Diamonds and Dogs

1/21/16

Program your representative to make logical trades for you just like today's diamond, Xilinx (XLNX). Xilinx is jumping 8% following better than expected earnings and speculation of a takeover. The company that designs and develops programmable logic solutions, reported in-line earnings while sales rose 7% sequentially to $566 million beating estimates of $554 million. In the conference call, management indicated there is massive consolidation in the industry and that the consolidation will continue. The news of renewed takeover speculation may push Xilinx's stock back toward full valuation.

Remember the childhood story about the Little Engine That Could, saying as it tried to climb the hill, "I think I can, I think I can!" That's what shareholders for today's dog, Union Pacific (UNP) are hoping about the stock price climbing higher once again in 2016. Union Pacific Corp (UNP), the train line that battled across the US in the Great Expansion era in the 1800s, is down 3% after dropping as much as 9% following disappointing fourth quarter earnings and lower guidance for 2016. The stock finished down 40% last year, but with the stock trading for 12 times reduced earnings, brighter skies should be on the horizon.