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 circle of life
Pride Rock is back! Disney (NYS: DIS) is rereleasing The Lion King today. It's not the first time the family entertainment giant has tossed a classic back into the local multiplex, but this is the first time it's updating the 1994 blockbuster in 3-D.
The limited two-week run in theaters around the country isn't likely to set the box office on fire. Rereleases rarely hold up well in repeated theatrical offerings. However, this move is promoting a special retail release -- in Blu-ray and Blu-ray 3-D -- that Disney has slated for early next month.
This is a "win" on many different levels, and not just because Simba avenges Mufasa's death in the popular animated flick. For starters, this should be good for exhibitors that have been struggling lately in getting moviegoers to pay a premium for 3-D and super-sized screenings. Once the four-disc Blu-ray 3-D edition comes out Oct. 4, it may even help the fledgling market for 3-D flat screens.
Disney would be a bigger beneficiary than you think if it's able to help 3-D television take off. Have you seen how deep Disney's animated vault is with decades of releases? A company can make some sweet coin by remastering its library for 3-D if consumers would embrace the platform. The Mickey Mouse company is simply making its own luck here.
2. Organic panic
There are apparently more fans for organic veggies and soy milk out there than you think. LivingSocial had no problem selling a million vouchers offering $20 worth of Whole Foods Market (NAS: WFM) groceries for $10 apiece on Tuesday.
LivingSocial sold out of its prepaid vouchers hours before the deal was supposed to have expired.
We can argue that Whole Foods didn't need to go the social coupon route. It has rattled off several strong quarters of store-level sales lately. However, this is really a big win for LivingSocial. The country's second largest social coupon site needs to remind the market that there's more to the niche than Groupon, especially if LivingSocial wants to eventually go public. Teaming up with an upscale and prolific grocer will also work wonders for LivingSocial's reputation, attracting other merchants that will now see the platform as a credibility boost instead of a reputation killer.
3. Pop open a cool one
There's a new bull on Sodastream (NAS: SODA) . Janney Capital Markets analyst Mitchell Pinheiro initiated coverage with a buy rating, impressed by the positive sales momentum for the company behind the popular home-based soda-making system.
Pinheiro is setting a $20 price target on the company, expecting it to penetrate 3% of the domestic market in two years. Given the volume of soda that many houses in this country go through, that would be substantial for the Israeli-based company.
Competition awaits, but Pinheiro feels that SodaStream's first-mover advantage and its healthy and improving retail distribution will keep the company on top.
4. The library is in your hands
Amazon.com (NAS: AMZN) is on the verge of redefining the e-reader market, again.
The Wall Street Journal is reporting that the leading online retailer is talking to book publishers about setting up an unlimited reading plan.
The model has been working for years in terms of digital video and music, so why not books? Why can't folks just pay a reasonable monthly fee for access to a wide range of books?
Publishers can naturally snuff this out before it has a chance to develop. Amazon doesn't need every major book company to participate, but it won't get very far if the only kind of online library it can round up for this bibliophile buffet is one sorely lacking in popular titles.
However, this could give publishers a new revenue stream to explore if it's not a major source of cannibalization. This would obviously also help Amazon once again justify the purchase of a Kindle reader.
The next few chapters will get rocky in terms of swaying the book giants, but let's see if Amazon can pull off a happy ending for everyone this time.
5. Chipotle for chopsticks
ShopHouse -- Chipotle's (NYS: CMG) new quick-service concept -- opened its first location in Dupont Circle in Washington, D.C., yesterday.
You won't find my chicken burritos or guacamole on the menu. ShopHouse offers a similar assembly line style of food prep as its sibling concept, but this time it's Southeast Asian dishes being served up.
It's a great move for Chipotle, breaking out a new concept while its namesake brand still has expansion room. Given the Asian menu bent, it's also unlikely to eat into Chipotle's sales if the test unit merits building out in the coming years.
Chipotle's never been cheap. It fetches 37 times next year's projected profitability. Then again, that's another major incentive to expand. It gives the stock some Szechuan sizzle before analysts begin wondering about market saturation of its flagship concept.
If you want to see if these companies continue to do the smart thing, track them through My Watchlist.
- AddWhole Foods Marketto My Watchlist.
- AddSodaStream Internationalto My Watchlist.
- AddWalt Disneyto My Watchlist.
- AddChipotle Mexican Grillto My Watchlist.
- AddAmazon.comto My Watchlist.
At the time this article was published The Motley Fool owns shares of Chipotle Mexican Grill and Whole Foods Market.Motley Fool newsletter serviceshave recommended buying shares of SodaStream International, Whole Foods Market, Chipotle Mexican Grill, Amazon.com, and Walt Disney, and creating a iron condor position in Chipotle Mexican Grill. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributorRick Munarrizcalls them as he sees them. He does not own shares in any of the stocks in this story, except for Disney. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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