Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines.
Stock number one: Facebook, Inc.
Facebook-WhatsApp Fallout—The Street.com and Doug Kass
The beta earthquake that recently produced a return to Earth of the anointed, high-growth market leaders' stock prices has only begun to bring back reality into the markets. The earthquake also revealed (and is a constant reminder of) the idiocy and irrational behavior of managements when the markets allow them to be relieved of common sense. Case in point: Facebook's acquisition of WhatsApp. To remind everyone, Facebook acquired WhatsApp for $19 billion in February. In my view, the acquisition will eventually be known as the second worst in history -- only rivaled by the 2000 merger between AOL (AOL) and Time Warner (TWX).
Trailing PE: 76; Forward PE: 32
Estimate Trend: Up
Ransom Note Trendline: Buy Facebook
<a href="http://ycharts.com/companies/FB/chart/#/?startDate=&endDate=&format=real&calcs=include:true,id:price,,&zoom=1&securities=include:true,id:FB,,"es=true&units=&maxPoints=650&splitType=single"><img src="http://media.ycharts.com/charts/898b3a861f201afd673416e0902b1724.png" alt="FB Chart" /></a><p style="font-size: 10px;"><a href="http://ycharts.com/companies/FB">FB</a> data by <a href="http://ycharts.com">YCharts</a></p>
Stock number two: J. C. Penney Company, Inc.
JC Penney: Good Bye ‘Miss & Lower,’ Hello Easy Beats—Barron's
JC Penney (JCP), among the worst performing department-store stocks this year, is playing catchup today after its rating was hiked at UBS. Shares of JC Penney had dropped 12% this year at yesterday’s close, lagging the 5.1% decline in Kohl’s (KSS) 5.1% decline, the 2.3% fall in Dillard’s (DDS) and the 1.9% dip in Nordstrom (JWN). And please don’t mention Macy’s (M), which had gained 3.2% so far in 2014.
Trailing PE: NA; Forward PE: NA
Estimate Trend: Flat
Ransom Note Trendline: Avoid JC Penny
Stock number three: Tesla Motors, Inc.
Tesla's big gamble in China--Fortune
The salesman in Tesla's only showroom in mainland China (or what the company likes to call "experience center") says the rich people who travel from all over the country to see the gleaming Model S react the same way when they hear the $118,000 price tag: "Wow." As in: Wow!That's cheap. This is the opportunity Tesla Motors (TSLA)hopes to captialize on when its executives says China will become its largest market in just a couple years.
Trailing PE: NA; Forward PE: 49
Estimate Trend: Up