Stock Analysis & Ideas

Thursday’s Pre-Market: Here’s What You Need To Know Before The Market Opens

U.S. futures were stronger on Thursday as minutes from last month’s Federal Reserve meeting indicated that further progress on the economic recovery would need to be made before the massive bond-buying program could be scaled back.

Dow futures were trading flat, S&P futures were 0.3% higher and NASDAQ futures were leading the way, up around 0.93% at the time of writing.

Investors are waiting for earnings results from Constellation Brands (STZ), ConAgra Foods (CAG) and Apogee (APOG) before the bell, while WD-40 (WDFC), PriceSmart (PSMT) and Kush Bottles (KSHB) are expected to report after the market closes.

Castor Maritime (CTRM) was the most actively traded stock in the pre-market with over three million shares having already changed hands. The stock looked set to open around 4% lower at the time of writing.

Vericity (VERY) was the strongest stock before the bell climbing over 100% at one point. There is no fundamental news to support the price move but discussions involving the stock have been circulating on social media and trading platforms since yesterday.

Meanwhile, Kentucky First Federal Bancorp (KFFB) was the weakest stock before the open falling 36%. The company’s board of directors declared a $0.10 cash dividend  payable on May 17 to shareholders of record on April 30.

In corporate earnings news, Paychex (PAYX) reported a 3% year-over-year decline in revenue to $1.1 billion while operating income came in flat at $468.6 million. According to CEO Martin Mucci, “Client retention remains strong and at record levels, and our results for the third quarter show that our resilient business model has helped us navigate the uncertainties created by COVID-19.”

Simply Good Foods (SMPL) reported better-than-expected Q2 results and provided full year fiscal 2021 guidance that topped analysts’ estimates. Adjusted earnings in the second quarter rose 8.7% year-over-year to $0.25 per share, beating consensus estimates of $0.22. Net sales inched up 1.5% to $230.6 million and surpassed analysts’ expectations of $230.1 million. The company projects net sales and adjusted earnings for fiscal 2021 to be in the range of $930-940 million and $1.07-$1.11 per share, respectively, versus consensus estimates of $928.73 million and $1.03 per share, respectively.

Shares of Lamb Weston (LW) fell 3.6% on Wednesday after the company reported lower-than-expected fiscal Q3 earnings. Adjusted earnings decreased 41% year-on-year to $0.45 per share and missed analysts’ estimates of $0.51 per share, while net sales declined 4% to $896 million and topped analysts’ expectations of $816.45 million. “We remain optimistic that overall demand in the U.S. will steadily return to pre-pandemic levels around the end of calendar 2021, and that global category growth will resume at historical rates soon thereafter,” said CEO, Tom Werner.

In M&A news, global investment firm KKR (KKR) is acquiring a majority stake in Therapy Brands. KKR’s other behavioral healthcare investments include Blue Sprig Pediatrics and BrightSpring Health Services, and it has invested in healthcare technology companies WebMD and Clarify Health. Therapy Brands currently serves over 28,000 healthcare practices across the U.S.

Cannabis products provider Valens (VLNCF) has entered into a supply and distribution agreement with Manitoba Liquor and Lotteries Corporation to distribute products to private retailers with an LGCA-license in Manitoba. “Expanding our domestic distribution capabilities is one of our top strategic initiatives to drive growth this year and beyond,” said CEO, Co-Founder and Chair, Tyler Robson.

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