Crocs and Disney Rule the Dow's 51st Record of 2013
We know you're busy on OpenTable for a last minute party-of-12New Year's Eve reservation that the Mexican restaurant already quadrupled margarita prices for. Wall Street had a slow Monday, but the Dow Jones Industrial Average rose 26 points for its 51st record high of 2013 -- and markets will be closed Wednesday for New Year's Day while you're mid-hangover.
1. Disney pops up to all-time high
It didn't take Tinkerbell to sprinkle some serious magic on this stock. Shares of Walt Disney popped 2.5% to an all-time high Monday after investment firm Guggenheim upgraded its projections for the stock price in 2014. Well played, Walt.
Why are analysts excited for Mickey? Movies. Disney's animated hit, Frozen has enjoyed nearly $500 million in ticket sales worldwide, and the Thor sequel (though it will never be better than The Dark Knight -- never) brought in $629 million. Add to that promotional products and rides for each movie, and both flicks are already crushing Wall Street's expectations. We assume Minnie got a big Christmas gift this year.
The takeaway is that Disney is already having a year that even Goofy would drink cognac to -- the stock is up 51% in 2013, mostly driven by theme-park success. Disney parks are expected to bring in $15.7 billion next year, and a new Disneyland is opening in Shanghai in 2015. Someone get us to Splash Mountain ASAP.
2. Crocs gets major investment from Blackstone
Do Crocs go well with a suit? executives at New York's Blackstone think so. The high-powered private-equity firm invested $200 million into Colorado-based in the form of preferred shares. At the same time, Crocs' CEO is retiring, and the stock ballooned 21% Monday.
Crocs is going Wall Street. The company that became famous for its foam go-anywhere clogs was popular only with weird Tim Tebow types. That business was limited. Now they're expanding to make clothes and even office shoes. The stock was down 40% in the past 18 months, though. This cash injection from Blackstone will be used to buy back shares to increase the value of each stock out there. They're losing their CEO, but they're getting some new big shots on the board of directors.
At first, Blackstone's shares will be like bonds, returning 6% dividends guaranteed every year. But then there's the kicker -- if the stock price rises above $29, they can covert to regular stock shares. Blackstone also gets two board-member seats, since it's now a 13% owner of Crocs. Blackstone knows how to make paper look sexy ... even in Crocs.
3. Pending-home sales nudge up
According to the National Association of Realtors, the number of home-hungry Americans who inked contracts for houses last month inched up by 0.2%, just short of expectations. These pending-home sales, along with other housing data, have had a pretty stellar year already.
The takeaway is that to investors, this tiny increase may be the first sign that the improving housing market is leveling out. The Federal Reserve has already announced that it's slowing down its stimulus policy (which keeps borrowing rates low) because the economic recovery is gaining momentum -- and any increase in interest rates is expected to slow enthusiasm from homebuyers.
Consumer confidence survey
MarketSnacks Fact of the Day: Italy is the fourth largest gambling market, behind the U.S., Japan, and Macau.
As originally published on MarketSnacks.com
The article Crocs and Disney Rule the Dow's 51st Record of 2013 originally appeared on Fool.com.
Fool contributors Jack Kramer and Nick Martell have no position in any stocks mentioned.The Motley Fool recommends OpenTable and Walt Disney and owns shares of Crocs and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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