U.S. markets began the short Thanksgiving week on a flat note, as investors kept an eye on stabilizing oil prices ahead of third quarter GDP reports scheduled for tomorrow.
Crude oil initially traded 1% higher after Saudi Arabia said it will work with other countries that export or produce oil to try and get prices to stabilize. But by mid afternoon, those gains had been paired, and crude oil ultimately was off a fraction.
In other economic news, the National Association of Realtors (NAR) reported that existing home sales were off 3.4% in October to 5.36 million units annually. Economists were expecting a rate of 5.40 million units. Particularly troubling was an 8.7% drop in the Western U.S. Typically, real estate market trends begin in the west and move eastward.
The Dow Jones Industrial Average lost 0.2%, while the S&P 500 was off 0.1%. The Nasdaq did a bit better, finishing flat. Most sectors were lower, with utilities and telecommunications stocks the weakest and consumer goods the strongest today.
It was an interesting day in that some previously unloved stocks such as Alcoa Inc (NYSE:AA), Tyson Foods, Inc. (NYSE:TSN) and Macy’s Inc. (NYSE:M) finally got some love from the street, and led the markets higher. Here’s what happened to make them three of today’s best stocks.
Alcoa Inc (AA)
Activist hedge fund Elliot Management Corporation formally announced it has taken a 6.5% stake in Alcoa today, sending AA stock up more than 4% to its highest level in a month.
The stake actually took place shortly after Alcoa announced near the end of September that it was splitting the company into two parts. Elliott is said to have been in favor of that split.
AA stock has been a real market laggard over the past year, falling from $17.66 to a recent low of $7.81. Perhaps today’s action can pull the stock off the bottom.
Tyson Foods, Inc. (TSN)
TSN stock jumped 10% today after the meat processing company announced adjusted fourth-quarter earnings of 83 cents a share on revenue of $10.51 billion, below analysts’ estimates for 88 cents per share, but ahead of the $10.27 billion in revenue predicted by the street.
Investors were clucking excitedly after management said the worst is behind them in beef prices and that fiscal 2016 would bring about $41 billion in revenue and $3.50 to $3.65 per share. Analysts were expecting $3.53 per share.
Tyson also said it will close two prepared-foods plants so as to ramp up production at some of its other facilities.
Macy’s Inc. (M)
Nobody loves you when you’re down and out … that is until an analyst decides your company stock is much too undervalued. Macy’s stock tacked on nearly 4% today after market Hedge Fund Senior Analyst Jeremy Skrezyna predicted that Macy’s could have a 130% upside from its current pricing.
Skrezyna said that Macy’s has about $26 billion extra value in its real estate, which could be refinanced to repay other more expensive debt. Skrezyna boldly predicts that Macy’s could be a $90 stock inside one or two years.
Macy’s took a 14% shellacking a few days ago after disappointing the street on revenue, although it was 3 cents ahead of estimates on EPS.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
