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Wednesday, January 07, 2009
Market Winners & Losers: Supervalu, Consol Energy
Michael Goldstein
FOXBusiness
Tuesday ended trading with all of the major indices falling sharply, but there were a few gainers swimming upstream against the river of red. Here are some of the day’s winners and losers.
Winners
Monsato (MON)
The world's biggest seed maker saw its first-quarter profit more than double, citing higher sales to Latin America and raised expectations for the year. The stock rose $12.94, or 18%, to $86.16.
Family Dollar Stores (FDO)
FDO beat Wall Street’s estimates with earnings of 42 cents per share with a 14% increase in first-quarter earnings as bargain hunters increasingly turn to the discount retailer. Analysts had forecast earnings of 40 cents per share. Shares rose $3.48, or 14%, to $27.81.
Supervalu (SVU)
The grocer’s shares rose on better-than-expected earnings of 62 cents per share against the analyst forecast of 60 cents per share, and announced plans to pay down debt by closing stores and cutting spending. The stock gained $1.24, or 8.2%, to $16.33.
Ciena (CIEN)
Shares continued to rise, advancing 64 cents, or 7.6%, to $9.04 after Barclays Capital analyst Jeffrey Kavaal upgraded the stock on Tuesday, saying he expected the telecommunications network equipment maker company to outperform its lagging industry.
Goodyear Tire & Rubber (GT)
Here’s something positive from the bailout talk -- shares continue to rise as investors bet that the government loan packages will stimulate the automotive industry. The stock gained 44 cents, or 5.9%, to $7.95.
Losers
American Capital Ltd. (ACAS)
ACAS followed the majority of the financial sector into the red, falling $1.07, or 15%, to $6.24, giving up a portion of yesterday’s gains.
Wynn Resorts Ltd. (WYNN)
With analysts projecting more industrywide troubles in 2009 and competitor MGM Grand scaling back Las Vegas development plans, shares in this casino operator slid $8.05, or 15%, to $47.23..
Lincoln National Corp. (LNC)
LNC was another victim of the general decline in the financial sector. Recent news of an investigation into the company’s employees savings and profit sharing plan didn’t help either, as the stock fell $3.58, or 14%, to $21.22.
Consol Energy Inc. (CNX)
The coal sector was down on Wednesday overall, adding to Consol’s woes from its announcement earlier this week regarding the closure of one of its Southwestern Pennsylvania mines. CNX shares fell $5.22, or 14%, to $31.37.
Wyndham Worldwide Corp. (WYN)
Here is another hotel and resort company feeling the pinch. Wyndham saw its shares drop with the rest of the casino industry based on a troubling 2009 outlook, falling $1.11, or 13%, to $7.60.
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Not everyone has the financial ability to own and rent out multiple houses for extra income. And even fewer people want to deal with late night calls from tenants crying about their broken oil burner. Well, thanks to real estate investment trusts, or REITs, you don't have to deal with the stresses of being a landlord to make money off of the real estate market.
A REIT is any entity that pools money from a group of investors to buy different kinds of real estate or real-estate-related assets, such as buildings or mortgages on buildings. It uses the income from rent and loan interest to pay out a steady monthly dividend to its investors.
There are three types of REITs. The most common one is an equity REIT, which simply buys buildings and generates revenue from the rent it charges. Mortgage REITs loan out money to owners of real estate for mortgages or buy existing mortgages to collect interest, which is then paid out to the REIT's investors. Finally, there are hybrid REITs, which are a combination of mortgage and equity REITs.
REITs can be public or private. Public REITs are bought and sold just like stocks and are listed on exchanges, while private REITs can only be bought through direct-participation programs. With private REITs, the investors are actually part owners of the real estate rather than just shareholders of the REIT corporation. They can't sell shares and they typically have to keep their money tied up for eight to 12 years. However, there's the benefit of less volatility since the market can influence public REITs.
One potential drawback to REITs is how they are taxed. While qualifying equity dividends are normally subject to only a maximum of 15%, the dividends from REITs are taxed as regular income, which could be much higher -- depending on how much money you make.
