Steel stocks have picked up where they left off last week–with more gains.
AFP/Getty ImagesUnited States Steel (X) has gained 3.1% to $19.39 today, while AK Steel (AKS) has gained 4.6% to $3.73 and Steel Dynamics (STLD) has jumped 3.2% to $16.33. The odd man out: Nucor (NUE), which has dropped 1% to $48.71.
Wells Fargo’s�Sam Dubinsky and Amir Chaudhri assess the sector’s recent strength:
Domestic steel stocks increased 2.2% on average for the week, outperforming the broader markets, which declined 0.8-1.5%. Sheet pricing continues to march higher (albeit temporarily due to supply disruptions), the commodity market got a boost from improved sentiment on China (upped steel production forecasts and recorded record iron ore imports), and steel imports into the US have moderated (down 11% YoY). The only negative is weak earnings quarters, though investors likely view reset expectations as a positive.
Top Industrial Conglomerate Stocks To Invest In Right Now: Aruba Networks Inc.(ARUN)
Aruba Networks, Inc. provides next-generation network access solutions for the mobile enterprises worldwide. Its products include ArubaOS, an operating system software for wired, wireless, and remote access products for integrating user-based security, application-aware radio-frequency services, and wireless LAN access to deliver mobile networking solutions; software modules for ArubaOS; mobility controllers for managing wired and wireless access; access points, which serve as on-ramps that aggregate user traffic onto the enterprise network and direct this traffic to mobility controllers; and mobility access switches that provide secure network access for wired users and devices. The company also offers remote networking products comprising remote access points for securing always-on network access to corporate enterprise networks from remote locations; Aruba Instant; and Virtual Intranet Access client software that provides secure network connectivity for Windows laptops and MacBooks. In addition, it offers outdoor wireless mesh routers to secure Wi-Fi access and backhaul links for transporting voice, video, and data traffic wirelessly. Further, the company provides management and security software products, such as AirWave network management for managing mobile and wired users on multisite networks; and Amigopod access management, which manages secure wireless LAN access for visitors, contractors, employees, and their mobile devices, as well as offers cloud-based content security services for branch offices and teleworkers. It markets its products to construction, general enterprise, education, finance, government, healthcare, hospitality, manufacturing, media, retail, technology, telecom, transportation, and utility industries through its sales force, value-added resellers, value-added distributors, and original equipment manufacturers. The company was incorporated in 2002 and is headquartered in Sunnyvale, California.
Advisors' Opinion:- [By Roberto Pedone]
One network equipment player that's quickly moving within range of triggering a major breakout trade is Aruba Networks (ARUN), which provides enterprise mobility solutions. This stock is off to a weak start in 2013, with shares off by 11%.
If you take a look at the chart for Aruba Networks, you'll notice that this stock just formed a major bottom chart pattern, after buyers stepped in to support the price over the last month and change from $17 to $16.25 a share. Following that bottom, shares of ARUN have now started to rebound higher and move back above its 50-day moving average of $17.73 a share. That move is quickly pushing shares of ARUN within range of triggering a major breakout trade.
Traders should now look for long-biased trades in ARUN if it manages to break out above some near-term overhead resistance levels at $19.16 a share to its 200-day moving average at $19.63 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.12 million shares. If that breakout triggers soon, then ARUN will set up to re-fill some of its previous gap down zone from May that started near $22 a share. Any high-volume move above $22 will then give ARUN a chance to hit $24 to $25 a share.
Traders can look to buy ARUN off any weakness to anticipate that breakout and simply use a stop that sits right below support at $17 a share or below $16.25 a share if you want to give it more room. One can also buy ARUN off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
- [By Jake L'Ecuyer]
Aruba Networks (NASDAQ: ARUN) was also up, gaining 6.63 percent to $18.34 after the company reported upbeat Q1 results. Needham upgraded the stock from Hold to Buy.
- [By Renu Singh]
Aruba Networks (ARUN) is a leading provider of next-generation network access solutions for mobile enterprise. The company's Mobile Virtual Enterprise (MOVE) architecture unifies wired and wireless network infrastructures into one seamless access solution for corporate headquarters, mobile business professionals, remote workers and guests. This unified approach to access networks enables IT organizations and users to securely address the Bring Your Own Device (BYOD) phenomenon, dramatically improving productivity and lowering capital and operational costs.
Best Performing Stocks To Own Right Now: Ishares S&P Midcap 400 Index Fund (IJH)
iShares S&P MidCap 400 Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Standard & Poor�� MidCap 400 Index (the Index). The Index measures the performance of the mid-capitalization sector of the United States equity market. The Index serves as the underlying index for the S&P 400/Citigroup Growth and Value Index series. The components stocks are weighted according to the total float-adjusted market value of their outstanding shares. The component stocks have a market capitalization between $1 billion and $4 billion (which may fluctuate depending on the overall level of the equity markets), and are selected for liquidity and industry group representation.
The Index is adjusted to reflect changes in capitalization resulting from mergers, acquisitions, stock rights, substitutions and other capital events. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Fund�� investment advisor is Barclays Global Fund Advisors.
Advisors' Opinion:- [By John Udovich]
Moreover,�my guess is that the switch will be a wash for investors as funds and ETFs that track the S&P 500 will dump their positions in Advanced Micro Devices and SAIC Inc while those that track the S&P Mid Cap 400 will be obligated to take up positions in both. A quick look at the performance of the iShares S&P 500 Index ETF (NYSEARCA: IVV) verses the iShares Core S&P Mid Cap ETF (NYSEARCA: IJH) reveals the following:
Best Performing Stocks To Own Right Now: Endeavour International Corp (END)
Endeavour International Corporation (Endeavour), incorporated on January 13, 2000, is an independent oil and gas company engaged in the exploration, development and acquisition of energy reserves in the United States and United Kingdom. The Company has three producing fields in the United Kingdom, including Alba, Bacchus and Bittern, as well as a number of development projects including Rochelle and Columbus. In the United States, the Company has production in the Haynesville and Marcellus, as well as two oil frontier plays in Colorado and Montana. As of December 31, 2012, Endeavour had proved reserves of 71,591 million cubic feet (MMcf) of natural gas and 13,739 thousands of barrels (Mbbls) of crude oil for a combined 25.7 million barrels of oil equivalent (MBOE).
The North Sea is a resource area where it has a development project, producing properties and additional exploration licenses. During 2012, Alba production volumes were impacted by water handling issues. As of December 31, 2012, it held a 30% working interest in its Bacchus field asset, which is operated by Apache Corporation, who owns a 50% working interest. In April and July 2012, it achieved production from the first and second development wells, respectively, on the Bacchus field. The Company�� working interest in the Rochelle area is 44% and it is the operator of the field, which is comprised of Blocks 15/26b, 15/26c and 15/27. Its United States activity has targeted reserve and production growth in shale gas plays, including the Louisiana Haynesville and Pennsylvania Marcellus areas.
The Company is also targeting emerging oil-prone and liquids-rich plays, including the Montana Heath oil play and its new interests in the Colorado Niobrara area. The Company operates and controls the Marcellus assets while retaining a 50% position in its remaining producing Haynesville acreage. The Company has 19 Haynesville Units which held by production with an estimated over 80 remaining gross locations to be developed, dep! ending on development well spacing. The Company has interests in approximately 88,900 net acres in the emerging Heath Shale oil play in Montana, primarily in Rosebud and Garfield Counties.
Advisors' Opinion:- [By Jake L'Ecuyer]
Energy shares dropped by 0.26 percent in the US market today. Among the sector stocks, Endeavour International (NYSE: END) was down more than 5.6 percent, while Pacific Ethanol (NASDAQ: PEIX) tumbled around 2.2 percent.
- [By Jon C. Ogg]
Endeavour International Corp. (NYSE: END) was downgraded to Hold from Buy at Canaccord Genuity.
Endo Health Solutions Inc. (NASDAQ: ENDP) was downgraded to Sell from an already cautious Neutral rating at Janney.
Best Performing Stocks To Own Right Now: GUESS? Inc (GES)
Guess?, Inc. (GUESS?) designs, markets, distributes and licenses apparel and accessories for men, women and children. The Company operates in five: Europe, North American Retail, Asia, North American Wholesale and Licensing. The Company�� products are sold through retail, wholesale, e-commerce and licensing distribution channels. The lines include full collections of clothing, including jeans, pants, skirts, dresses, shorts, blouses, shirts, jackets, knitwear and intimate apparel. It also grant licenses to manufactures and distributes a range of products, including eyewear, watches, handbags, footwear, kids' and infants' apparel, leather apparel, swimwear, fragrance, jewelry and other fashion accessories. In fiscal 2012, the Company, along with its distributors and licensees, opened 224 stores in all concepts combined outside of the United Sates and Canada, which consisted of 120 stores in Europe and the Middle East, 89 stores in Asia and 15 stores in the combined area of Central and South America.
As of January 28, 2012, the Company directly operated a total of 504 stores in the United Sates and Canada and 251 stores outside of the United Sates and Canada, and in addition, 230 smaller-sized concessions in Asia and Europe. As of January 28, 2012, its international licensees and distributors operated 804 stores located outside the United Sates and Canada, and 119 smaller-sized licensee operated concessions located in Asia. As of January 28, 2012, it operated retail Websites in the United Sates, Canada, Europe and South Korea. As of January 28, 2012, it had e-commerce available to 26 countries, and in 6 languages around the world. The Company and its network of licensee partners sell its products around the world primarily through six different store concepts, namely its flagship GUESS? retail stores, its GUESS? factory outlet stores, its GUESS by MARCIANO stores, its G by GUESS stores, its GUESS? Accessories stores and its GUESS? Kids stores. The Company also has a small number of footwe! ar, Gc watch and underwear concept stores.
Europe Segment
In the Company�� Europe segment, GUESS? sells its products in 63 countries throughout Europe and the Middle East through wholesale, retail and e-commerce channels. In fiscal 2012, its Europe segment accounted for approximately 37.6% of its revenues. The Company�� European wholesale business generally relies on a large number of smaller regional distributors and agents to distribute its products primarily to smaller independent multi-brand boutiques. The Company�� products are also sold directly to department stores like Galeries Lafayette, Printemps and El Corte Ingles. As of January 28, 2012, GUESS? had showrooms in Barcelona, Dusseldorf, Munich, London, Paris, Florence and Lugano. It sells both its apparel and certain accessories products under the Company�� GUESS? and GUESS by MARCIANO brand concepts through its wholesale channel, operating primarily through two seasons, Spring/Summer and Fall/Winter.
The Company�� European retail network consists of a mix of directly operated and licensee operated GUESS? and GUESS by MARCIANO retail and outlet stores, GUESS? Accessories stores, GUESS? Footwear stores and GUESS? Kids stores. As of January 28, 2012, it had 179 directly operated stores and 382 licensee stores, excluding 17 smaller-sized concessions in Europe. During fiscal 2012, the Company opened 45 new directly operated stores, 75 licensee stores and 5 concessions. The Company�� GUESS? Accessories stores average approximately 800 square feet, GUESS by MARCIANO stores average approximately 1,300 square feet and full-price GUESS? stores generally average 2,300 square feet.
North American Retail Segment
In the Company�� North American Retail segment, it sells its products through a network of directly operated retail and factory outlet stores in North America and through its on-line stores. In fiscal 2012, the Company�� North American Retail segment accounted for ap! proximate! ly 41.6% of its revenue. As of January 28, 2012, it also directly operated 25 GUESS? branded stores in Mexico through a majority-owned joint venture. The Company�� the United Sates and Canada GUESS? retail stores carry an assortment of men's and women's GUESS? merchandise, including most of its licensed product categories. As of January 28, 2012, these stores occupied approximately 1,025,000 square feet and ranged in size from approximately 2,500 to 13,500 square feet, with most stores between 4,000 and 6,000 square feet. In fiscal 2012, it opened nine new retail stores and GUESS? closed four stores.
The Company�� the United Sates and Canada factory outlet stores are located primarily in outlet malls generally operating outside the shopping radius of its wholesale customers and its retail stores. These stores sell selected styles of men's and women's GUESS? apparel and licensed products. As of January 28, 2012, its the United Sates and Canada factory outlet stores occupied approximately 717,000 square feet and ranged in size from approximately 2,000 to 11,000 square feet, with most stores between 4,500 and 6,500 square feet. In fiscal 2012, it opened 10 new factory stores. The Company�� G by GUESS store carries apparel for both men and women and a line of accessories and footwear. As of January 28, 2012, its G by GUESS stores occupied approximately 317,000 square feet and ranged in size from approximately 4,000 to 10,000 square feet, with most stores between 4,000 and 5,500 square feet. In fiscal 2012, the Company opened 12 new G by GUESS stores and it closed three stores.Its GUESS? Accessories store concept sells GUESS? and GUESS by MARCIANO labeled accessory products.
As of January 28, 2012, the Company�� GUESS? Accessories concept stores occupied approximately 122,000 square feet and ranged in size from approximately 1,000 to 4,000 square feet, with most stores between 1,500 and 2,500 square feet. In fiscal 2012, GUESS? opened four new GUESS? Accessories stores and i! t closed ! three stores. The Company�� GUESS by MARCIANO stores in the United Sates and Canada offer a women's collection designed for the stylish, trend-setting woman. As of January 28, 2012, its GUESS by MARCIANO stores occupied approximately 156,000 square feet and ranged in size from approximately 2,000 to 6,500 square feet, with most stores between 2,000 and 3,000 square feet. In fiscal 2012, it opened two new GUESS by MARCIANO stores and the Company closed four stores. The Company�� North American Retail segment also includes its the United Sates and Canada retail Websites, including www.guess.com, www.gbyguess.com, www.guessbymarciano.com, www.guesskids.com, www.guess.ca and www.guessbymarciano.ca. These Websites operates as virtual storefronts that both sell its products and promotes its brands.
Asia Segment
In the Company�� Asia segment, GUESS? sells its products through wholesale, retail and e-commerce channels throughout Asia. In fiscal 2012, its Asia segment accounted for approximately 9.3% of its revenue. Its Asia retail business includes both licensee and the Company operated stores, including GUESS?, G by GUESS, GUESS by MARCIANO, Gc, GUESS? Accessories and GUESS? Underwear stores. During fiscal 2012, it and its partners opened 89 new stores in Asia, as of January 28, 2012, it had 423 stores, 47 of which it operated directly and 376 of which were operated by licensees or distributors. The Company and its partners opened flagship stores in cities, such as Seoul, Shanghai, Hong Kong, Macau, Taipei and Beijing and have partnered with licensees to develop its business in the second tier cities in this region.
North American Wholesale Segment
In the Company�� North American Wholesale segment, it sells its products through wholesale channels in North America and to third party distributors based in Central and South America. In fiscal 2012, its North American Wholesale segment accounted for approximately 7.0% of its revenue. As of January 28, 20! 12, its p! roducts were sold to consumers through 1,005 major doors in the United Sates and Canada. These locations include 345 shop-in-shops, a selling area within a department store that offers an array of its products and incorporates GUESS? signage and fixture designs. The Company has sales representatives in New York, Los Angeles, Toronto, Montreal and Vancouver. During fiscal 2012, Macy's, Inc. was its largest domestic wholesale customer, accounting for approximately 2.7% of its consolidated net revenue.
Licensing Segment
The Company�� licensing segment includes the worldwide licensing operations of the Company. In fiscal 2012, its licensing segment royalties accounted for approximately 4.5% of its revenue. As of January 28, 2012, GUESS? had 19 domestic and international licenses that included eyewear, watches, handbags, footwear, kids' and infants' apparel, leather outerwear, fragrance, jewelry and other fashion accessories; and included licenses for the manufacture of GUESS? branded products in markets, which include Africa, Asia, Australia, Europe, the Middle East, Central America, North America and South America.
Advisors' Opinion:- [By Sue Chang]
After Wednesday�� closing bell, Guess Inc. (GES) �said its fourth-quarter profit fell to $69.6 million, or 82 cents a share, from $72.5 million, or 85 cents a share, a year ago. Revenue also declined to $768.4 million from $815.1 million. Analysts surveyed by FactSet had expected Guess to earn 78 cents a share. The Los Angeles-based apparel retailer said it expects to report a first-quarter loss of between 5 cents and 9 cents a share. Shares of Guess tumbled 6.9% in after-hours trading.
- [By Damian Illia] eing a domestic apparel maker to become a global brand. The company designs, markets, distributes and licenses casual and trendy apparel and accessories for the American and European fashion sensibilities. Its target buyer is a style- conscious consumer between the ages of 18 and 32. In fiscal 2013, the company broadened its market by the acquisition of Marciano, an American designer label aimed to costumers between the ages of 25 to 40.
Guess markets its products through a wide brand portfolio and, through six store concepts, the company operates as much as 512 locations in the US and 1,178 internationally, 858 of which are licensees. Its U.S. wholesale customers are large department stores like Macy�� Inc. (M), and Bloomingdale��.
Achieving Upturns in Times of Economic Troubles
Over the years GES has developed strong brand recognition and strong adaptability to the changing fashion trends. Consequently, the firm has posted double-digit increases in revenues and profits for the past ten years. A balanced combination of sales enhancement and expansion plans with cuts in operating expenses, has allowed the firm to double its sales and generate returns on invested capital of 24% on average during the last five years.
Nevertheless, GES麓 strong performance has been facing several challenges resulting from a tough macroeconomic environment. The company麓s international operations account for 50% of its sales, 35% of which are generated in Europe. Hence, economic austerity measures and bad weather conditions in Southern European countries have hurt revenues generated in the region. Reported slowdowns in sales in the US in all four quarters 2013 are also a concern. Moreover, the company麓s high exposure to negative foreign currency fluctuations has impacted significantly on its top line growth.
Countering Headwinds
Guess�� expansion in Asia, however, rendered impressive results posting double-digit revenues growth over the
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