It's fun to be courted by two suitors. Rental-car firm DollarThrifty (NYSE: DTG) is back in play just days after Hertz (NYSE: HTZ) agreed to acquire the firm. Not so fast, says Avis Budget (NYSE: CAR), which hopes to top Hertz’s bid. Dollar Thrifty is no belle of the ball, and is really more of an also-ran. But each of the bigger rivals simply wants to keep DTG from falling into the hands of its rival. Shares of DollarThrifty are up another +6% to $50, as Avis has promised a bid that is “substantially higher” than Hertz’s $41 a share offer. Avis’ executives are upset that DollarThrifty previously rebuffed Avis’ buyout overtures. But DollarThifty’s Board has a responsbility to give Avis a fair hearing. If Avis comes up with a counter-offer, can a counter-counter-offer from Hertz be far behind?
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Companies remain stubbornly slow to rebuild their depleted workforces. But they are starting to make deeper investments in payroll management -- a potentially bullish sign for eventual hiring. That’s the view from Administaff (NYSE: ASF), which just posted surprisingly robust first-quarter results. That’s quite a turnaround from last quarter, when rising health care costs yielded an unexpected quarterly loss. With today’s +17% gain, shares have continued a nice rebound that has generated a +50% return since mid-February. But investors should note that this isn’t a high-growth company, and the stock is unlikely to garner a price-to-earnings (P/E) multiple much beyond the 20 to 25 times projected 2011 earnings that it currently garners.
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As we saw last week, positive news regarding a clinical trial for a new drug can have a dramatic effect on a stock price. Raptor Pharma (Nasdaq: RPTR) is today’s biotech hero, as its stage 2 trial to treat patients with liver disease yielded positive results. But the trading action highlights an important lesson for most investors: Unless you are right near a computer when positive news hits the wires, you're better off waiting for the dust to settle before investing in a high-flying stock. Raptor’s shares spiked from $2.54 to $3.88 in a matter of minutes – good for a +53% gain. Shares soon gave up much of those gains as day-traders, only in it for a quick thrill, moved onto the next hot trade. By being patient, you can buy shares of Raptor for closer to $3 than the nearly $4 shares fetched mid-morning.
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