This Week's 5 Smartest Stock Moves
If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. The name's Bezos: Jeff Bezos.
Amazon.com (NAS: AMZN) likes its book deals shaken but not stirred. The e-tailer struck a 10-year deal for exclusive North American rights to publish all 14 of Ian Fleming's James Bond novels.
This isn't just about keeping Kindle fans happy with 007 e-books. This is also an exclusive print publishing deal that will go through Amazon's Thomas & Mercer imprint.
"The reason we're going with Amazon is we believe that their online abilities will bring our books to a much broader audience than we've had before," Ian Fleming Publications' managing director Corinne Turner tells The Wall Street Journal.
Smart move. Publishers have been leery of Amazon's growing power, but that was before regulators began cracking down on five major publishers with price-fixing allegations. Playing nice with Amazon -- and its growing reach both online and offline -- is the right play.
2. Carnitas way
Chipotle Mexican Grill (NYS: CMG) isn't a cheap stock, but it's letting investors know why.
The cult fave burrito roller delivered blowout quarterly results last night. Revenue soared 26% to $640.9 million, fueled by brisk expansion and a stunning 12.7% increase in comps. Yes, Chipotle has had to boost prices higher to keep up with rising food costs, but the lines aren't getting any shorter.
Margins actually improved during the period with earnings soaring 35% to $1.97 a share. Analysts were expecting the chain of 1,265 quick-service restaurants to earn just $1.93 a share on a 24% top-line pop.
There's no reason to stop now. The company plans to add another 155 to 165 new locations this year, and its historically conservative guidance calls for comps to keep up with the mid-single-digit increase it foresees in food inflation.
3. Sirius vs. Stern
Sirius XM Radio (NAS: SIRI) emerged victorious -- for now -- in its legal battle with Howard Stern. A New York Supreme Court judge dismissed a lawsuit initiated by Stern's camp, alleging that $330 million in stock awards should be shelled out as a result of Sirius merging with XM. Did Stern really think that he would get credit for XM listeners that don't even have access to his show?
Shareholders should be happy. It would've been another dilutive hit to a company that already has the equivalent of more than 6.5 billion shares outstanding.
Stern told his listeners that morning that he plans to appeal the decision, and it's becoming clear that the legendary radio host will likely be gone when his contract is up in three years. He already has a TV gig lined up next month, and it's starting to rub some listeners the wrong way.
Even Hollywood hero Judd Apatow got into a Twitter tussle with Stern over the quality of the popular radio show since Stern began devoting too much airtime to his initial experiences as the new judge for America's Got Talent.
As long as Sirius doesn't have to shell out freshly minted shares, an angry Stern is usually a good catalyst for good radio.
4. Splunk goes spelunking
Last week may have been a quiet one on the IPO front, but there were a couple of big winners this time around.
There was no debutante hotter than Splunk (NAS: SPLK) . The fast-growing business intelligence software company makes it easy for companies to process and analyze gobs of data in real time. Splunk went public at $17, but popped at the open yesterday to ultimately close 109% higher.
Sure, we can take underwriters to task for leaving Splunk's money on the table in this mispriced deal. That didn't seem possible after all four IPOs in the prior week failed to sizzle. However, it's a strong sign that investors are still hungry for dynamic growth companies.
5. You must be streaming
Netflix (NAS: NFLX) hosted an event during this week's National Association of Broadcasters convention to sing the praises of its original content.
The creator of Arrested Development and several cast members were on stage to discuss the upcoming season that will stream exclusively on Netflix next year. All 10 episodes will be available at the same time, encouraging what Netflix considers "binge viewing" by its subscribers.
Netflix's content chief also announced some impressive stats on AMC's Mad Men, which the service began streaming last year. There were 3.5 million Netflix subscribers streaming the fourth season of the show over the past year, and 800,000 members went through all of the past seasons over the past year. When the show's fifth season began a few weeks ago after a long hiatus, it experienced a surprising 20% pop in viewers.
C'mon, Don Draper. You know you can thank Netflix for cultivating a new audience in your absence.
At the time this article was published The Motley Fool owns shares of Chipotle Mexican Grill and Amazon.com. Motley Fool newsletter services have recommended buying shares of Chipotle Mexican Grill, Netflix, and Amazon.com, as well as creating a bear put spread position in Chipotle Mexican Grill. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Netflix. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.