Garmin Trying to Find Its Way After Pulling 2009 Guidance
are up more than 11% this morning, despite reporting fourth-quarter profit dropped to 78 cents a share, from $1.39 a share a year earlier.
The navigation-device maker reported revenue fell 14% to $1.05 billion, which was below the street expectations for $1.12 billion. The company reported a drop in its gross margin to 41.1% -- citing a decline in the average selling price of its devices during the holiday season.
Looking ahead, management said it would not provide an outlook for 2009 due to a lack of visibility.
We have avoided shares of Garmin since our early June coverage began, when the stock was trading at $51.34. The company has a 4.94% dividend yield, based on Friday's closing stock price of $15.17.
The stock has technical support at the $10 to $12 price range. If that fails to hold, we could possibly test the all-time lows of $7 per share. If the company can turn things around, we see overhead resistance at the $22 level. We would remain on the sidelines for now.
Garmin is not recommended at this time, holding a Dividend.com Rating of 2.8 out of 5 stars.
Nova Chemical Shares Jump Threefold on Deal News
( NCX) shares are up threefold this morning after the chemical company said it has agreed to be acquired by International Petroleum Investment for $6 per share, or about $499.2 million.
Like the rest of the companies in the chemicals sector, Nova Chemicals has been hurt by slumping prices and a weakening demand for plastics. The company recently announced it was cutting 400 jobs worldwide.
Investors should not fret about missing out on this takeover. We have avoided shares of Nova since our early June coverage began, when the stock was trading at $27.22. The stock closed at $1.34 on Friday, so it would have been more luck than skill to know that a company would be coming in at this point to make an offer for Nova Chemicals. We will look at other chemical makers that can potentially see a lift from this deal announcement and keep subscribers updated of any potential investment angles.
Nova Chemicals is not recommended at this time, holding a Dividend.com Rating of 2.6 out of 5 stars.
Developers Realty Posts Fourth-Quarter Loss of $190 Million, Changes Dividend Payout Structure
Developers Diversified Realty
are down slightly after the REIT (real estate investment trust) reported a fourth-quarter loss of $190.2 million, or $1.57 a share, compared with net income of $32.2 million, or 27 cents a share, in the year-ago period.
The company sold 11 shopping center properties, aggregating 0.4 million square feet for approximately $35.6 million and recognized a net loss of approximately $3.0 million in the fourth quarter of 2008.
The company's board of directors has approved the payment of Developer's first-quarter dividend in a combination of cash and shares of the company's common stock. Developers Realty intends to limit the aggregate amount of cash payable to shareholders in the dividend to 10% of the total dividend paid. This new payout initiative is a part of its strategy to further enhance liquidity and maximize free cash flow and maintain its REIT status.
We removed shares of Developers from our "Recommended" list back on July 9, when the stock was trading at $30.33. The company is following the lead of
Simon Property Group
by changing how it pays out its dividend to mostly stock, rather than 90% cash as was the norm. This heightens the uncertainty of the stock and we would look elsewhere for better investment opportunities at this time.
Developers Diversified Realty is not recommended at this time, holding a Dividend.com Rating of 2.3 out of 5 stars.
Deutsche Bank Analyst Ups Exxon to a Buy
are up slightly this morning after an analyst from Deutsche Bank upgraded the oil giant to a buy from a hold.
The analyst has a $80 target on Exxon and believes the company's quality assets and management have equipped it to be positioned well during the economic downturn. The analyst also believes the company may be one of the few players in the oil sector that can maintain a share buyback in 2009.
We had removed shares of Exxon Mobil from our "Recommended" list back on July 31, when shares traded at $84.38. The company has a dividend yield of 2.25%, based on last night's closing stock price of $71.23. The stock has technical support in the $62 to $65 price area. If the stock can firm up, we see overhead resistance around the $83 to $85 levels. We would remain on the sidelines for now.
Exxon Mobil is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.
At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.
Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.