Tuesday, September 14, 2010

Earnings Update: Day Full of Surprises

***"Stock of the Month" update*** Huge 5% movement in the "Stock of the Month", Balchem Corp (BCPC) today.  The company was upgraded by an analyst at Sidoti.  The upgrade was from neutral to buy and the current price target was send from $27 to $33.  If you bought BCPC back when I recommended it as "Stock of the Month" you have made 10% already.  Check back for more updates.

Today we say two very surprising earnings releases by Best Buy (BBY) and Kroger (KR). 

BBY: 2Q net income skyrocketed 60%!  Thanks to their expanding cell phone business.  CEO Brian Dunn says that Best Buy Mobile is "the single biggest driver of profit growth for us this year".  This is huge and the stock rocketed up 6% today.  Analysts are expecting a good Christmas this year especially with the new, highly anticipated 3D gaming additions for the Xbox 360 and Playstation 3 coming out. 

Invest Chief is behind BBY and we do believe that they will have a good Christmas and their cell phone business will continue to grow.  The 3D gaming should help boost profit and growth.  Not to mention, Best Buy has added an additional 110 stores so far in 2010, with the plan to add another 50 before 2011.  I am a buyer of Best Buy and this could be a sign that consumers may be starting to buy again.

KR: reported a net income of $261.6 million, or 41 cents a share.  The stock finished up 1%.  The company was profitable because of "customer loyalty" but when you get down to the numbers it was a tax break and low interest costs. 

Invest Chief is still bearish on Kroger simply because Kroger champions themselves as a "high end" grocery store.  Now with 9.7% unemployment and consumer spending down, it doesn't make Kroger a huge target for growth or huge profits.  Not to mention the rising cost of food will soon take a chunk out of Kroger.  I would stay away from Kroger until conditions improve.  I recommend Nov In-the-money Puts.

Next earnings update will be on Thursday, it should be an interesting day. 

A few people have bought the recommended book of the month: Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market by: Gil Morales, Chris Kacher

Buy it today, it is a good read and you get another trading system that has huge potential to profit.  Buy it in the link I provide below!  Thank you!

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