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Investors nervous about the possibly stalled economic recovery -- or worse, the beginning of the latter phase of a double-dip recession -- were not pleased with last week's housing numbers. Things were perhaps ameliorated somewhat by durable goods order numbers and a revised GDP that weren't as bad as expected, but that didn't stop the Dow from dipping below 10,000 later in the week, before fighting its way back above the benchmark to end the week, thanks largely to Fed chair Bernanke's comments on Friday.
Though the end of August is usually quiet, this week lots more economic data are due out, including more housing numbers: The Case-Shiller Home Price Index for June on Tuesday, construction spending numbers for July on Wednesday, and NAR's pending home sales for July on Thursday. There's not expected to be much to get excited about in these numbers.
The Chicago Purchasing Managers Index for August comes out Tuesday, while the Institute of Supply Management releases its manufacturing survey for August on Thursday and its services sector survey for August on Friday. Also look for revised productivity numbers for the second quarter and data on factory orders in August on Thursday. Further evidence of a slowing expansion in the manufacturing sector is anticipated.
Perhaps most importantly, more employment data is coming this week. The ADP employment index for August is due on Wednesday, while initial jobless claims for last week will be released on Thursday. And then the big one: the Labor Department's unemployment numbers for August on Friday. The continued departure of census workers and other government employees is expected to weigh on these results.
Also watch for numbers on new motor vehicles in August and consumer spending in July this week, as well as the release of the minutes of the August 10 FOMC meeting.
Things will be more quiet on the earnings front. The following is a closer look at three companies expected to report strong results this week.
Ohio-based Greif Inc. (GEF) announced the retirement of its CFO and raised its dividend during its fiscal third quarter. Analysts surveyed by Reuters Thomson forecast earnings for that period to come to $1.21 per share, which is up 27.3% from the same period of last year. This container producer's revenue for the three months ended in July is expected to come to $899.9 million, or 25.4% more than a year earlier. And analysts foresee sequential and year-over-year revenue growth in the fourth quarter as well. The per-share earnings topped analysts' expectations in the past five quarters, by as much as eight cents per share.
Greif's long-term EPS growth forecast of 10% is better than that of competitor Smurfit-Stone (SSCC). The 12.5 forward PE ratio is less than the trailing one of 14.9. The First Call recommendation has been to buy GEF for more than 90 days, and the mean price target is currently $70.00 per share. Shares ended the week at $58.22, which is less than three bucks from the 52-week high.
During the three months that ended in July, Cooper Companies Inc. (COO) settled a shareholder suit and declared a quarterly dividend. The California-based medical devices maker is expected to report that earnings per share came to 71 cents, a 23.9% increase from a year earlier. Fiscal third-quarter revenue is expected to have grown 4.1% to $297.0 million. So far, analysts predict full-year EPS of $2.57 (+10.9%) on revenue of $1.1 billion (+5.8%). But earnings results met consensus estimates in two of the past three quarters, falling short by three cents per share in the first quarter.
Cooper's long-term EPS growth forecast is 14.3%, which is better than bigger competitor Johnson & Johnson (JNJ). Cooper's forward PE ratio of 14.0 is less than the industry average and the trailing PE ratio of 17.3. Analysts on average recommend buying COO. The mean price target on shares is $43.00. Shares hit a 52-week high of $42.26 last week, but are trading in the same neighborhood as six months ago.
Analysts anticipate that Dollar General Corp. (DG), the Tennessee-based discount retail chain, will report second-quarter earnings of 38 cents per share, up from 29 cents in the same period of last year. During the three months that ended in July, Dollar General was recognized by the Secretary of Defense and also opened its 9,000th store, and analysts expect revenue for that period to total $3.2 billion. Thus far, the consensus full-year forecast is for EPS of $1.72 (+23.8%) on revenue of $13.1 billion (+10.9%). Dollar General's earnings beat analysts' expectations in the previous two quarters.
The long-term EPS growth forecast of 18.9% tops that of competitors Family Dollar (FDO) and Fred's (FRED). The earnings multiple is 14.2x, but that's down from the trailing PE ratio of 17.9. The consensus recommendation remains to buy DG. The mean price target is $33.71. The stock has traded mostly between $27 and $30 since April, and the share price ended the week at $28.09.
Also look for this week's quarterly reports from Borders (BGP), Brown-Forman (BF.B), Campbell Soup (CPB), HJ Heinz (HNZ), H&R Block (HRB), Krispy Kreme (KKD), SAIC (SAI) and Winn-Dixie (WINN).
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Reader Comments (Page 1 of 1)
8-30-2010 @ 10:04AM
Vinny said...
Regardless of what happens with the economy Obama has worn thin on most people, including me, and I voted for him.
His speeches are repeats of what he has said before, and his promises have all fallen flat. Its got to the point that I can't watch or listen to him anymore, because I've heard everything he has to say and to me, he's just another Democratic loser. If he resigned tomorrow I could'nt care less. I'm just tired of his useless promises and worn out rherotic, so Obama, just go away or stay on vacation. You are just about useless as a leader anyway.