Cassandra Hubbart/AOL There were plenty of winners and losers this week, with a mattress retailer making another shrewd acquisition and a luxury real estate developer posting a surprising slide in orders for new homes. Here's a rundown of the week's smartest moves and biggest blunders. Toll Brothers (TOL) -- Loser Homebuilder stocks took a step back after Toll Brothers reported quarterly results. It was a strong showing on both ends of the income statement. Revenue soared 53 percent on rising home prices and a 36 percent spike in delivered properties. Profitability more than doubled. However, the market was spooked by a surprising year-over-year decline in the number of contracts the homebuilder signed during the quarter. Toll Brothers builds luxury homes: the average price of a home contracted in its latest quarter was $717,000. It also didn't help that the cancellation rate moved higher during the quarter. Weakness at Toll may not necessarily doom the rest of the industry. Home shoppers may simply be experiencing sticker shock at Toll's developments. However, slowing orders translates into weaker deliveries in the future. Mattress Firm (MFRM) -- Winner Shares of Mattress Firm moved 10 percent higher on Thursday after the company announced that it will be acquiring a smaller California chain in a $425 million deal. The move will add 310 Sleep Train stores to Mattress Firm's growing empire of specialty mattress retail outlets. Sector consolidation has been a big part of Mattress Firm's success since going public a few years ago. It's a retailing niche that's highly fragmented, making it easy for Mattress Firm to use cash and stock to scoop up regional faves. The best thing about the deal is that it will be accretive to earnings. Mattress Firm expects the deal to pad earnings per share in the first full year after closing, and that's something you don't see in too many acquisitions. Home Depot (HD) -- Loser Customers shopping for new lighting fixtures or cans of paint at Home Depot may have gotten more than they bargained for this summer. Cybersecurity tracker Krebs on Security has reported that several banks were singling out the home improvement retailer as the source of a "massive" data breach of customer credit and debit card information. The report suggests that the breach was executed by the same Russian and Ukrainian hackers responsible for the data theft that soured Target's (TGT) holiday shopping season last year. Home Depot's CEO said on Thursday that the store is still investigating the situation, promising that customers won't be liable for any fraudulent charges. It's the right thing to say, but anyone who has ever had their ID swiped knows that it's not just about the charges. Target still hasn't bounced back in terms of traffic since December's breach. Home Depot will need to make sure that customers can trust the superstore chain again. Nevada -- Winner Tesla Motors (TSLA) is tapping Nevada as the home of its new Gigafactory that will build batteries that can propel as many as 500,000 electric vehicles a year. Several states were vying for the plant, hoping to land the industrial jobs that are often in short supply. It remains to be seen if Tesla will be able to make the most of the eventual plant's capacity. It's selling fewer than 3,000 cars a month at the moment, but a new model should boost its annual production closer to 100,000 a year by the end of 2015. Plug-in electric cars haven't been an easy sell for most automakers, but Tesla's been the blazing market darling. It's a good catch for Nevada. iCloud -- Loser The week kicked off with buzz over the weekend about nude celebrity snapshots leaked online. It seems as if the Apple (AAPL) iCloud accounts of stars including Jennifer Lawrence and Kate Upton were hacked, and they had taken some revealing shots that quickly spread online. Apple responded on Tuesday, claiming that iCloud's security wasn't breached: It was the passwords of individual accounts that were successfully deciphered by hackers in a targeted attack. That may exonerate Apple, but it still sets back the cloud storage movement, especially since Apple prefers to have iPhone users save any snapshots they take to iCloud. More from Rick Aristotle Munarriz
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Sunday, January 4, 2015
Week's Winners and Losers: Troubles at Home and in the Cloud
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