When stock markets trade at record highs, investors should avoid slumping stocks.
Five Below (FIVE) posted a troubling “shrink” in the fourth quarter. This includes lost revenue from theft. It resulted in a modest operating income of $268.4 million, or $3.65 a share. Inventory rose to $584.6 million, up from $527.7 million Y/Y.
FactSet Research (FDS) dipped after posting Q2 results. Revenue grew by 6.0% to $545.9 million. FDS stock breached the $450 support line, a bearish sign.
Steelcase (SCS) reported a 3.3% Y/Y drop in revenue. The firm risks failing to report a rebound in organic growth in the mid-single-digit percentage.
Chinese tech firm Kingsoft (KC) pulled back after posting a one-cent per share loss. Investors will lose patience waiting for the firm to post gross margin improvements.
In the media sector, Paramount’s (PARA) on-again, off-again buyout rumors is a red flag. Last week, the stock soared on rumors that Apollo (APO) would buy the firm for $11 billion. On March 22, a report cited people familiar with the matter do not see Paramount selling the movie studio separately.
Warner Bros. Discovery (WBD) fell in sympathy. Risks are increasing that WBD stock will break below the $8.02 support price.
Investors should continue to avoid heavily indebted media firms. High levels of interest rates are hurting their cash flow.
