A humorous look at the companies that caught our eye, for better or worse, this week.
TransCanada
TRP (TSX)
Sep. 19, 2014 close: $61.38
up $1.90 or 3.2% over week
The three words that warm the heart of every investor: activist hedge fund. Even as pipeline operator and power producer TransCanada has been delivering solid returns, some U.S. hedge funds evidently think they can squeeze more value out of the company: Reports that Third Point LLC is among those reviewing TransCanada for a possible breakup sent the shares to a record, and other pipeline stocks went along for the ride.
Pier 1 Imports
PIR (NYSE)
Sep. 19, 2014 close: $12.74 (U.S.)
down $2.19 or 14.7% over week
Bad idea: Taking a long walk on a short pier.
Equally bad idea: Investing in Pier 1.
The stock plunged into the drink after the furniture and home decor retailer’s second-quarter earnings sank 48 per cent, hammered by heavy promotions that boosted sales but sacrificed profit. With Pier 1 cutting its full-year forecast for a second time, CEO Alex Smith says the company “overreacted … in terms of promotional activity.” You don’t say.
Peabody Energy
BTU (NYSE)
Sep. 19, 2014 close: $13.29 (U.S.)
down $1.15 or 8% over week
Everyone knows that coal is bad for the environment. Turns out it’s bad for your investment portfolio, too. Peabody Energy plunged after Goldman Sachs and Nomura both slapped “sell” ratings on the coal miner, citing a weak outlook for the commodity as gas-fired generating plants replace older, dirtier coal facilities. With the stock down about 80 per cent from its 2011 peak, shareholders who stuck with this clunker are covered in black soot.
Dow Jones industrial average
DJIA
Sep. 19, 2014 close: 17,279.74
up 292.23 or 1.7% over week
There once was a banker named Yellen
Whose comments this week were quite tellin’
With “considerable time”
Until rates start to climb
The stock market kept on excellin’.
Rite Aid
RAD (NYSE)
Sep. 19, 2014 close: $5.35 (U.S.)
down $1.20 or 18.3% over week
Rite Aid was the wrong stock for investors this week. Even as the third-largest U.S. drugstore chain posted second-quarter revenue and earnings above analyst expectations, the company slashed its full-year guidance for the second time this year, citing manufacturing delays and lower reimbursement rates on generic drugs. Side effects of investing in this company include nausea, vomiting and large financial losses.