Diamonds and Dogs
5/23/12Dell Inc. (DELL)
Dell was a sell today, down 17.18% at $12.49. The company saw its worst day in over eleven years, the stocks last time down this much was in November 2000. Dell forecasted revenue of $14.7 billion to $15 billion in the current quarter, well short of analysts' average forecast of $15.4 billion. PC sales have been down significantly due to Apple gaining more and more consumers with their products, such as the iPad. In order to increase revenue Dell has been focusing more on sales to small and medium businesses rather than average consumers. BMO Capital Markets analyst Keith Bachman said, "While we think that Dell's story of improving mix is still valid, it will take a long time to play out." Furthermore the poor results have led numerous analysts to lower this price targets. BMO Capital Markets analyst Jung Pak cut the price target on the stock to $16 from $18. Also, JPMorgan Securities analyst Mark Moskowitz cut his price target to $19 from $21.
PetSmart Inc. (PETM)
PetSmart Inc. was a smart buy today as it was up 13.12% at $62.92. This marks the biggest daily percentage gain since July 2002. The company reported a better than expected first-quarter profit and raised its outlook for the year. PetSmart posted a 7.4% increase in same-store sales in the first quarter. Furthermore, this increase of comparable sales gain was the highest since the first quarter of 2004 and at least its 53rd straight quarterly increase. PetSmart profit rose to $94.7 million or 85 cents a share, from $70.9 million or 61 cents, a year earlier. Analysts were expecting a profit of 71 cents a share. Also helping PetSmart is the statistic than around 62% of US homes own a pet, and spending on pet supplies is expected to rise to $52.9 billion this year from $51 billion last year and from $43.2 billion in 2008. With the increase in pet ownership and spending, the outlook for the company is very positive. PetSmart did excellent today.