Weekly Market Overview

U.S. markets were mixed early this week after Monday's holiday after declines overseas put pressure on many indexes. The Fed is due to release its latest meeting minutes this afternoon, which could cue traders in to any upcoming changes to the interest rate policy. The latest ADP employment reports came in lower than expected while nonfarm payrolls are due out on Friday. Whether the market can continue its record run remains to be seen; investors will be carefully watching the economic figures coming out this week to determine if this rally may finally be coming to an end.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
   
2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. Meanwhile, the company has promoted its CFO to CEO, so the company finally has some direction from a financial-minded officer.
   
3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
   
4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Two weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. Shares spiked yesterday on talks of a possible deal...
   
5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!
   

Technical Analysis

1. Archstone-Smith Trust (ASN) - Intermediate term bullish double bottom
2. Cemex S.A. B de C.V. (CX) - Intermediate term bullish ascending continuation triangle
3. Foundry Networks (FDRY) - Long-term bullish continuation diamond
4. Big Lots (BIG) - Intermediate term bullish symmetrical continuation triangle
5. H.J. Heinz Company (HNZ) - Long-term bullish continuation diamond
   

Stock of the Week : Packeteer Inc. (PKTR)

Packeteer Inc. shares moved last week after Elliott Associates disclosed a 6.3% stake in the company and communicated their belief that the board of directors should be directing their attention to a prompt sale of the company. The activist hedge fund reasoned that the company had failed to adequately perform and therefore should be sold in order to unlock value for shareholders. In particular, Elliott Associates noted that the company possesses a leading technology in one of the fastest growing segments of the networking market but has been unable to capitalize on this advantage.

Tip of the Week : How to Value Retailers

Consumer spending is perhaps the most vital aspect of our economy and no industry feels its effects more than the retail industry. Retail is the second largest industry in the United States both in the number of stores and employees. It collectively generates approximately $3.8 trillion in sales annually ($4.2 trillion including food sales), which works out to approximately $11,993 per capita. Not only do people spend a significant portion of their income on retail products, but 11.6% of the U.S. population is also employed by retail establishments. In fact, retail trade accounts for about 12.4% of all business establishments in the United States, with the largest obviously being Wal-Mart. So, just how can these companies be evaluated? The answer lies in something called Comps... Read More

Final Words

The market remains optimistic despite questionable economic indicators and rising energy prices. Investors will be carefully watching the economic figures coming out this week to determine if this rally may finally be coming to an end.