Companies with Something to be Thankful For

Joel Anderson |

Thanksgiving ThankfulThis is the time of year to take stock of what you have to be thankful for. Or just to take stock if you see a buying opportunity. Either way, there are a number of companies (and people) that can look back on 2011 so far and be thankful for everything that's happened to them year-to-date.

"Better Lucky Than Good"

First up: Seagate Technology PLC (STX). The flooding in Thailand was most certainly not a reason to give thanks for almost everyone involved, but it did have certain unintended consequences for Seagate. Thailand is a manufacturing hub, and the flooding lead to major disruptions of supply chains for a variety of different companies, including Apple, Inc. (AAPL), Toyota Motor Company (TM), and Honda Motor Company (HMC). However, one of the hardest hit segments was technology manufacturers. Over a quarter of the world's hard drives are made in Thailand and the flooding forced Western Digital Corporation (WDC), the world's largest hard drive maker, to close its factories for repairs. Even as Western Digital, Seagate's biggest rival, had to report expectations that its supply chain could be seriously disrupted until June of 2012, Seagate's Thai factories miraculously came out of the floods unscathed. With their factories still operating, Seagate's shares leapt 27 percent and have continued gaining since, now up 34 percent since the Oct. 21 revelation of their good fortune.

"A 500-Percent Return? Well, I Guess..."

Next: Pharmasset, Inc. (VRUS). Stocks quintuple in value over the course of a year all the time, right? No? Well, that's precisely what Pharmasset has done since the start of the year. The Princeton, NJ-based laboratory has posted a 520-percent gain in share price year-to-date, completed by a coup-de-grace on Monday when it nearly doubled in value on news that it was being bought by Gilead Sciences, Inc. (GILD) for $11 billion, paying an 89-percent premium on the share price at market close Friday. All told, Pharmasset shareholders would have a lot to be thankful for even before cashing in on Gilead's major mark-up. Pharmasset is poised to jump into a largely untapped market for treatments for Hepatitis C with PSI-7977, a nucleotide analog polymerase inhibitor for the treatment of chronic hepatitis C. Even before news of the buyout, shares had more than doubled in value as good news from trials of PSI-7977 continued to stream in throughout the spring and summer.

"How Shall I Divi-spend This?"

Third: shareholders in American Capital Agency Corp. (AGNC). American Capital is real estate investment trust that, over the course of 2011 has seen its share price drop almost 3 percent. And that poor performance coming from a company that's only offering a ho-hum dividend yield of just over 20 percent. American Capital has acted like an ATM for its shareholders, giving back yields exceeding 20 percent since September 2008 (since which point the share value has also gone up almost 50 percent).

"So THAT'S What it Feels Like to Lose $12 billion..."

Our last installment: NOT Netflix, Inc. (NFLX), which underwent a collapse that would be better suited for a Shakespearean tragedy than the Nasdaq. Our story begins in early July when shares in Netflix are trading at around $300 apiece and the company's market cap had peaked $16 billion. However, CEO Reed Hastings, apparently deciding that he hated money and/or his customers, announced a series of major changes to the the way the company did business. On July 12, Netflix announced that it would be instituting a 60-percent price hike for those consumers who intended to continue using both streaming and DVD services. Then, on Sept. 18, Netflix announced the decision to separate its DVD and streaming services, creating a subsidiary Qwikster to handle mailing DVDs. The decision was immensely unpopular, prompting a very public backlash by Netflix customers and a reversal from Netflix within a month.

Netflix had to report the loss of over 800,000 subscribers in their Q3 earnings report later that month, prompting another sell off, then on Monday announced that it expected to lose money in 2012 due to rising content costs and increased expenses related to its expansion into the U.K. and Ireland, prompting yet another sell-off that saw shares hit their 52-week low of $69 a pop. All told, Netflix has lost over $12 billion in market capitalization in a matter of four months.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
AAPL Apple Inc. 116.60 -0.46 -0.39 23,192,665
AGNC American Capital Agency Corp. 19.48 0.00 0.00 1,301,631
BOH Bank of Hawaii Corporation 74.02 -0.16 -0.22 117,071
GILD Gilead Sciences Inc. 74.29 -0.02 -0.03 8,256,474
HMC Honda Motor Company Ltd. 29.79 0.12 0.40 800,307
NFLX Netflix Inc. 127.50 4.15 3.36 18,832,428
STX Seagate Technology 34.50 -0.48 -1.37 4,484,120
TM Toyota Motor Corporation 115.27 -0.87 -0.75 174,701
WDC Western Digital Corporation 53.07 -0.79 -1.47 2,764,605


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