Sluggish home furnishing sales in January has helped to keep Pier 1 Imports Inc.’s (NYSE: PIR) stock volume and value on a downward trend, but that could be ending soon.
For the first time in three months, retail sales increased on a month-over-month basis rather than decreasing, according to a Mar. 13 report released by the Commerce Department. Retail sales totaled $427.2 billion last month, an increase of 0.3 percent from January’s figure, which the report downwardly revised to a 0.6 percent drop. Some industry experts contend this is just the beginning of a retail spring thaw that will see consumers opening their pocketbooks even wider to satisfy their pent-up desire to shop.
Perhaps Pier 1 sees the same thing.
At a time when most retail chains are closing down stores, the Fort Worth, Texas-based retailer is expanding its presence in Hawaii by opening its seventh store on Oahu, according to Pacific Business News.
Once it opens the new store, the Fort Worth, Texas-based retailer will have a total of four stores on Oahu with two in Kailua and Perl City. It also has a store on Mai and the Big Island and plans to open a store in Kauai later this year.
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From a Penny Stock to the New York Stock Exchange
This is just the latest example proving that Pier 1 has come a long way from when it was just another struggling penny stock. But the reality is that it wasn’t too long ago when Pier1’s very existence was a big question mark.
The company’s stock value that had reached $25 in November 2003 tumbled to a meager 11 cents per share on March 13, 2009. Despite this, the company never filed for bankruptcy and an improving economy, housing market and a rising stock market have sent its stock surging to its old highs again.
Still, during the holiday selling season, Pier 1 did along with many other retailers did poorly. Its CEO Alex W. Smith blamed continued slow traffic caused by wintry weather for the pitiful 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 becomes the real deal. So far, it looks like that could happen. 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.
Shares of Pier 1 Imports have received an average recommendation of “Hold” from the 14 ratings firms that are covering the company, StockRatingsNetwork reports. Two analysts have rated the stock with a “sell” recommendation, three have assigned a” hold “recommendation and six have assigned a “buy” recommendation to the company. The average 12-month target price among brokerages that have updated their coverage on the stock in the last year is $18.49.
On Mar. 13, PIR’s share price closed at $19.09, down 13 cents from its close of $19.22 the previous day, on volume of 924,564 shares.
Monster Beverage Share Volume Soaring
In other news, Monster Beverage Corp. (NASDAQ:MNST) stock volume soared Mar. 13, with 2,071,440 changing hands, significantly higher than its three-month average volume of 1,554,236 shares.
The uptick in volume is in part a residual effect of the Corona, Calif.-beverage company’s strong fourth quarter financials, according to some industry experts.
2013 Fourth Quarter
Monster Beverage’s recently reported net income for the fourth quarter was $76.1 million, up 12% from $68 million in the comparable 2012 quarter. However, the company’s 12-month net income was flat coming in at $338.7 million compared with $340 million for the 12 months ending 2012.
Here’s the full breakdown:
Gross sales for the 2013 fourth quarter increased 14.0 percent to $621.1 million from $545.0 million in the same period last year. Net sales for the three-months ended December 31, 2013 increased 14.7 percent to $540.8 million from $471.5 million a year ago.
Gross profit, as a percentage of net sales, for the 2013 fourth quarter was 51.2 percent, compared with 51.7 percent for the comparable 2012 quarter. The 2013 fourth quarter gross profit was impacted by certain inventory damages and reserves. Operating expenses for the 2013 fourth quarter increased to $142.4 million from $130.0 million in the same quarter last year.
Distribution costs as a percentage of net sales were 4.5 percent for the 2013 fourth quarter, compared with 4.7 percent in the same quarter last year.
Selling expenses as a percentage of net sales were 10.8 percent for the 2013 fourth quarter, compared with 12.5 percent in the same quarter a year ago.
General and administrative expenses for the 2013 fourth quarter were $59.6 million, or 11.0 percent of net sales, compared with $48.8 million, or 10.3 percent of net sales, for the corresponding quarter last year. Stock-based compensation (a non-cash item) was $7.2 million in the fourth quarter of 2013, compared with $6.8 million for the fourth quarter of 2012.
Operating income for the 2013 fourth quarter increased 18.3 percent to $134.8 million from $113.9 million in the comparable 2012 quarter.
The effective tax rate for the 2013 fourth quarter was 42.2 percent, compared with 39.1 percent in the same quarter last year. The increase in the effective tax rate was primarily the result of the establishment of a full valuation allowance against the deferred tax assets of certain foreign subsidiaries, as well as losses in certain foreign subsidiaries for which no tax benefit is recorded.
Net income for the 2013 fourth quarter increased 12.0 percent to $76.1 million from $68.0 million in the same quarter last year. Net income per diluted share increased 13.7 percent to $0.44 from $0.39 per diluted share in the 2012 comparable quarter.
Net sales for the Company's DSD segment for the 2013 fourth quarter increased 15.2 percent to $519.4 million from $451.0 million for the same period in 2012.
Gross sales to customers outside the United States rose to $137.9 million in the 2013 fourth quarter, compared with $115.2 million in the corresponding quarter in 2012.
During the 2013 fourth quarter, the Company purchased approximately 1.0 million shares of its common stock at an average purchase price of $56.98 per share pursuant to the share repurchase program previously authorized by the Board of Directors in April 2013.
2013 Fiscal Year
For the 2013 fiscal year, gross sales increased 9.0 percent to $2.6 billion from $2.4 billion a year earlier. Net sales for the year ended December 31, 2013 increased 9.0 percent to $2.2 billion from $2.1 billion a year ago.
Gross profit as a percentage of net sales was 52.2 percent for the year ended December 31, 2013, compared with 51.7 percent a year earlier.
Operating expenses for the year ended December 31, 2013 increased 16.5 percent to $600.0 million from $515.0 million a year ago. Operating income for the year ended December 31, 2013 increased 4.0 percent to $572.9 million from $550.6 million a year ago.
Net income for the 2013 fiscal year was $338.7 million, compared to $340.0 million a year ago. Net income per diluted share increased to $1.95 from $1.86 per diluted share for 2012.
Monster’s Humble Beginnings as a Penny Stock
While Monster’s results were disappointing to some analysts and shareholders, the company has come a long way since its days of being a penny stock.
On Dec. 29, 1995 Monster, then known as Hansen Natural, closed at 69 cents a share. On Feb. 6, 2014, Monster’s shares closed at 68.02 a share, up $1.37 from the closing price of $66.65 the previous day. Its volume was 1,586,263 shares, slightly higher than its three-month average of 1,586,263
Did you know for example that the super-hip, trendy beverage company is not a new company, but has been around since 1935? So what in the world happened, and how could a penny stock investor have recognized that this obscure company would one day evolve and change its name to Monster in 2012?
Part of the answer is being at the right place with the right product at the right time. For more than a decade energy drinks popularity has grown beyond anyone’s wildest dreams.
Energy Drink Consumption Growing Faster than Coffee and Soda
In 2012, Americans spend $8.3 billion on energy drinks, up 16.6% from the same period in 2011, according to data from Euromonitor. Over the last 10 years the energy-drink sector has been enjoying double-digit growth, according to Beverage Digest. If you had been an observant penny-stock investor, you might have noticed this trend when it began and invested heavily in Monster.
Still, with the mounting popularity of energy drinks, comes the reality of investigations and ultimately lawsuits and government regulation. While at this point none of the allegations against Monster specifically and energy drinks in general have been validated, there is always a possibility they will be. This is a risk factor that every investor should consider as part of his or her investment strategy.
On Mar. 13, MNST's share price closed at $ 70.15, down $3.13 from its closing price of $73.28 the previous day.
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Sirius Stock Volume and Value Flat
Meanwhile, Sirius XM Holdings Inc. (NASDAQ: SIRI) share price has been flat over the last 30 days, with little good or bad news being circulated about the company.
Of the 9 analysts that cover Sirius, 4 recommend a “strong buy,” 4 a “hold” and 1 a “sell.”
Even with such a mixed review, the New York-based satellite-radio provider has come a long, long way from the time its share price crashed at 5 cents in February of 2009.
Sirius’ total recovery was evident in its fourth-quarter and full-year 2013 earnings reported on Feb. 4, 2014.
The company generated record revenue of $1.0 billion and $3.8 billion in the fourth quarter and full-year, respectively, each up 12%. Net income for the fourth quarter and full-year were $65 million and $377 million, respectively, or $0.01 and $0.06 per diluted common share, respectively.
Income from operations was $245 million and $1.0 billion in the fourth quarter and full-year 2013, respectively. Adjusted EBITDA increased 41% in the fourth quarter to a record $326 million. Full-year 2013 adjusted EBITDA was $1.17 billion, an increase of 27% from $920 million in 2012.
Potential Lawsuits Not Hurting SIRI
Despite a myriad of law-firm of Sirius XM for potential stockholder claims as a result of the satellite-radio investigations 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.
On Mar. 13, SIRI’s share price closed at $3.3, down 2 cents from its closing price of $3.37 the previous day on volume of 46,920,424 shares.
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Concur Technologies Shares Sliding Downward
Finally, Concur Technologies Inc. (NASDAQ: CNQR) stock volume soared Mar. 13, with 727,853 shares changing hands, substantially higher than its three-month average of 626,409 shares.
The uptick in volume comes at the same time Redmond, Wash.-based expense management software company’s stock has been sliding downward. On Feb. 27, CNCQ share price was $127.99, while on Mar. 13, it share price closed at $106.68, down $4.94 from its closing price of $111.62 the previous day.
While there has been no positive or negative news about the company, its share value momentum is currently negative.
Of the 16 analysts that cover Concur, 6 recommend a “strong buy,” 1 a “buy,” 6 a “hold,” 1 an “underperform” and 2 a “sell.”
First Quarter Results
On Jan 29, Concur reported its fiscal 2014 results, which were positive.
The company reported total GAAP revenue for the first quarter of fiscal 2014 of $163.1 million. Excluding revenue from businesses that the company intends to divest, non-GAAP revenue for the first quarter of 2014 was $160.3 million, up 31% from the year-ago quarter and up 4% from the prior quarter. GAAP net loss attributable to Concur for the first quarter of fiscal 2014 was $24.2 million, or $0.43 per share. Fiscal 2014 first quarter non-GAAP pretax income was $12.4 million, or $0.21 per share.
"We kicked off fiscal 2014 with a strong first quarter in which we exceeded expectations for revenue, earnings, cash flow from operations and free cash flow. New customer growth remains very robust as more than 1,000 new customers joined the Concur family,” said Steve Singh, Chairman and CEO of Concur, in a written statement
But it wasn’t always this way.
Remember the tech bubble of 1999?
Concur, with a 52-week high of $114.32 at the time, crashed along with the market when its share price hit a bottom on Mar. 30, 2001 of 31 cents.
Overnight it became a penny stock, most investors totally wrote off.
If you have been one of the insightful ones, who invested just $1,000 into it when it hit its low, your $1,000 would have grown to $411,129 today.
Concur clawed its way back to the top because it had created and continued to improve a quality service that was in demand. Even when it was a penny stock, Concur’s basic value proposition remained solid.
Results speak loudly
In 2013, the company reported it had about 4,000 clients using its travel-and-expense management services that generated nearly $1 billion annual revenue. In a recent interview, Concur’s chief executive officer Rajeev Singh said the company is expanding its services to the consumer market.
Find out what could be the best investor’s move when it comes to CNQR by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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