Five Stocks to Watch in October

The U.S. stock market saw its worst performance since January last month. September is typically a difficult month for the stock market, with the S&P 500 dropping -1.5 percent, while the tech heavy Nasdaq composite index declined -1.9 percent. Even the bellwether Dow Jones Industrial Average closed down slightly in September, declining -0.3 percent for the month overall.

The decline in stocks last month is in part due to expectations that the Federal Reserve may begin tightening after the tentative end of QE stimulus measures in October. The month of October is a month that is traditionally ominous for stock investors, with some of the market's biggest historical declines made in October. This month's Five Stocks to Watch include two takeover plays, Allergan and Family Dollar Stores, two recent IPOs, GoPro and Alibaba and Tesla Motors.

Allergan Inc. (AGN) – Allergan has been trying to stave off a hostile bid from Valeant Pharmaceuticals (VRX) allied with Bill Ackman's Pershing Square Capital. Last month, Allergan attempted to take over Salix Pharmaceuticals SLPX in order to make itself too large a takeover target, nevertheless, the attempted takeover of Salix has recently stalled after Allergan tried to buy Salix without using stock, which would have required shareholder approval. Consequently, the $53 billion hostile bid by Valeant and Pershing Square is still in effect.

Family Dollar Stores Inc. (FDO) – Last Wednesday, Dollar General (DGN) extended its bid for Family Dollar Stores for more than three weeks in its tender offer for the company at $80 per share. Nevertheless, Family Dollar remains committed to the $74.50 per share bid by Dollar Tree (DLTR). Family Dollar Stores has yet to call a special shareholder meeting to determine whether its shareholders will approve or reject the $8.5 billion deal with Dollar Tree.

Tesla Motors Inc. (TSLA) – A mysterious Twitter post by Elon Musk drove up Tesla stock almost five percent on Thursday. The Tweet was “About time to unveil a D and something else”, and referred to an unveiling at the Paris Motor Show on October 8th. The Internet was buzzing over speculation on what the statement meant, with people expecting a new model vehicle or improved features for the company's expected software upgrade.

GoPro Inc. (GPRO) – After reaching a high of $96.45 per share, GoPro stock has fallen to $85.46 where it closed on Thursday — a long way from its original $24 per share IPO price in January — the stock recently fell more than 12 percent after the company donated 5.8 million of its shares to charity. Nevertheless, prospects for the company remain high, with demand for its products soaring this holiday season. GoPro stock has almost quadrupled since its initial public offering.

Alibaba Group Holdings LLC (BABA) – After offering shares at $68 per share in its initial public offering last month, the Chinese Internet giant's stock has soared making a high of $99.70 per share since its IPO. Alibaba stock is currently trading at $88.00 per share, nevertheless, some analyst question whether the stock can hold its recent gains. October promises to be a very interesting month.

Published on Oct 3, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

Posted in ...