Craig Johnson, Roulston Research's Community Chair, Sees Walmart Growth in International Markets

Finisar: Adding to Position

Our Boston presenter has been adding to his position in Finisar (NASDAQ: FNSR, $8.07). The stock has dropped about 10% since the presentation in early October, but the presenter believes that shorting that commenced after a 1-for-8reverse split back in September is likely over. The company has been working through capacity constraints. FNSR increased output for its ROADM-related products in each of the recent quarters. Reports from other industry players point to improvements in long-haul and metro market demand. The presenter's current target is $12.

ERTS: Still a Buy Despite Weak Quarter

Our NY presenter is still positive on Electronic Arts' prospects (NASDAQ: ERTS, $18.29). The stock dropped 6% yesterday, following the release of fiscal Q2 results. The presenter stresses that the weak guidance the company offered was not entirely unexpected. He believes the stock will start gaining after one last month of negative NPD data for the videogame industry. Agressive job cuts just announced by the company is a positive development.

Cinemark: Positioned for 3-D Transition

Cinemark (NYSE: CNK, $12.43) is up about 10% since the name was presented at our NY small cap idea forum back in early October. The company's Q3 results topped the Street's estimates.
The presenter also highlights CNK's outperformance versus peers. The key near-term catalyst is the closing of the funding arrangements to facilitate a quiker roll-out of 3-D screens across the country.

Retailers take a conservative approach to the upcoming holiday season

Retailers have taken a much more conservative approach to the upcoming holiday season as they have in recent years. Sellers have up to 30% less merchandise stocked for the upcoming months. As a result, many are predicting that we will not see big 50%, 60% or 70% sales like we have in previous years.

Despite economic conditions, Craig Johnson, Roulston Research's Consumer community chair believes the recent pick-up in monthly sales, coupled with consumers that have "frugal fatigue", could make it hard for many to resist opening up their wallets this holiday season. If this happens, it could bring a run on some merchandise in the coming weeks.

If some retailers are caught with product shortfalls, Johnson believes that they may introduce spring merchandise in December to fill empty shelves. Johnson points out that this is not a new phenomenon. He has heard rumors that some teen-focused retailers may bring in spring products by mid-December.

Johnson also believes that E-readers, whether it's Kindle or Barnes & Noble's Nook e-reader that's coming out later this year, are going to be big sellers this season.

Valassis: Good Q3 Keeps Story Intact

Our Dallas presenter says there's been no change to his thesis for Valassis (NYSE: VCI, $18.33). The company's numbers in Q3 were above the Street's expectations. Full year EBITDA guidance was raised by $20 million. In July, a Michigan judge ruled in the company's favor in its litigation against News America. Two more lawsuits against News remain pending. NWS has asked the judge in the state case for a retrial this Friday. The decision was put off, but according to the presenter's legal advisors, NWS's arguments are not likely to be sufficient. The stock has made a 15% move since the recommendation in late September, but much more significant gains are possible over the long-term.

Warehouse clubs report the best October retail sales

Despite the stock market rally, retail sales last month were good for warehouse clubs and some high-end sellers, but not as good for much of the rest of the sector. Retailers are now concerned that consumers may not really open their wallets for the 2009 holiday shopping period, which officially starts the day after Thanksgiving.

Typically the November-December gift-buying months is the most critical annual sales period for sellers. It can account for 50% or more of retailers' sales and profits for the year.

Craig Johnson, our Consumer community Chair believes that for well over a year, consumers have been in shellshock. he thinks that "they are now starting to come out of the bunker, but they still are wearing their body armor and shopping smartly".

He believes that better-than-expected sales results from some high-end sellers shows more people are becoming comfortable spending a little bit more money again. He believes this trend bodes well for the holiday season.

Johnson expects holiday sales to grow about 2.4%.