DLTR, SHLD Top Thursday's Hot Stocks to Watch

DLTR

Hot stocks to watch, August 21, 2014: This quarter, companies in the broad-based S&P 500 Index are expected to post earnings growth of 7.6% over year-ago levels and a revenue rise of 4.4%, based on projections from FactSet.

More than 90% of S&P components have already reported, and the overall financial performance over the April - June period has been solid.

Thursday brings earnings from a dollar store company involved in a takeover battle, a growing branded meat processor, several key retailers, and a couple of tech players.

Thursday's Hot Stocks to Watch

DLTR among stocks to watch

Hot Stocks to Watch No. 1: Dollar Tree Inc. (Nasdaq: DLTR) kicks off today's hot stocks to watch. The discount retailer is expected to report Q2 earnings per share (EPS) of $0.65, up from $0.56 in the same quarter a year ago, when it posts results before the open. The main focus this quarter is likely to be on the company's proposed takeover of Family Dollar Stores Inc. (NYSE: FDO). In late July, DLTR announced it is buying FDO in an $8.5 billion cash and stock deal. Rival Dollar General Corp. (NYSE: DG) added a wrinkle to the deal this week when it came in with a counterbid of $9.5 billion for Family Dollar. Dollar Tree may not have to top Dollar General's proposal to win FDO. Family Dollar's board may settle for a lesser bid in exchange for keeping the company's name, Charlotte-area headquarters, and a position for Chief Executive Howard Levine.

Hot Stocks to Watch No. 2: Sears Holdings Corp (Nasdaq: SHLD) will report Q2 results prior to the opening bell. The ailing retailer is seen posting a sizable 76.7% year-over-year EPS loss of $2.58. Sales are seen slumping 7.9% to $8.17 billion. In the prior quarter, Sears reported an expansion in its EPS loss to $2.44 per share, missing analysts' estimates of $1.91 per share. Like its rivals, Sears has been forced to offer steep discount offers to push sales and clear inventory. The company's fate remains questionable at best. Shares are down a 7.29% year to date.

Hot Stocks to Watch No. 3: The Gap Inc. (NYSE: GPS) reports Q2 earnings Thursday at 4 p.m. Wall Street is looking for the leading apparel retailer to report Q2 EPS of $0.69, up from $0.64 in the same quarter a year ago. Gap overcame a number of headwinds in Q1, including harsh weather, higher costs of goods sold, and occupancy expenses, and still surprised to the upside. Amid a more favorable retail environment, Gap is expected to post a solid Q2.

Hot Stocks to Watch No. 4: Aeropostale Inc. (NYSE: ASO) reports after today's closing bell. Expectations have the struggling teen-focused retailer reporting a Q2 EPS loss of $0.58, up sharply from a loss of $0.34 in the same quarter a year ago. Whisper numbers are much less glum, calling for an EPS loss of $0.42. Monday, ARO announced that Julian Geiger, the company's chief executive officer from 1998-2010, is retaking the reigns after a disastrous few years for the NYC-based retailer. Investors applauded the news and sent shares up 20%. Still, ailing ARO shares are down a punishing 57.32% year to date.

Hot Stocks to Watch No. 5: Hormel Foods Corp. (NYSE: HRL) is scheduled to report fiscal Q3 earnings Wednesday morning. Analysts are looking for the specialty meat processor to post EPS of $0.48, up from $0.42 in the same quarter a year ago. Earlier this month, Hormel announced it completed a $450 million purchase of CytoSport Holdings Inc., the maker of Muscle Milk products. Hormel Foods expects the acquisition to provide about a nickel per share accretion in fiscal 2015, with a neutral impact to fiscal 2014 earnings, including transaction costs. Hormel shares are up 5% year to date.

Hot Stocks to Watch No. 6: GameStop Corp. (NYSE: GME) reports Q2 numbers after today's close. Expectations are for the video game retailer to post EPS of $0.18, double the EPS of $0.09 reported in the same quarter a year ago. Shares have underperformed the S&P 500 by 35% in the past year amid worries "that shifting technology will turn GameStop Corp. from a hugely profitable operation into a dinosaur," according to The Wall Street Journal. Investors should take particular note of gross margins. "Any sign of unexpected slippage should send investors scrambling to return their GameStop shares before they get slapped with a late penalty," The Journal wrote ahead of the Q2 report.

Hot Stocks to Watch No. 7: Intuit Inc. (Nasdaq: INTU) reports fiscal Q4 results after the closing bell. Projections are for the parent company of QuickBooks to reports EPS of $0.07, up from $0.00 in the same quarter a year ago. The company posted a negative earnings surprise in three out of the last four quarters. INTU recently completed the acquisition of mobile bill payment startup Check Inc. which should add value for its customers and, in turn, boost its customer base. INTU's seasonal tax business, however, faces increased competition. Nonetheless, analysts remain enamored with INTU shares. The consensus recommendation on the stock is "Buy." Shares hit an all-time high of $85.58 last week and are up 11.27% year to date.

Hot Stocks to Watch No. 8: Salesforce.com Inc. (NYSE: CRM) will report Q2 results after the close. The Street is looking for EPS of $0.12, up from $0.09 in the same quarter a year ago. Revenue from the provider of cloud-computing solutions is expected to come in at $1.29 billion. Deutsche Bank analyst Karl Keirstead recently said that based on various checks within the Salesforce ecosystem, the company will likely report a solid quarter - but not a blowout. Keirstead commented that Salesforces' new president is doing an excellent job with driving growth and delivering results that are more predictable. The firm rates the stock "Buy" with a $65 price target. At a current $55.05, shares are nearly unchanged since the start of the year.

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