Here are the stories that caught our eye this week.
Buying Apple
Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) made headlines earlier in the week when it disclosed on its quarterly 13F SEC filing that it bought an additional 5.4 million Apple Inc. (NASDAQ: AAPL) shares to go with the 9.8 million shares it already owns. Apple shares rallied on the news before giving up ground later in the week.
Retail earnings
Both Wal-Mart Stores Inc. (NYSE:WMT) and Target Corporation (NYSE: TGT) released earnings this week, and results couldn’t have been more different.
Wal-Mart delighted investors by beating analyst estimates on both its top and bottom lines.
Quarterly earnings came in at $1.07 per share, a full 5% above what analysts expected. It also raised full-year guidance. Shares rallied 2% on the news.
Target, meanwhile, disappointed investors with its results, which included a same store sales decline of 1.1%. The company lowered its earnings guidance from a range of $5.20 to $5.40 per share to $4.80 to $5.20. Shares fell more than 5% on the news.
For-profit prisons
It was a tough week for America’s for-profit prison industry after the Department of Justice announced it would phase out use of controversial private prisons.
Shares of Corrections Corp of America (NYSE: CXW) and The GEO Group Inc. (NYSE: GEO) both got hammered when investors first heard the news, falling more than 50%. They’ve since rallied off lows, but are still down considerably.
The issue with both companies is while revenue will gradually decrease over time, debt and other liabilities will remain. And it’s not exactly easy to turn a prison into something else.
