Wall Street Watch: Krispy Kreme, Costco and Vera Bradley
1. Searching for More New Highs: It took a long time, but the Dow Jones Industrial Average finally smashed through the ceiling to hit a series of new all-time highs last week.
The other exchanges weren't as fortunate. The tech-centric Nasdaq Composite is still far from its dot-com bubble peak. The S&P 500, on the other hand, kicks off the week less than 2 percent away from overtaking its all-time high set in 2007.
We still can't lose sight of the Dow itself. It may have hit a fresh high, but investors will want to see if the favorable momentum carries the 30-stock gauge higher.
Yes, it's a bit of a surprise. When a deal wasn't finalized at the end of February to hold off the sequester many investors were bracing for a selloff. Didn't we go through this scenario with the fiscal cliff in December? The market rallied after a deal was reached. It didn't happen this time, but faith in Corporate America remains strong.
2. Time to Make the Doughnuts: Fans of Krispy Kreme (KKD) are drawn like flies to the "Hot Doughnuts Now" neon sign when it's glowing. Krispy Kreme stores turn the signs on as the signature glazed treats roll off the line.
Investors are also hoping that the investing in the doughnut maker will be just as tasty.
It's not just the dough in the doughnuts rising these days. The stock is trading near an eight-year high as we head into the treats maker's quarterly report on Thursday. Analysts see profitability doubling when it reports.
Krispy Kreme may have high expectations to live up to, but it has been able to easily surpass Wall Street profit targets over the past three quarters.
3. Game On for Activision Blizzard: There haven't been a lot of reasons to cheer for the video game industry these days, and this isn't a segue to discuss the implications of children being exposed to violent video games.
It's against this challenging backdrop that Activision Blizzard (ATVI) is putting out "Starcraft II: Heart of the Swarm" on Tuesday.
It's Activision Blizzard's first expansion pack for the Starcraft II PC game. The add-on tacks on 30 new missions and several game-play enhancements. Activision Blizzard hopes that diehard gamers won't let it down.
4. Bargains in Bulk: One of the market's most consistent performers has been Costco (COST). Consumers are drawn to the warehouse club's savings when money's tight, and when the economy is humming along, they consume more in general.
Costco was steered to greatness by Jim Sinegal until he stepped down at the end of 2011. Any concerns that the new CEO wouldn't be able to take the baton and keep running have been erased over the past year.
Costco reports on Tuesday. Analysts see net sales inching 9 percent higher, and profitability is expected to grow twice as fast.
5. Vera Bradley Wants to Take Off: Vera Bradley (VRA) picks a lousy time to go public. The maker of stylish suitcases and other accessories for fashionable people on the go completed its IPO at $16 three years ago.
In retrospect, going public just as the global economy was trying to bounce back wasn't the best idea. Corporate and leisure travel have been slow to bounce back, and the situation is even worse in the tourism hotbed of Europe.
Vera Bradley may have popped initially as a brand name, but the shares have shed more than half of their value since peaking two years ago. Vera Bradley gets another chance to take off on Wednesday when it reports fresh financials.
Wall Street's eyeing a profit of $0.57 a share, well ahead of the $0.50 a share it posted a year earlier. The good news for today's investors is that Vera Bradley is growing at a double-digit clip, yet trading at a reasonable 13 times this fiscal year's projected profitability.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Costco Wholesale. The Motley Fool owns shares of Activision Blizzard and Costco Wholesale. Try any of our newsletter services free for 30 days.