What to Watch This Week: Hot Toys, Cold Drinks and Citi's Champs
There's never a dull moment on Wall Street. Let's go over some of the items that will help shape the week that lies ahead.
1. I Can't Believe That Microsoft 8 the Whole Thing: The Windows 8 hype is starting to build. Microsoft (MSFT) revealed last week that its new operating system will ship to its PC partners next month. The consumer retail version of Windows 8 Pro will be available in late October.
Microsoft claims that this will be its biggest rollout in years, and it's easy to see why. Windows 8 takes the world's most popular operating system platform to a new level as the first Microsoft OS that is built to work seamlessly with touchscreen devices.
In other words, we're not just talking about PCs and laptops running Windows. Tablets and eventually smartphones may be running it.
We may get some more insight when Mr. Softy reports its latest quarterly financials on Thursday. Analysts see a slight dip in profitability, but investors are more excited about the future than the past right now when it comes to Microsoft.
2. Coke Is It: The world's largest pop star reveals its latest quarterly report on Tuesday.
Coca-Cola (KO) is usually rock-steady in its performance. Inexpensive sugary carbonated beverages have proven consistently recession-resistant.
An interesting sidebar to the Coca-Cola story is that it's been locking horns with home-based beverage maker SodaStream (SODA). Coke's legal eagles sent a cease-and-desist letter to the Israeli-based SodaStream after a promotional exhibit in South Africa showing the waste that a typical family consumes in a set number of years contained Coke products.
SodaStream fought back, arguing that if Coke wanted its cans, it shouldn't have let consumers unload them in landfills, where the company collected the cans and bottles for its exhibit. SodaStream then raised the stakes by sending one of its "cage" exhibits to Coca-Cola's home city of Atlanta.
Coca-Cola is unlikely to comment about the SodaStream situation during its conference call, but it may make things interesting.
3. Bidding for Attention: How long will it be before eBay (EBAY) changes its name to PayPal? After all, between eBay's namesake auction site and its financial payments platform, PayPal is the one growing considerably faster and now with a larger base of active accounts.
Needing to change its name may very well be a good problem to have, even though eBay's own marketplace business has started to pick up. PayPal is starting to branch out of its dot-com roots. Several bricks-and-mortar retailers are now starting to accept PayPal as a payment option at the cash register.
We'll get a good snapshot of both eBay and PayPal when the parent company of both dot-com giants reports on Wednesday. Analysts see a profit of 55 cents a share, up from the 48 cents a share it rang up a year earlier.
4. We Are the Champions: Citigroup's analysts have what they call a Champions list, detailing the stocks that they feel will deliver superior returns as a result of valuation and momentum.
Citi's list turned heads last week when Apple (AAPL) was given the boot from the list. However, three new stocks were also added. Ford (F), Johnson & Johnson (JNJ), and General Electric (GE) are now on the Champions list.
Ford reported better-than-expected sales for the month of June recently, but we'll get an even better picture of Johnson & Johnson and GE as both blue chips will be serving up fresh quarterly results this week.
5. Where the Toys Are: It's never too soon to start getting excited about the hot toys for the upcoming holiday season. After all, the toy fairs and retail orders actually start piling on now ahead of the frenetic shopping season.
Leading toymaker Mattel (MAT) reports on Tuesday, alongside smaller playthings maker JAKKS Pacific (JAKK). Mattel rival Hasbro (HAS) doesn't crack open its quarterly toy chest until next week.
All three toy manufacturers are expected to be profitable, but the problematic trend for investors is that all three are projected to earn less than they did a year ago. The market's already braced for that, so the bottom-line weakness has been discounted in the share prices.
What will really move these stocks in the coming days is any hint as to how the upcoming holiday toy-buying season will play out.
Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article, except for Ford. The Motley Fool owns shares of SodaStream International, Hasbro, Microsoft, Apple, Ford Motor, Coca-Cola, Johnson & Johnson, and Citigroup. Motley Fool newsletter services have recommended buying shares of Ford Motor, Johnson & Johnson, Apple, Hasbro, Coca-Cola, Microsoft, eBay, SodaStream International, and Mattel. Motley Fool newsletter services have recommended creating a bear put spread position in Mattel, a diagonal call position in Johnson & Johnson, a synthetic long position in Ford Motor, and bull call spread positions in Apple and Microsoft.