Wall Street This Week: Furnishing and Building Homes
Monday -- Wayfair Steps Up
It's been a rough first few weeks for Wayfair (W) as a public company. The fast-growing furniture retailer went public at $29 in early October, traded as high as $39.43, but it now trades for far less than its original IPO price.
Wayfair reports after the market close on Monday. It will be the online retailer's first report as a public company. Sales are up nearly 50 percent through the first half of the year, but the problem rests on Wayfair's bottom line, where it should post another quarterly loss. Analysts see red ink until at least 2017.
Tuesday -- Hear From Horton
The housing market is showing signs of peaking. New home sales are clocking in at 467,000 -- a record high since the market crashed several years ago -- but momentum has slowed dramatically. The number of new homes sold through the first nine months of the year is only 2 percent ahead of where we were last year. Why does this all seem frothy? Well, there are a lot of unsold new homes on the market. We're up to 207,000, and that's 13 percent ahead of where we were last year and the highest level since 2010, when the housing recovery began. With mortgage rates near historic lows again and median home prices declining in 2014, we may be heading into challenging times for homebuilders.
We'll get a better snapshot of the industry when D.R. Horton (DHI) reports quarterly results on Tuesday. Wall Street doesn't seem to buy the theory that the residential housing market is getting frothy. They see revenue at America's largest homebuilder soaring 32 percent for the quarter and another 20 percent for the new fiscal year that began last month. Keep an eye on new orders and cancellation rates when D.R. Horton reports, as those are leading indicators of future performance.
Wednesday -- The Cisco Kid
There was a brief moment when Cisco (CSCO) was the country's most valuable publicly traded company. It was springtime in 2000, and Cisco's market cap peaked at more than $555 billion. That was just before the dot-com bubble popped, and the leading provider of networking equipment was being hyped as the thinking investor's play on the Internet revolution.
It all came crashing down. The dot-com craze settled down, and Cisco's stronghold of routers and switches was challenged by cutthroat competitors. Cisco also made some moves into the consumer market that in retrospect were ill-advised. Does anyone remember the Flip camcorder?
Cisco reports on Wednesday afternoon. Its market cap is closer to $130 billion these days, and the company that couldn't hire employees fast enough during the sudsy dot-com boom has pushed through layoffs in recent quarters.
Thursday -- Sam Walton's Legacy Lives On
Things haven't gone according to plan at Walmart (WMT). The world's largest retailer has been suffering through sluggish sales, and its reputation has taken a hit over the years. The online shopping revolution has nipped at Walmart's historical pricing advantage over rival brick-and-mortar retailers.
Walmart reports on Thursday morning. Analysts are holding out for a ho-hum showing. They see sales climbing 2 percent and earnings per share declining 2 percent. The challenges remain for the once-thriving discount department store chain.
Friday -- Carrey On My Wayward Fun
Fridays are usually quiet on the financial news front, but investors looking for a laugh may head out to the multiplex to check out "Dumb and Dumber To." (No, that isn't a typo.) It's been 20 years since the original Farrelly brothers' comedy was a box office smash, ringing up more than $127 million in ticket sales. A sequel followed nine years later, but "Dumb and Dumberer: When Harry Met Lloyd" was a cinematic flop. Reviews weren't kind, and it didn't help that it didn't star the original's comedic duo of Jim Carrey and Jeff Daniels.
They're back for "Dumb and Dumber To," and it should fare well as the biggest movie opening during the weekend.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.