The one-time penny stock Pier 1 Imports Inc. (NYSE: PIR) needs a strong housing recovery and an equally strong surge in its online sales to catapult it out of its end-of-the-year doldrums, keeping it from once again sliding into financial oblivion.
The mortgage meltdown kicked Pier 1 in its financial teeth, decimating its stock value that had reached $25 in November 2003. On March 13, 2009, Pier 1 shares hit a low of 11 cents. Despite this, the company never filed for bankruptcy and an improving economy, housing market and a rising stock market have sent its stock soaring to its former highs.
Still, like so many other retailers, Pier 1 Imports Inc. (NYSE: PIR) suffered a disasteroous holiday selling season. Its CEO Alex W. Smith blamed continued slow traffic caused by wintry weather for the lethargic 1.3% increase in same store sales for the five-week period ended Jan. 4, 2014, compared to the five-week period ended Jan. 5, 2013.
That's why it's increasingly critical that the 2014 housing recovery doesn't fizzle but continues to heat up to a white hot sizzle, creating a strong demand for the decorative accessories, housewares, seasonal products, furniture and candles Pier 1 sells.
So far, there are some good market omens, and more importantly, mounting evidence that the 2013 partial housing recovery was more than a false start. Here are just three of them:
- Fannie Mae's positive outlook for the 2014 housing market in a Jan. 13 statement by its Chief Economist Doug Duncan: "Despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, all of which bodes well for continued but measured housing recovery in 2014," Duncan said in a written statement.
- New homes are staying on the market for an average of 3.1 months before being sold, far less time than the average 5.5-month average for the last 30 years.
- A recent report by Wash.-D.C. financial publisher Kiplinger is forecasting that new-home sales are likely to soar by a solid 15% or 500,000 in 2014.
Online channel increasingly important
An increasingly stronger online presence could also help turbocharge Pier 1's sluggish sales. The company witnessed the growing importance of its popular Web site Pier1.com when the ecommerce site ended up accounting for about 4% of the company's total December sales.
The good news is that the outlook for online sales is much better than it was in 2013. In 2014, ecommerce sales will soar to nearly $250 billion, up from $155 billion in 2009, according to Cambridge-Mass research firm Forrester. Last year, online retail sales were up a healthy 11 percent, compared to 2.5 percent for all retail sales.
On Jan. 23, PIR's share price closed at $20.14, up 9 cents from its close of $ 20.05 the previous day on a volume of 982,230 shares.
Find out what could be the best investor's move when it comes to PIR by getting the complete report here, or by cutting and pasting the following link in your Web browser:
Another penny stock making good
Sirius XM Holdings Inc. (NASDAQ: SIRI) has come a long way since its stock price cratered at 5 cents per share in February of 2009.
Despite a myriad of law-firm investigations of Sirius XM for potential stockholder claims as a result of the satellite-radio company's proposed acquisition by Liberty Media Corp., its stock price is holding its own.
On Jan. 3, 2014, Liberty Media make an offer to buy Sirius for about $10.4 billion at a rate of $3.68 per share. The deal involves creating a new class of stock called Series C, adding 0.076 per share to give the company a total market value of as much as $27 billion.
Although the pending acquisition has triggered a slew of potential stockholder lawsuits, without Liberty Media, Sirius XM might not have been here today.
That's because in 2009, Liberty Media kept Sirius XM from going bankrupt with a $530 million loan. As a result, Sirius XM has been able to build a subscriber base 25.6 million strong. It's done so with a line-up of paid-radio choices including classical, rock, alternative, country, sports and live concerts, including the extremely-popular morning man Howard Stern serving as the company's anchor. Moreover, having new cars equipped with XM receivers has also boosted the company's popularity and acceptability. However, Sirius XM still faces brutal competition from such digital radio competitors as Pandora Media Inc., AOLRadio and Apple Inc.
Its share price closed at $3.72, down 2 cents from its closing price of $ 3.74 the previous day on volume of 30,719,700 shares.
Find out what could be the best investor's move when it comes to SIRI by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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