Updated from 8:03 p.m. to include additional information on after-hours action, Take-Two Interactive's quarterly report.
NEW YORK (
) -- The best stocks in 2012 have been the worst ones of 2011, which doesn't exactly speak well of this rally.
In a research issued Wednesday, Birinyi Associates used nine different criteria to evaluate the performance of the
in January when the index gained 4.4% on a price basis: trailing price-to-earnings ratio, 2011 change, forward P/E, five-year growth rate, yield, price to book, price to sales, debt to equity and market value.
The firm, which noted these metrics are all independent of each other, then sorted stocks by each criteria, divided the index into 10 groups of 50 companies, and calculated the performance of each group. The results were the complete opposite of what played out in 2011.
"In January the worst strategy was to own the 50 stocks with the highest dividend yield at the start of 2012," wrote analyst Jeffrey Yale Rubin. "That group of fifty, on average, lost 1.03%.Perhaps not so coincidentally, that was the best strategy in 2011. The best performing strategy in January was to buy the stocks that were the worst performers last year."
The 50 worst performers of 2011 -- names like
Bank of America
-- returned 11.9% for the month.
So basically, January's buyers were bargain shoppers, a theme that should carry over into the flood of same-store sales reports the retailers will be issuing on Thursday.
The expectation is for an overall increase of 2% from the limited group of retailers who report their monthly performance, according to
, down from 4.8% in the same period a year earlier. Gift card redemptions should be a positive, but the month is also known for being highly promotional in order to get remaining holiday season merchandise out the door.
The discount retailers are seen doing the best, estimated to deliver a 4.8% gain vs. respective increases of 2.8% for department store operators and 0.7% for apparel sellers, and an anticipated 2.7% decline for drug store operators.
The names expected to post the biggest increases, again according to
, estimated to be up 7.3%;
, at 6.1%; and
The lagging retailers are pegged as
, estimated to post a decline of 4.9%;
The Wet Seal
( WTSLA), projected at negative 3%; and
, seen down 2.7%.
Jefferies weighed in with a preview, saying it's expecting mixed results in its coverage universe. The firm thinks Costco with come through with a 7-8% increase, beating the consensus, while
could disappoint with a decline of 2-3% vs. expectations for a 0.8% rise.
should in line with a 2-3% increase, Jefferies said.
"Less precipitation this year versus last year likely benefited industry store traffic and may contribute to a sequential improvement in the sales growth rate at Target and Costco, in a relatively low volume month," wrote the firm, which has hold ratings on all three stocks.
Of course, in addition to the same-store sales numbers, there will be plenty of
talk after the social networking giant
after Wednesday's closing bell. The deal doesn't look so hot for retail investors, as the dual class structure of the stock basically means shares available to the public will be little more than a tracking stock to Mark Zuckerberg's vision.
is the biggest name reporting its quarterly results on Thursday. The drug giant is slated to post its fiscal fourth-quarter numbers before the opening bell, and Wall Street is looking for earnings of 95 cents a share on revenue of $12.53 billion.
Merck shares have been among the Dow's stronger performers in the past year, rising 13.2% and hitting a 52-week high of $39.43 on Jan. 19. With a forward price-to-earnings multiple of 10.1X and a forward annual dividend yield of 4.3%, there's a lot to like about the stock, and the majority of the buy side is bullish with 16 of 22 analysts covering Merck rating it at strong buy (6) or buy (10), and the median 12-month price target at $41, implying potential upside of 6.7% from Wednesday's close at $38.43.
The earnings history is pretty solid on Merck as the company has beaten the consensus view in eight straight quarters, delivering an average upside surprise of around 5%.
Check out TheStreet's quote page for Merck for year-to-date share performance, analyst ratings, earnings estimates and much more.
Other notables reporting early Thursday include
Beazer Homes USA
Diamond Offshore Drilling
National Oilwell Varco
New York Times
Old Dominion Freight Line
Royal Caribbean Cruises
Royal Dutch Shell
Starwood Hotels & Resorts
The late roster includes
is a stock to watch after the close. The stock is up 11.5% over the past year, and the average estimate of analysts polled by
is for a profit of 23 cents a share in the company's December-ended fiscal third quarter on revenue of $249.2 million.
The holiday selling season is Take-Two's time to shine so there's usually very little room for error in this report. Brean Murray, however, previewed the results earlier this week and it's already looking beyond even this quarter to fiscal 2013, saying earnings of $3 per share could be "within reach" for the company.
"The delay of Max Payne 3 makes fiscal 2012 officially a write-off," said the firm, which has a hold rating on the stock. "However, we think EPS of $3 in fiscal 2013 is now within reach if Take-Two were to release GTA
Grand Theft Auto and a AAA franchise title in every quarter (Max Payne 3 in fiscal 1Q13, GTA in fiscal 2Q13, BioShock Infinite and NBA 2K13 in fiscal 3Q13 and Borderlands 2 in fiscal 4Q13)."
Brean Murray said Take-Two shares typically follow the company's earnings, and it could see the stock moving in the $18-$20 range based on enthusiasm for the next Grand Theft Auto release and a higher profit view. At the same time, it's keeping a hold rating on the stock for now.
The economic calendar on Thursday features the Challenger Gray read on corporate layoffs at 7:30 a.m. ET, weekly initial and continuing jobless claims at 8:30 a.m. ET, and the preliminary productivity index and unit labor costs data for the fourth quarter at 8:30 a.m. ET as well.
Ian Shepherdson, chief U.S. economist at
High Frequency Economics
, also notes that Federal Reserve Chairman Ben Bernanke has a date on Capitol Hill on Thursday, and he thinks the visit will be an uncomfortable one.
"Mr. Bernanke will likely be harangued in his House Budget testimony on the economy today, but the roasting will be much less severe than if the FOMC had announced the impending launch of QE3 after last week's meeting," he wrote. "The Fed chairman will likely stick closely to the views expressed in the FOMC statement and in his subsequent press conference, namely that the economy is improving at a modest pace but still faces downside risks, especially from the mess in Europe."
Shepherdson is hoping to see Bernanke get pressed a bit on what the Fed will do if the economy starts to come back at a quicker than expected pace. In other words, how solid is that promise to keep rates "exceptionally low" through at least the end of 2014?
Chipotle Mexican Grill
will be among a bevy of big movers reacting to earnings news on Thursday. Chipotle shares were lower in
after the high-flying restaurant company came in a bit short on profits because of higher food costs, while the strength of JDS Uniphase's report and guidance gave flight to not just its stock but a bunch of other optical networkers as well.
The other standouts in the extended session were
Green Mountain Coffee Roasters
TICKER TYPE="EQUITY" SYMBOL="GMCR"/>, which absolutely destroyed Wall Street's earnings expectations for its fiscal first quarter and said it's expecting sales growth of 60-65% for the full year; and
TICKER TYPE="EQUITY" SYMBOL="QCOM"/>, which continues to ride the tablet wave to earnings glory.
Written by Michael Baron in New York.
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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.