Investment Oppurtunities or Danger Zones? BestBuy, CSX, and GE

        As the big banks reported earnings this week the stock market was ripe with volatility, and if you were lucky you managed to capitalize on the upswings. But I do not want to analyze earnings from the big banks since most beat earnings instead I want to discuss potential opportunities in some of the market movers this week.

       - Best Buy Co Inc.

       Lets face it this week proved to be a disaster for the technology retail giant. The stock was off almost 35% this week as the company announced disappointing holiday sales which fell 2% from last year. This dramatically underperformed Wall Streets expectations which were that holiday sales would rise 4-5%.

       The crash in Best Buy stock was surprising for some since the company seems to be in the middle of a turn around with the stock up nearly 150% before this weeks crash. And with C.E.O Hubert Jolly's plan of matching the prices of online competitors like Amazon. 

       Realistically speaking Best Buy's stock crash should of been foreseen since the companies earnings although stable did not grow enough to justify the rapid growth of the stock, and with consumers shopping more and more online Best Buy would of had to post a dramatic gain in holiday sales if it was to continue being a momentum stock.

       Those sales did not materialize and the Best Buy bubble popped. Now the question becomes, what's next for the technology retailer? Based on fundamentals I would not touch Best Buy, the company is unprofitable, and rapidly losing ground to online competitors.

       With this said BestBuy is not a lost cause. The company notified shareholders that online sales were up. This means that if BestBuy focuses its time and money on its online retail business then the company would continue to survive well into the future.

       As of right now though BestBuy is a dinosaur that will inevitably go out of business and I would not invest.

       - CSX corp

       Normally I would not invest in railroads because as gas prices fall across the country the advantages of shipping freight by rail become nullified. But on Thursday CSX, a multi billion dollar railroad giant announced disappointing 4th quarter earnings that sent shares of the company spiraling down. (The stock was down almost 7% at the close of Thursday's trading day.)

       CSX announced earnings of $426 million on $3 billion of revenue. This is a decline of nearly 5% from last year. Profits were dented mostly because of low demand for coal, coupled with a rise of expenses attributed with it.

       A drop of profits by a margin of 5% is not a good thing but the sell-off that followed was overdone. I agree shares should of fell but not as heavily as they did. Also besides the shipment of coal falling other parts of CSX's business were good.

       Chemical shipments which include the shipment of crude oil increased 18%, agricultural shipments increased 16% and the shipment of intermodal containers increased 11%. Also CSX is by no means a troubled business, the company operates 21,000 miles of track in 23 eastern states and 2 Canadian provinces. Also after the stocks slide on Thursday the stock trades at only 14.9x earnings which is well below the industry average of 18.5x. 

       I bought up call options on CSX stock and expect a large profit sometime next week, if you are lucky you can get in on the action on Tuesday when the market reopens. For the short term anyway this stock in my opinion is a buy. 

- General Electric

       GE was another corporate giant that announced earnings this week, but unlike the previous two companies I have mentioned GE stock did not have some kind of dramatic swing. General Electric stock was down just 2.28% on earnings. Normally this is what should happen when a company announces poor earnings that did not meet expectations, the hing GE announced 4th quarter earnings that did meet expectations. 

       GE announced operating earnings of $5.4 billion or $.53 a share, an increase of over 20% from last year. In what way does this warrant the stock falling. Honestly I think this is an opportunity to buy into GE but this is not a short term buy. Like I said on previous posts I think GE is a perfect retirement stock and if you need a place to put your money right now GE is the place to put it. 

       These three companies are just a few that were impacted by last weeks events. Other movers were credit card companies American Express and Capital One, both of which missed earnings estimates by the way. Most of the major banks announced earnings that were mixed some like Morgan Stanley ended 2013 well others like Citigroup not so much.  

       Some of these companies provide good opportunities to invest and I don't have to the time to talk about them all, you will have to do the research yourself and make your own decision on whether investing in these companies is the right decision. 

       Some notable companies that announce earnings next week are Dow components IBM and Johnson & Johnson. But in my opinion the companies to look out for this week are Netflix and Delta Airlines, both of these companies were heavy gainers last year and if BestBuy was any indication these companies have to deliver fantastic earnings to keep Wall Street on the hook.

       If I was to make a prediction I would think that Delta will exceed expectations since the company although seeing its stock price more then double still trades at a decent value. Netflix on the other hand I think will disappoint since the company has seen its shares triple last year and currently trades at a very high premium to the market. 

PLEASE POST COMMENTS ON HOW YOU LIKED THIS WEEKS ENTRY SPECIFICALLY THE NEW FORMAT.

I WILL BE POSTING ONCE EVERY WEEKEND ABOUT MY OPINIONS ON THE MARKET AND VARIOUS INVESTMENT OPPORTUNITIES I HAVE FOUND.

IF YOU LIKED THIS ARTICLE FEEL FREE TO SPREAD THE WORD SINCE I AM CURRENTLY ADVERTISING SOLELY THROUGH WORD OF MOUTH