Sunday, December 9, 2012

Monday Stocks To Watch: (MW) Bad News is Priced In (GRPN) Soars on (GOOG) Potential Bid

 (MW) Barron's -  Hey There, Handsome Dec 8 at 00:08

     Shares of Men's Wearhouse came apart at the seams last week after the retailer of men's tailored clothing reported disappointing third-quarter earnings and sharply reduced its fourth-quarter and full-year profit guidance. The stock opened 12.5% lower on Thursday morning, and ended the week off 6%, at $30.48.  
     Don't believe us? Prices for men's apparel have climbed by more than in any year since the late 1980s, an indication of strong demand. And department stores such as Macy's (ticker: M) and Nordstrom (JWN) have said men's clothing is among their fastest-growing departments.
      What's more, the bad news seems fully reflected in the company's shares
(MW). After its dressing-down, Men's Wearhouse trades for just 10.3 times estimated earnings of $2.97 a share for the fiscal year ending January 2014. That's well below other specialty-apparel chains and near the bottom of the company's historic valuation range. Back out $2.71 in net cash per share, and the price/ earnings ratio is even lower. If traffic rebounds next year, as expected, the shares could rally 25%, to $38. Investors can console themselves with a 2.4% dividend yield while they wait.

 (GRPN) Barron's Blog/Tech Trader Daily: GRPN Soars 23%: Google Might Consider a Bid, Says Bloomberg Dec 7 at 19:46

      Could the $6 billion deal that never happened be back on the table?       Bloomberg's Douglas MacMillan this afternoon writes that the rise today in Groupon ( GRPN) shares of 88 cents, or 23%, to $4.69 was prompted by rumors that Google ( GOOG) might consider bidding for the company, citing remarks by Tom Forte of Telsey Advisor Group.
      Google and Groupon representatives declined to comment to MacMillan, he notes.
      Groupon also, apparently, canceled an upcoming appearance at an investment conference hosted by Sterne Agee, it was reported earlier today by wire services.
      Google was rumored to be shopping for Groupon two years ago, and willing to pay $6 billion, but was ultimately rebuffed by Groupon before the e-commerce company went public, according to press reports at the time.
      Google shares ended the day down $6.92, or 1%, at $684.21.


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