Tesla, Wal-Mart, and 1 Tech Giant's Comeback | MarketFoolery Podcast - May 16, 2013

TL;DR

Tesla Motors is raising $230 million through a secondary stock offering, despite the common expectation that this would lead to a stock drop. Walmart's first quarter earnings were in line with expectations but same store sales fell, and Cisco Systems had higher than expected profits and a good outlook for the second quarter.

Transcript

it's Thursday May 16th welcome to Market fery I'm Chris Hill joining me in studio today from mle fo Supernova Matt Argus singer and from million-dollar portfolio Mr Charlie Travers happy Thursday guys glad to be here uh we're going to talk Tesla motors which appears to be a stock incapable of falling um we're going to talk about uh a couple of big ... Read More

Key Insights

• 🔬 Tesla's CEO personally investing in the secondary stock offering demonstrates confidence in the company's future growth.
• 💐 Walmart's same store sales decline and lowered guidance suggest challenges in attracting customers and increased competition.
• 💪 Cisco Systems' positive performance can be attributed to strong trends in data centers and wireless, offsetting weaknesses in other areas.
• 🎚️ There may be a level of overvalued optimism in Tesla's stock price as the company is perceived as being immune to negative news.
• 🤨 Walmart's long-term prospects remain favorable with plans to raise membership fees for Sam's Club and expand Neighborhood Market stores.
• 📈 Cisco's focus on higher-end products and market trends like cloud computing and big data contribute to their positive performance.
• 🙃 Integration risks and potential write-downs in acquisitions remain a concern for Cisco Systems' long-term success.

Questions & Answers

Q: Why are Tesla's shares up despite the dilution event of a secondary stock offering?

Tesla's shares are up because CEO Elon Musk is personally buying $100 million worth of stock, showing faith in the company's future. This investment adds confidence to investors that the stock value could go higher.

Q: Why did Walmart's same store sales fall and what does this mean for the company?

Walmart's same store sales fell due to factors like delayed income tax refunds, retail foot traffic, and the payroll tax increase. Despite these challenges, Walmart is focusing on raising membership fees for Sam's Club and expanding their Neighborhood Market stores to maintain long-term growth.

Q: What are the key factors contributing to Cisco Systems' positive performance this quarter?

Cisco Systems' positive performance can be attributed to strong performances in areas like data centers and wireless, which follow the trends in cloud computing and big data. Although some parts of their business are not doing as well, Cisco is capitalizing on the growth of these higher-end products.

Q: Will Cisco Systems' recent success continue, and is it a good buy at the current stock price?

While Cisco Systems has had a strong quarter, there is still integration risk with acquisitions and the possibility of write-downs. However, the company has a history of stock buybacks and dividend increases, making it an attractive investment at its current price.

Summary & Key Takeaways

• Tesla is raising $230 million through a secondary stock offering, with CEO Elon Musk personally buying $100 million worth of stock, showing confidence in the company's future.

• Walmart's first quarter earnings were on target, but same store sales decreased and guidance for the second quarter was lowered.

• Cisco Systems had better profits than expected, with strong performances in certain parts of their business like data centers and wireless, offsetting weakness in other areas.