What Investors Missed in the Market This Week

By Markets Fool.com


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Despite a slow day in the markets following the Thanksgiving holiday, both the Dow Jones Industrial Average and S&P 500 managed to set record highs before pulling back slightly. At the time of this writing, that puts the major indexes on pace for their third straight weekly move higher.

And, in case you were too occupied with a Thanksgiving feast or family football game, here are a handful of companies that made big moves or big headlines this week.

To catch a thief

Shares of fraud protection and identity theft services provider LifeLock (NYSE: LOCK) jumped 15% in the past five days after agreeing to be acquired by Symantec (NASDAQ: SYMC) in a deal of about $2.3 billion, including debt.

Breaking things down further, Symantec will pay $24 a share, which was a 16% premium to LifeLock's closing price on Nov. 18, and Symantec will fund the acquisition with cash and $750 million of new debt. While Symantec doesn't believe the acquisition will materially impact its 2017 results, it does expect annual cost savings from cost synergies to reach $30 million by the end of fiscal year 2018 and up to $80 million annually by the end of fiscal 2020.

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"As we all know, consumer cybercrime has reached crisis levels. LifeLock is a leading provider of identity and fraud protection services, with over 4.4 million highly satisfied members and growing. With the combination of Norton and LifeLock, we will be able to deliver comprehensive cyber defense for consumers," said Symantec CEO Greg Clark in a press release.

The move makes sense for Symantec's strategy to beef up revenue generated from its consumer business portfolio and LifeLock certainly adds a highly relevant service that will combine with Symantec's existing products and services to create the world's largest digital safety platform.

When bad is good enough

Judging by the 13% spike in stock price this week, investors could be forgiven for thinking Deere & Co. (NYSE: DE) posted a brilliant fourth quarter. Honestly, though, the company still faces significant headwinds and it was more of a weak result that managed to top estimates rather than an excellent quarter -- just glance at the numbers for confirmation.

Deere's net sales and revenue dropped 3% during the fourth quarter, compared to the prior year, down to $6.5 billion. Its net income decreased a more dramatic 19% from $351 million during the prior year's fourth quarter, down to $285 million. That equated to a 17% drop in earnings per share, down to $0.90 per share. Despite the decline, it was still much better than Wall Street's forecast of earnings per share of $0.39.

There were a couple of positive takeaways for investors. Including the fact that Deere's fourth-quarter drop in net sales and revenue, as well as net income, fell at a slower pace suggesting the worst may be behind it. Also, CEO Samuel R. Allen noted the company could generate $500 million in cost reductions by the end of 2018, which could certainly help slow down or reverse its bottom-line declines.

Fast and flawed

Tesla Motors (NASDAQ: TSLA) has been one of the most polarizing stocks over the past few years. Its stock price is up an astounding 450% since 2013. It has produced arguably the most impressive electric vehicle to date, and even recently acquired SolarCity amid its ambitions to be more than just an automaker.

However, it's important for investors to keep an eye on the actual product itself, as its current business largely revolves around the success of selling its Model S and X, before the upcoming Model 3 launch. On that note, investors received a little bit of negative news for the Model X this week as Consumer Reports tested and reviewed the Model X and said, "More showboat than functional, the electric Tesla Model X has plenty of high-tech gimmicks but forgets about the 'U' in SUV."

The general theme from the report was that it has limited cargo-carrying ability and, as has been noted several times by consumers, the rear doors are cumbersome and prone to pausing or stopping. These harsh reports aren't surprising to those in the auto industry who understand how difficult it is to produce a "flawless" vehicle, and it's something major automakers have worked on for a century.

All investors can hope is that these smaller flaws and design quirks have been a valuable lesson to learn before the company's Model 3 hits the roads -- because that will absolutely define the company's success in the medium term.

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Daniel Miller has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Tesla Motors. The Motley Fool is short Deere & Company and has the following options: long December 2016 $92 calls on Deere & Company. The Motley Fool recommends LifeLock. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.