A humorous look at the companies that caught our eye, for better or worse, this week
Johnson & Johnson (DOG)
Shares of Johnson & Johnson just kept falling & falling on Friday. Normally one of the stock market’s less volatile names, the health-care giant suffered its biggest drop in 16 years, hammered by a Reuters report alleging that J&J has known for decades that its baby powder contained asbestos. With the company already dogged by lawsuits alleging its baby powder causes cancer – a claim it strenuously denies – J&J investors are losing more & more money.
North West Co. (STAR)
Business quiz! Shares of North West Co., which operates retail stores in Northern Canada and other locations, rose after: a) A mysterious bearded man in a red suit placed a large order for merchandise; b) Melting Arctic ice opened up a new all-season shipping lane, reducing North West’s transportation costs; c) The company posted sales growth of 5 per cent – beating analyst estimates of 2 per cent – helped by a recovery at stores in the Caribbean that were hit by hurricanes in the year-earlier period. Answer: c.
Signet Jewelers (DOG)
Those smiling couples in holiday jewellery commercials sure look happy. Jewellery investors? Not so much. Shares of Signet Jewelers have been sinking like a stone since the owner of Kay, Zales, Peoples and other bauble chains announced third-quarter results, including a loss of US$29.9-million, or 74 US cents a share. As competition from department stores heats up and Signet turns to promotions to drive holiday sales, profit margins could come under pressure in the fourth quarter, Signet chief executive Virginia Drosos warned on the conference call. Bah humbug.
Under Armour (DOG)
You know when your favourite team is making a comeback and then, with seconds left, the other team scores to put the game away? Under Armour investors can relate: Shares of the athletic-apparel maker had been rebounding this year after the company cut underperforming product lines and took other steps to turn around the business, but the stock plunged again this week after Under Armour gave a disappointing long-term outlook. With the company expecting North American revenue to rise by only low single digits from 2020 to 2023, investors are giving up on this underdog.
Just Energy (DOG)
Just Energy’s stock just got the energy sucked out of it. After shares of the gas and electricity retailer posted a total return of about 40 per cent over the previous three months, RBC analyst Nelson Ng cut his rating on the company to “sector perform” from “outperform." Even as Mr. Ng raised his price target to $5.50 from $5 to reflect the addition of high-margin customers and expectations the company will meet its 2019 EBITDA guidance, Just Energy investors just felt that now was a good time to sell. Just speculating.
John Heinzl