have been waiting to see the company's new Blackberry 10 mobile operating system, which the company believes will breathe life back into the company. After several delays, it finally launched Blackberry 10, but the stock has been down since the launch. RIMM introduced two new phone models, but neither will be available until March and one is not scheduled to hit stores in the U.S. until April. Analysts fear that the phones will not be good enough to lure customers back and more importantly won't convince current Blackberry owners to stay with Blackberry. The company also announced it would be changing its name to Blackberry and changing its ticker to BBRY.
Technical analysis: RIMM was recently trading at $13.78, down $4.54 from its 12-month high and $7.56 above its 12-month low. Technical indicators for RIMM are bullish but showing a possible trend reversal. The stock has support above $11.10. Of the 32 analysts who cover the stock two rate it a "strong buy", one rates it a "buy", 15 rate it a "hold", two rate it a "sell" and 12 rate it a "strong sell". The stock receives Standard and Poor's 3 STARS "Hold" ranking.
Analysts' thoughts: The fact that RIMM stock lost 10% on the day of Blackberry 10's launch, and an additional 7% the following day is a clear indication that Wall Street has lost faith in the company. Shares advanced ahead of the launch, but now that it the news is out, skepticism has returned. Early reviews are positive, but serious questions remain as to whether or not anyone will be willing to give up their iPhone or Android phone to try out the new Blackberry. There is also the danger that a lot of current Blackberry users that have been putting off the decision on a new phone until they can try Blackberry 10 will decide to jump ship. Traders expected the phones to be available sooner than March or April and the fact that users have to wait a couple more months opens the window for more people to abandon Blackberry out of frustration. The long-term view of this company is not positive, and we believe Blackberry 10 is not going to be enough to turn things around.
|