Service Stocks

Pep Boys PBY Stock News

Pep Boys-Manny Moe and Jack (NYSE: PBY)

Thanks to recent takeover bids, Pep Boys has become an incredibly fun stock to watch as of late. Now, the bidding war is getting more fierce and it’s thanks to Carl Icahn’s desire to take the company over. Recently, Icahn changed his bid in an attempt to ensure victory in the bidding wars. Today, we’ll talk about what Icahn now bids to take over PBY, who Icahn is bidding against, how the market is reacting to the recent news, and what we can expect to see from PBY moving forward.

Carl Icahn Increases His Bid For PBY

Before Christmas, Carl Icahn made a bid to take over Pep Boys in a massive sale valued at $16.50 per share. However, yesterday Icahn changed his mind and decided to offer more. Now the billionaire investor is putting $18.50 per share on the line. So, what made Icahn up the ante? Well, it’s Bridgestone Corp. (BRDCY). Bridgestone is a Japanese manufacturing company that’s heavily focused on the tire industry. After Icahn made his bid of $16.50 per share, Bridgestone stepped in and offered $17 per share on Christmas Eve. As a result, the bidding war has commenced. However, instead of nickle and diming the bid, Icahn threw all of his chips on the table, raising his bid by $2 per share in a single move.

How The Market Is Reacting To The News

Ultimately, investors love to see take overs, especially when the price of the take over is at a premium. By bidding $18.50 per share to take over PBY, Icahn has offered a premium and fueled quite a bit of investor excitement. So naturally, the stock is up in a big way. While it is still very early in the day, PBY is currently (9:35) trading at $18.78 per share after a gain of 7.87%.

Who Will Win The Bidding War

While it’s clear that Bridgestone wants to take over PBY, it’s not likely that they’ll get the opportunity if Icahn keeps showing the cash he’s got on hand. You’ll notice Bridgestone upped Icahn’s original bid by a mere $0.50, but when Icahn responded, he responded with a $1.50 increase on what Bridgestone was offering. What I’m getting at here is that Icahn is taking a very aggressive role and making it clear that he’s not going to step down from this bidding war. As one of the richest men on the planet today, not only does he have the desire to take the company over, he’s got the cash to back up his plan! With that said, in the case of PBY, I’m expecting that Icahn is going to win the race.

What We Can Expect To See Moving Forward

While the outcome is unclear, one thing is certain: Bidding wars move prices upward. As the bidding war continues between Icahn and Bridgestone, we’re likely to see PBY continue increasing in value. However, that’s not the only reason PBY deserves to grow. The reality is that Pep Boys is a great company with a great management team. The company has a proven record of success and will likely continue the trend. Ultimately, this bidding war is simply helping PBY realize the growth the stock deserves.

What Do You Think?

Where do you think PBY is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

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United Parcel Service UPS Stock News

United Parcel Service, Inc. (NYSE: UPS)

United Parcel Service has had an incredibly hard time in the market throughout the year 2015. However, I believe that the stock is primed for gains. Now may be the time to get in on this one. Today, we’ll talk about why UPS is likely to climb throughout 2016 and beyond.

UPS Has A Solid History Of Producing Strong Earnings

Earnings is one of the first things I look at when attempting to determine if a stock is a good one to buy. In the case of UPS, the company has historically produced solid earnings quarter after quarter. In fact, over the course of the past 4 quarters, the company has beat analyst expectations with regard to earnings 3 times and met earnings expectations 1 time. Not once over the past 4 quarters has UPS missed earnings expectations.

Fundamentally, UPS Is Headed Upward

While solid earnings are a great indication of a strong stock, I’ve seen several cases where, after several quarters of strong earnings, a company produces under expectations. So, it’s important to look at fundamental factors associated with the stock in question. In the case of UPS, there is one fundamental factor that’s likely to send the stock skyrocketing! That is a big change in consumer habits.

As most know, UPS specializes in shipping products. While consumers aren’t shipping letters and paying bills by mail as much today as they used to, these types of shipments have never been the bread and butter for UPS. For UPS, the bread and butter is the shipment of larger things. This leads us to a discussion over a major change in consumer habits!

In the past, when consumers wanted to purchase products, the first thing they thought of was going to the store and getting what they wanted. However, times are changing and so are consumer habits. Today, more and more consumers are grabbing their laptops, tablets, smartphones and more when they decide that it’s time to purchase a product. Online retail is expanding in a big way. Amazon, Ebay, Google and Facebook have all become great ways to find great deals and are growing in big ways because of the ways consumers are shopping today. In fact, IBIS World Research forecasts that online purchases will grow by 8.6% per year over the course of the next 5 years!

When shopping online, one thing is certain, products will need to be shipped. While companies have the ability to ship products using any carrier they would like, there’s no doubt that UPS is likely to take a large portion of those shipments. In fact, according to Statista, UPS takes the largest market share over any other shipping company. Even FedEx doesn’t come close to the market share held by UPS! Therefore, as online retail continues to grow, we can expect to see sustained growth in UPS shipments, revenue and earnings. This will likely lead to bullish activity in the market.

What We Can Expect To See In 2016

When it comes to UPS, I have an overwhelmingly bullish opinion of what we can expect to see from UPS. The reality is that when we talk about UPS, we’re talking about the shipping company that takes the largest market share. With online shopping climbing, it only makes sense that this company’s earnings would climb as well, leading to investor excitement and growth in the stock.

What Do You Think?

Where do you think UPS is headed and why? Let us know your opinion in the comments below!

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Nike NKE Stock News

Nike Inc (NYSE: NKE)

Nike is having an incredible time in pre-market trading today after announcing earnings following the closing bell yesterday. Ultimately, earnings beat expectations, causing investor excitement and leading to incredible gains. Today, we’ll take a look at the earnings report, how investors reacted to the news and what we can expect to see from NKE moving forward.

Nike Earnings Come In Ahead Of Expectations

As expected, NKE released its earnings report for the second quarter of fiscal 2016 yesterday after the closing bell. While earnings came in ahead of expectations, revenue was a bit of a miss. Here’s what we saw from the earnings report:

  • Earnings Beat Expectations – In the case of earnings, NKE did incredibly well. During the quarter, the company generated $0.90 per share in earnings. This beat estimates of $0.86 per share by $0.04.
  • Revenue Is A Miss – Unfortunately, revenue wasn’t as positive as expected. In the quarter, NKE generated revenue in the amount of $7.69 billion. While this did prove to be a year-over-year growth of 4%, the figure missed analyst expectations of $7.81 billion.

While earnings was a miss, overall, the report was positive. In a statement, Mark Parker, CEO of NKE had the following to offer:

Our strong Q2 growth and profitability show that Nike continues to drive real momentum through the category offense – by going deep with consumers by sport and serving them completely… and our powerful global portfolio of businesses, combined with strong financial discipline, continue to drive significant shareholder value…”

How The Market Is Reacting To The News

Earnings just about always proves to be a catalyst. Whether it’s positive or negative, earnings tends to cause market movement. In this case, investors are clearly excited with regard to what they saw from NKE. Currently (8:07), the stock is trading at $135.25 after a gain of 2.63% so far today.

What We Can Expect To See From NKE Moving Forward

Moving forward, I have a relatively bullish opinion with regard to what we can expect to see from Nike. In the recent report, we found out that overall Nike sales were climbing in the most important markets. In China, arguably the most important market, Nike sales climbed by 24%. Sales were up by 9% in North America. Unfortunately, sales fell by 1% in Western Europe and in Central and Eastern Europe, sales fell by 6%. Nonetheless, these declines are to be expected considering poor economic conditions we’re seeing in Europe at the moment. Ultimately, Nike is making the right moves in the right areas, leading to solid gains in earnings and investor excitement. As a result, there’s little reason to expect declines any time soon.

What Do You Think?

Where do you think NKE is headed moving forward? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

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The Coca Cola Co KO Stock News

The Coca-Cola Co (NYSE: KO)

Coca Cola has had a rough year throughout 2015. Unfortunately, more bad news outlines the fact that the company’s year in 2016 may not be much better. The rough year this year and the signs of a rough year next year revolve around health. Today, we’ll talk about why KO had such a hard time this year, the sign that next year isn’t going to be much better, and what we can expect to see moving forward.

Why KO Had Such A Hard Time In 2015

As time passes, consumers are becoming more concerned with their health. As a result, more and more people are paying close attention to what they’re putting into their bodies with the foods they eat and the drinks they drink. Unfortunately, this has proven to be very bad news for Coca Cola. Ultimately, the company’s flagship products are its carbonated soft drinks. These are drinks that are known to be incredibly bad for health. In fact, a recent Harvard study outlined the dangers of drinking soft drinks. Among other problems, they found that those who drink KO or other soft drinks on a regular basis had a 26% higher chance of developing diabetes, men had a 20% higher chance of having a heart attack, and women had a 75% higher risk of developing gout. As a result of the health risks associated with soft drinks, consumers have been consuming far less of the sugar loaded beverages than we’ve seen in the past.

A Sign That The Problems Aren’t Coming To An End

Unfortunately for Coca Cola, it doesn’t seem as though their struggles are going to come to an end. In fact, KO recently announced that it may be closing some of its factories in India, the reason being that the Indian government has proposed a “sin tax”. The tax is relatively simple to understand. Products that are considered to be a danger to society, like KO products, will be taxed an extra 40% on their sale price. If this tax goes through, sales in India will slide dramatically. As a result, KO will be shutting down quite a few factories in India.

This outlines the major problem that Coca Cola is facing, and may be a prelude to the struggles the company is likely to go through in 2016. Consumers are already consuming less soft drinks. Now, a government is getting involved. However, the Indian government isn’t likely to be the only one. Over the years, as we continue to see more health risks associated with soft drinks, I wouldn’t be surprised to see other governments taking action. Ultimately, KO is going to have to find a way to make its products more healthy before this singular issue becomes a global trend.

What We Can Expect To See Moving Forward

Moving forward, I’m not expecting to see much by way of good news out of The Coca-Cola Co. The reality is that, over the years, we’ve learned that soft drinks are incredibly bad for those that drink them on a regular basis. Between diabetes, heart disease, and other health problems, it’s easy to see why consumers have made the decision to consume less of these sugary beverages. Unfortunately for KO and its investors, I don’t see this trend changing, and now that governments are getting involved, we’re likely to see even more declines in sales. With that said, I’m expecting more bad news out of KO throughout the rest of this year and next.

What Do You Think?

Where do you think KO is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

Netflix NFLX Stock News

Netflix, Inc. (NASDAQ: NFLX)

Netflix has had a strong bullish run throughout the year. In fact, the stock recently broke its all time high before retreating. However, investors are starting to become concerned. With stiff competition coming into the industry, the question has become, “Can NFLX maintain its position at the top?” Today, we’ll talk about the competition in the premium streaming video space and whether or not investors should be worried about what’s to come for NFLX.

These New Services Are Seen As The Biggest Problems For NFLX

In the minds of investors, the biggest issue that NFLX faces moving forward is competition. Unfortunately, there are two big players that are making an effort to take the top dog position in the premium streaming video space with new programs. They include…

  • Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) – First and foremost, we have one of the biggest tech giants in the world, Alphabet Inc. The company’s streaming video service, YouTube is likely to get a makeover. YouTube Red now allows for subscription-based content and YouTube is in talks with Hollywood studios to license more of this content.
  • Amazon.com, Inc. (NASDAQ: AMZN) – Amazon Prime video has been a player in the industry for quite some time. However, the company is now working on its “Streaming Partners Program”. The new program will allow third parties to reach out to the Amazon Prime Video subscriber base.

Some investors believe that with massive tech giants making a vie for more market share in the premium streaming video space, Netflix is going to have a hard time moving forward, but is this the case?

In My Opinion NFLX Will Stay On Top!

While some may be worried about the competition in the streaming video space, I’m not at the least concerned. The reality is that NFLX has created an incredible brand for itself and is arguably the pioneer in what we now know as premium streaming video. On their brand alone, they are likely to maintain the leadership position in the space for quite some time. However, the Netflix brand isn’t the only thing the company has going for it.

While NFLX takes a dominant position in the United States, many people fail to realize that the company is doing big things world wide. Outside of the United States Netflix growth has been exponential. Now, the company is offering videos in other languages and doing more to bring in the foreign audience, a plan that’s likely to keep revenue growing and the stock price doing the same. Think about it, in the year 2015 alone, NFLX has expanded to Spain, Portugal, New Zealand, Japan, Italy and Australia. Based on the incredible performance the company has had in these companies, it would be crazy if the expansion were to come to an end. The bottom line is that NFLX wasn’t worried about the competition in the beginning because it didn’t have any, now, the company isn’t worried about the competition because it’s already miles ahead!

What Do You Think?

Where do you think NFLX is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

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Wynn Resorts WYNN Stock News

Wynn Resorts, Limited (NASDAQ: WYNN)

Wynn Resorts is having an incredible day in the market today after a big move by Steve Wynn. Wynn made the decision to purchase a massive amount of shares in his own company. Today, we’ll talk about why insider buying is important to watch, the stake Steve Wynn recently purchased in Wynn Resorts and what we can expect to see from WYNN moving forward.

Why Insider Transactions Are Important To Watch

As investors, we only know as much about a company we invest in as the insiders choose to disclose. While legalities require some information to be disclosed, we simply don’t get the full picture. Therefore, it’s important to watch insider transactions. Ultimately, when an insider makes the decision to sell a massive stake in a company, investors can expect that some kind of bad news is on the way. Adversely, when an insider makes the decision to purchase a large stake in a company, as we saw with WYNN, we can expect that good news is on the horizons.

Steve Wynn Purchases More Than 1 Million WYNN Shares

Today, we got news that Steve Wynn made a very large purchase of shares in his own company. The Chairman and CEO of Wynn Resorts unloaded $63.8 million in exchange for more than a million shares in Wynn Resorts. The purchase took place on the NASDAQ open market starting on Friday and ending on Tuesday. The shares purchased ranged in price from $62.41 to $64.44 per share and the total number of shares purchased came in at 1,003,977. This is a huge purchase that shows that Steve Wynn has faith that the struggling stock is likely to pick up soon.

How The Market Reacted To The News

Any time we see a massive insider purchase, it insinuates to investors that the insider is confident that the stock is going to climb. As a result, investors get excited and we tend to see overwhelmingly positive movement in the stock as a result. That’s exactly what we’re seeing from Wynn Resorts. Currently (10:19), WYNN is trading at $70.18 per share after a gain of $8.38 per share or 13.56%.

What We Can Expect To See From WYNN Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from WYNN. Throughout the year, China’s Macau district has been a major cause of concern for the company, causing declines that led to a 58% loss on the year. Nonetheless, I believe that we’ve seen the worst of the declines so far. While Wynn did struggle with tight regulations in China’s Macau district, those regulations are starting to weaken. We’re also seeing more gaming here in the United States and we should remember that WYNN plans on opening Wynn Palace Pin Macau in the Cotai region in China in 2016. All of this points to a stronger company with a stock that’s likely to match over the long run. All in all, WYNN seems like a great investment at the moment, especially for those looking for long run gains throughout the year 2016.

What Do You Think?

Where do you think WYNN is headed moving forward and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

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Chipotle Mexican Grill CMG Stock News

Chipotle Mexican Grill, Inc. (NYSE: CMG)

Chipotle Mexican Grill may have food that tastes amazing, but if you’re thinking about eating up their stock, you may want to put the fork down! The company is struggling… in a big way! Unfortunately, those struggles aren’t likely to end any time soon. Today, we’ll talk about why CMG is having such a hard time in the market and what we can expect to see from the stock moving forward.

Why Chipotle Mexican Grill Is Having Such A Rough Time

The issues that CMG are facing are two fold. Here are the problems that are kicking the stock down…

  • Earnings – The declines on the stock first started in October when Chipotle reported its Q3 earnings. Unfortunately, the numbers reported simply weren’t up to par. In terms of revenue, analysts expected to see CMG report $1.22 billion earned in the quarter. However, the company was only able to produce $1.20 billion. When it comes to earnings, Chipotle produced $4.59 per share, $0.04 below expectations. As a result of the poor earnings report, CMG started to fall in the market, but the problems for the stock soon got worse.
  • E. coli – There are few things that have the ability to reduce sales at a food chain at a faster rate than E. coli. The reality is that when consumers start to get sick, other consumers stop purchasing products. That’s exactly what CMG is seeing at the moment. In early November, we started to see reports of E. coli in patients that recently visited Chipotle. Soon, the number of reported incidents grew to 19. Now, we’ve seen 52 reported instances of E. coli in Chipotle customers. This issue is crossing 9 states and causing fear in the hearts of consumers who would regularly visit CMG. As a result of the issue, CMG announced on Friday that same-store sales had decreased by as much as 20%, which could affect earnings overall by between 8% and 11% in the third quarter.

How The Market Has Reacted To The News

Any time we see poor news with regard to a publicly traded company, we can expect to see declines in the value of the stock. That’s exactly what we’ve seen from CMG. Throughout the past two months, the stock has fallen by around 30%, and it doesn’t seem as though the declines are likely to come to an end any time soon. Currently (10:54), CMG is trading at $547.89 per share after a loss of $3.86 or 0.70% so far today.

What We Can Expect To See From CMG Moving Forward

In simple terms, put a fork in it! It’s done! While CMG may have been able to recover from the poor earnings report relatively quickly, when a brand is in the minds of consumers as a dangerous brand, a recovery is slow and anything but steady. The bottom line is that sales at Chipotle are likely to stay down for quite some time. This is going to weigh on future earnings reports and on the minds of investors. As a result, I’m expecting poor activity out of CMG moving forward. With the E. coli outbreak fresh in the minds of consumers, it simply doesn’t seem as though CMG is going to be able to pick up sales any time soon.

What Do You Think?

Where do you think CMG is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

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Netflix NFLX Stock News

Netflix, Inc. (NASDAQ: NFLX)

Netflix has had an incredible time in the market as of late. With the massive gains we’ve seen on the stock throughout the past year, investors are starting to ask, “Can the massive gains continue?” In my opinion, the answer is yes! Today, we’ll talk about why NFLX is likely to continue in the upward direction.

Netflix Owns Streaming Content

Netflix has built an incredible brand for itself. While companies like Amazon have tried, and been somewhat successful, I can’t think of another company that has been so successful when it comes to streaming premium content like TV shows and movies. In fact, I can remember a few years ago reading personal finance blogs that would talk about the high cost of cable and how NFLX was a great way to get around that cost. Since then, the company’s brand has grown stronger and strong, and it doesn’t seem as though that growth is going to stop.

Consumer Habits Are Changing

The only thing that seems to be consistent in life is change! No matter what we talk about, something about it is going to change over time. With that said, consumer habits with regard to the way they digest content is changing in a big way. Younger consumers are looking away from traditional cable options and looking to options like NFLX. Ultimately, consumers are starting to realize that traditional cable is expensive and far less convenient than streaming video. As a result, we’re seeing a big push to streaming premium video, an industry that Netflix seems to have a stronghold on!

The Bottom Line

The bottom line here is that NFLX is an incredible company that came into the streaming video service industry at ground zero. The company has helped to build what we know today as the streaming video industry and is enjoying the fruits of their labor as a result. Ultimately, there’s no reason to expect to see declines any time soon.

NFLX Analysis

 Out of 25 analysts covering Netflix (NASDAQ:NFLX), 20 rate it “Buy”, 0 “Sell”, while 5 “Hold”. This means 80% are positive. $175 is the highest target while $72 is the lowest. The $132.72 average target is 0.86% above today’s ($131.59) stock price. Netflix was the topic in 36 analyst reports since August 4, 2015 according to StockzIntelligence Inc. Topeka Capital Markets maintained the stock on November 16 with “Buy” rating. BMO Capital Markets initiated it with “Market Perform” rating and $115 target price in an October 9 report. Oppenheimer maintained the shares of NFLX in a report on October 15 with “Outperform” rating. Vetr upgraded the firm’s rating on September 1. Vetr has “Hold” rating and $122.24 price target. Finally, JP Morgan maintained the stock with “Overweight” rating in an October 15 report.

The institutional sentiment increased to 1.25 in Q2 2015. Its up 0.10, from 1.15 in 2015Q1. The ratio improved, as 54 funds sold all Netflix, Inc. shares owned while 178 reduced positions. 109 funds bought stakes while 182 increased positions. They now own 54.12 million shares or 35.64% less from 84.09 million shares in 2015Q1.

Technology Crossover Management Vii Ltd. holds 40.06% of its portfolio in Netflix, Inc. for 1.01 million shares. Srs Investment Management Llc owns 1.46 million shares or 28.81% of their US portfolio. Moreover, Barton Investment Management has 27.36% invested in the company for 117,690 shares. The New York-based Teewinot Capital Advisers L.L.C. has invested 21.96% in the stock. Tiger Global Management Llc, a New York-based fund reported 2.57 million shares.

Since February 25, 2015, the stock had 0 buys, and 27 sales for $102.38 million net activity. Barton Richard N sold 2,800 shares worth $281,260. Hastings Reed sold 86,037 shares worth $8.68 million. Battle A George sold 49,000 shares worth $5.29 million. Cranz Tawni sold 1,512 shares worth $190,179. The insider Peters Gregory K sold 6,545 shares worth $841,491.

Netflix, Inc. is a provider of Internet television network. The company has a market cap of $55.57 billion. The Firm has over 57 million streaming members in over 50 countries. It has 350.9 P/E ratio. The Company’s members can watch more than two billion hours of television shows and movies per month, including original series, documentaries and feature films on Internet-connected screen.

What Do You Think?

Where do you think NFLX is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

SunEdison SUNE Stock News

Sunedison Inc (NYSE: SUNE)

Sunedison is headed down a downward spiral, and all signs point to a continuation of the trend. As one hedge fund dumps the stock and the other denies investment plans, investors are quickly abandoning the solar power giant. Today, we’ll talk about what we’ve seen from hedge funds with regard to SUNE, why there’s such a bearish cloud hanging over the stock, and what we can expect to see moving forward.

Greenlight Capital Founder Dumps SUNE

One of the reasons we’re seeing such bearish activity around SUNE is the fact that Greenlight Capital founder, David Einhorn, has decided to dump a large percentage of his stake in SUNE. In the last quarter, Einhorn sold more than 6.2 million shares, cutting his stake in the company by around 25%. Because Einhorn is such an influential member on Wall Street, it comes as no surprise that investors are following his lead and dumping their shares as well.

Blackstone Group Rumors Prove To Be False

One of the factors that had slowed the decline in the value of SUNE, at least to some extent, was that Blackstone Group’s GSO credit investment department was planning on investing a large amount of money into the company. However, Blackstone announced yesterday that SUNE is not an investment it intends on making, proving that the rumors were false. The ultimate hope here was that the new investment from Blackstone would help the company to support the massive debt load. Unfortunately, that proved to be untrue, leading current investors to consider that SUNE may be headed for bankruptcy.

Bank of America Doesn’t See Bankruptcy In The Running, But Does See Problems

In a research note released yesterday, Bank of America/Merrill Lynch weighed in with their opinion on SUNE. While the bank may have put bankruptcy concerns to rest, they do believe that SUNE is in a bit of trouble financially. Here’s what Bank of America/Merrill Lynch said about the company:

Management is throttling growth… We do not forecast a bankruptcy outcome, but acknowledge there are equity sentiment, macro, financial and policy risk factors beyond management’s control.”

What We’ve Seen From SUNE Recently

SUNE is having an incredibly hard time keeping up in the market. As a matter of fact, the stock has produced one of the largest plunges we’ve seen in the market this year. On July 20th, SUNE was trading at around $31.00 per share. Currently, the stock is trading at under $3.00 per share, proving a decline of more than 90%. Unfortunately, that decline is continuing today and we are likely to see more movement in the negative direction, at least in the near future.

What We Can Expect To See Moving Forward

Ultimately, I’m expecting to see more declines out of SunEdison. Unfortunately, the company has a huge debt problem to contend with. While Bank of America doesn’t believe that the problem will end in bankruptcy, I’m not so convinced. At this point, I believe that investors are going to continue dumping SUNE until the company comes up with a plan to resolve the debt issue, and that’s likely to take some time.

What Do You Think?

Where do you think SUNE is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

The Coca Cola Co KO Stock news

The Coca-Cola Co (NYSE: KO)

Bill Ackman recently brought Coca-Cola into a celebrity investor feud, making some investors feel as though KO may be his next target. Bill Ackman is a activist investor that’s known for knocking stocks down a notch when he feels as though the company is running immorally. In a recent spat with Charlie Munger, Ackman attacked KO. Today, we’ll talk about the celebrity investor feud, Bill Ackman’s history, and whether or not Ackman is likely to move to attack The Coca-Cola Co.

Bill Ackman And Charlie Munger Clearly Don’t See Eye To Eye

The feud between these two celebrity investors started with Charlie Munger. In a statement, Munger explained his disappointment with Valeant Pharmaceuticals (NYSE: VRX). In his statement, Munger explained that the practices the company has followed with regard to raising the prices of its drugs have been “deeply immoral”. Ackman didn’t like this statement because he is currently heavily invested in VRX. As a result, he decided to fire back by attacking one of Munger’s larger investments, Coca-Cola. In his statement, he explained that KO, in his opinion is “deeply immoral”. Firing back at Munger, Ackman said that Coca-Coal “does enormous danger to society” by displacing “water children consume with sugar water”. Following these statement, investors are starting to wonder if Ackman will act on these statements by purchasing enormous short positions in the stock.

Ackman Has A History Of Attacking Stocks That He Feels Are Immoral

As an activist investor, Ackman has a history of driving the values of “immoral” stocks down. To do so, he purchases massive short positions. In doing this, he truly believes that he is making the world a better place. There’s one thing in his history that has been incredibly clear; He only fires shots at stocks when he has evidence of their wrong doing. This has been seen in his attacks of JCPenny, Herbalife and more, and is an important fact to keep in mind with regard to the question of whether or not he will attack KO with a massive short position.

I Don’t Think Ackman Will Be Shorting KO Any Time Soon

Ackman’s comments with regard to KO are based in fact and his views on the company are becoming the overwhelming consumer view of the company. There’s no denying the fact that consumers are paying more attention to health than ever before, leading to issues for The Coca-Cola Co. However, it’s important to keep in mind here that while KO may be immoral in the views of some, the company has not broken any laws. More importantly, KO has been incredibly generous to its share holders. With that said, I don’t think that Ackman will be buying any short positions in the stock any time soon. The reality is that while Ackman may not like the company’s products, he’s not buying short positions in big tobacco either. What he focuses most on in his activism is companies that are doing the wrong thing either legally or with regard to their shareholders, and when it comes to Coca-Cola, neither of these is true!

Is There Anything To Be Worried About With KO

There’s no doubt in my mind that KO is likely headed for more hard times. However, that’s the result of changes in consumer habits. I don’t think investors have anything to worry about with regard to an attack by Ackman.

What Do You Think?

Do you think Ackman will attack KO with a massive short position? Let us know your opinion in the comments below!

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