5 Things to Watch This Week: Sonic, Family Dollar, Intel TVs, Finish Line, and the January Effect
1. Sonic Attack: Anyone who has ever had a craving for chili-and-cheese-topped tater tots or tangy cherry limeade has probably pulled up to a Sonic (SONC).
Unlike traditional fast-food chains, where drive-thru windows or inside dining are the only two ways to get your grub, Sonic locations are typically surrounded by parking spots where the hungry can order from their personal order menus.
Sonic will also be one of the first companies to report in 2013 when it announces its latest quarterly financials on Thursday. Analysts see Sonic earning $0.11 a share for its fiscal first quarter, ahead of the $0.09 a share it posted a year earlier. Sonic has actually beaten Wall Street's profit targets in its two most recent quarters, so the trend points to another strong report.
2. The Buck Stops at Family Dollar: Things have held up well at Family Dollar (FDO).
Armed with 7,500 stores offering deep discounts, Family Dollar has been stretching the spending power of its cash-strapped shoppers for decades.
This may naturally seem to be an all-weather retailer, but it doesn't always play out that way. When the going is good, shoppers can trade up to more traditional supermarkets and discount department store chains.
For now, the news should be encouraging out of Family Dollar when its reports its quarterly financials on Thursday. Wall Street sees revenue and profitability growing in the low single digits.
3. Intel-e-vision: A surprising entrant is emerging in the cable television market.
A source in the video distribution industry tells tech blog TechCrunch that Intel (INTC) is gearing up to launch a Web-savvy set-top box with its own cable service.
The set-top box isn't necessarily a surprise. Intel is a major chip maker. However, negotiating with networks and broadcasters to offer its own premium TV subscription service is a potential game changer.
The plan reportedly is to offer a set-top box that can stream popular TV shows and premium services but also offer access to things like live sports that often keep folks tethered to their otherwise costly cable or satellite television plans.
The report indicates that Intel is planning to roll out city by city, instead of a nationwide launch. However, if there is any meat to the story we'll probably see more information begin to leak in the coming days.
4. Finish What You Started: There are only a handful of companies reporting their latest financials this week. Finish Line (FINL) is one of them.
Wall Street isn't holding out for a strong report. Analysts see Finish Line's profitability dipping slightly on a mere 5% advance in net sales. Then again, it's hard to judge a company on a single quarter. It's a marathon -- and not a sprint -- to be a public company.
5. Get Small in 2013: Why did it take so long for the fiscal cliff negotiations to even start? It's been the top business story in recent days, and rightfully so. Taxes inching higher and spending moving lower will leave a mark on the economy.
However, investors also can't forget about the January effect.
The phenomenon shows that stocks tend to appreciate more often than not during the month of January. Smaller companies also tend to post larger gains than blue chips. There are sound explanations for the January effect. Some argue that folks receiving year-end bonuses invest a chunk of their proceeds in the market. Investors also tend to fund their retirement plans this time of year. There's also the theory that investors tend to sell small underperforming stocks by the end of the year to lock in capital losses, only to buy back in come January.
It certainly doesn't always happen. There is no free lunch on Wall Street. However, it's something that investors should consider as they make portfolio moves this week.
Longtime Motley Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Intel. Motley Fool newsletter services recommend Intel.