Hilton Shares Spike 7.5 Percent In Stock Market Debut

Stock Market Today: The Booming Market for $700,000 Homes





This is the largest ever IPO for a hotel company. Hilton owns more than 4,000 properties worldwide, and its success is an abrupt turnaround from its performance leading into the recession, when private-equity firm Blackstone Group bought the company for $26 billion in 2007. Blackstone didn't sell any shares in the IPO, but Hilton sold 117.6 million shares to raise $2.35 billion. For the first nine months of 2013, revenues rose 1.7 percent to $2.98 billion and profits spiked 24 percent to $389 million from the prior year.









Lululemon could use a boost along those lines: Analysts expect it to log quarterly revenue growth of just 18% when it reports earnings later this week, which would be the company's slowest expansion rate since 2009. Lululemon's stock is up 2.8% in premarket trading. Finally, AutoZone booked sales of $2.1 billion for its fiscal first quarter, an improvement of 5.1% from the year-ago period. Same-store sales inched higher by less than a percentage point. Still, profit rose by 7.2%, while earnings per share jumped by 16% thanks to the company's aggressive share repurchasing throughout the quarter. The auto parts distributor also saw profitability tick higher, to 51.9% of sales.





Stock Buybacks at Market All-Time Highs: Poor Use of Corporation Capital





By my thinking most of these stock buybacks are going to be underwater once QE ends this summer of 2014, and the stock buybacks are going to be net losses for these companies down the line. How do responsible boards allow this type of behavior, buying back stock at exceptionally high levels? Furthermore, once interest rates start rising and companies have to start raising capital where do you think it is going to come from? These same shares are going to return to market at much lower prices, further pushing stock prices down vie share dilution. This is the exact opposite of how a solid business would want to manage operations, cash on hand, borrowing, and managing stock buybacks. The reasoning is that this is all setting up future earnings to be real bad when all these shares come back to market for equity raises, which you know is inevitable, and these stocks are going to have just terrible does the elevation group work quarters, further sending their stocks down in the process. Market Crash Inevitable All the factors are coming together for quite a correction in stocks at some point down the line, and this is just another example of buying time now, but paying a heavy price in the future. All of which further exemplifies why we are going to have another huge market crash, the boom and bust cycle of credit markets, and how every investor better be damn good at market timing.