Welcome to John Ransom's Stocks In The News, where the headline meets the trendline.
Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.
Stock number one is:
Cirrus Logic Inc., (SYMBOL: CRUS) and the headline says:
Cirrus Logic Announces Preliminary Fourth Quarter Results(Dow Jones)
Cirrus Logic Inc., a developer of integrated circuit technology, preannounced unaudited fourth quarter revenue of $206.9 million. Unexpectedly, Cirrus will record a net inventory reserve of $23.3 million, as a key customer shifted its focus to a new Cirrus product, negatively affecting gross margins.
The company expects gross margins to rebound in the next quarter. Final fourth quarter results will be posted April 25, after the close.
Cirrus shares tripled in value in 2012, from $16 to $45, then began a freefall in September. The stock has not yet formed a base, and has lost almost its entire 2012 gains.
Our Ransom Note trendline says: AVOID CIRRUS LOGIC.
Stock number two is:
Bank of America Corp., (SYMBOL: BAC) and the headline says:
BofA Misses Estimates as Mortgage Banking Weighs on Results(Bloomberg)
“Bank of America Corp. reported first-quarter profit that missed analysts’ estimates as lower mortgage banking income and higher legal costs slowed the firm’s turnaround,” reports Bloomberg. BofA reported 20 cents per share vs. an expected 23 cents. Fixed income trading revenues were also lower than expected, while equity and investment banking revenue numbers came in favorably.
Citi Research commented, “progress has been made with divestitures and cost cuts. However, the focus is shifting to earnings power and we believe it will take time for some of the earnings drivers to materialize.”
CEO Brian Moynihan is making big gains at solving balance sheet problems at BofA, and earnings per share are projected to grow rapidly from here on in. We suggested holding the stock on April 3. Shareholders should be prepared for price resistance at $15.
Our Ransom Note trendline says: HOLD BANK OF AMERICA.
Stock number three is:
Target Corp., (SYMBOL: TGT) and the headline says:
Target’s first-quarter forecast gets a little more gloomy(Minneapolis Star Tribune)
Target Corp. has lowered 1Q sales and earnings guidance to Wall Street, while maintaining expectations on full-year numbers. March weather was very unfavorable for Spring merchandise sales. Same store sales are expected to be flat for the quarter, and up 2.4% for the year.
Morgan Stanley Research has a Buy rating on the stock, and comments, “we expect the home category to perform well in 2013.“ On Feb. 27, we told investors to avoid Target Corp. after a poor 4th quarter earnings report and very low earnings growth projections for 2013. Longer-term, earnings are projected to resume robust growth.
The stock price is up against long-term resistance in the upper $60’s. Current shareholders should use stop-loss orders to protect profits.
Our Ransom Note trendline says: HOLD TARGET SHARES.