Here are Doug Kass' top thoughts on some of the biggest stories of the week.
Starbucks and Disney Continue to Roll Over
I recently added to both shorts.
In " How High Can You Go? Steep Product Pries Could Ding These Stocks" I highlighted the vulnerability of Starbucks and Disney -- two companies that sell high priced latte, expensive cable subscriptions and elevated theme park admission prices. In both cases, demand elasticity will likely reduce secular profit growth rates for these over-owned and still popular stocks.
As Jim "El Capitan" Cramer wrote in his closing missive, the market is growing more discerning.
Priceline and Disney in After-hours ActionAfter hours:
* Priceline ( PCLN) reports better but guides below consensus. Shares -$130/share, a little over 6%. Not a name.
* Disney ( DIS) reports a three cents beat, while revenue misses by about $200 million. Shares -$3/share. I have been steadily shorting this popular stock recently (it's been on my Best Ideas List for almost two years) based on my projection of less than +10% annual EPS growth (down from +18% historically/year and analysts' consensus of +13%/year forward annual growth).
DIS announces the consolidation of their ownership in streaming company (Bamtech for almost $1.6 billion) which will give the company more control of its destiny. (In response, Netflix (NFLX) - $9/share). I will have more after the conference call and post a review of the earnings report.
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- How he's pondering a few things about North Korea
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