Porch and Disney Rallies Lead CE 100 Index 0.8% Higher

Short week. Slight gains. But gains nonetheless.

The CE 100 Index was 0.8% higher through a trading week cut short by the Thanksgiving holiday.

The Live pillar was the best-performing pillar, up 4.6% on the week. Porch was the standout here, gathering 25% on the heels of news that the company’s CEO planned to purchase up to $5 million worth of shares.

The news came via SEC filing last week, and dovetails with an announcement earlier in the month that management would purchases up to $15 million of the company’s stock.

Generally speaking, insider buying can be interpreted by the Street that management has strong confidence in a company’s future prospects and that the stock is undervalued. Porch shares are down 87% year to date.

Disney Heralds Iger’s Return

Disney’s 7.6% gain through the week trailed a bit, but represented the second strongest showing of the CE 100 pantheon.

The stock rode a wave of enthusiasm upon the announcement that Robert Iger is returning as Disney’s CEO. But as we noted last week, the continued challenges at the company’s streaming media division will be front and center as consumers are pulling back on subscriptions in general. Streaming media has been the one segment showing positive gains in subscription spending, but Disney is seeing continued competition here from the likes of Amazon and Apple.

Disney’s streaming division continues to lose money. In the latest quarter, the division lost $1.5 billion in the third quarter, up from $630 million in losses in last year’s 3Q. The direct-to-consumer (D2C) revenues for the quarter increased 8% to $4.9 billion, lagging the 20% increase in Disney+ paid subscribers in the United States and Canada.

In commentary earlier this month alongside earnings, CEO Bob Chapek said Disney is targeting profitability for the streaming segment in 2024. As had been reported earlier in the month, the company is cutting costs, laying off staff in addition to freezing new hires.

FIS Eyes Cost Cuts

Cost-cutting efforts have also been in sight at other companies, and announcements that firms are increasing their scrutiny on margins have cheered investors. FIS gathered 7.4%, as the financial services technology provider will look to cut “several thousand” staffers and contractors from a workforce that numbered about 65,000 at the end of last year. The company is reportedly seeking to cut costs by about $500 million over the next several quarters.

Zoom sank 7.6%. The company reported earnings early in the week that showed slowing growth, where revenue in the latest quarter was up 5% year on year, down from the second quarter, which showed 8% growth. Management has noted there is “heightened deal scrutiny for new business,” as described by CEO Eric Yuan during the earnings conference call.

MongoDB lost 7.6%, as Morgan Stanley cut its rating on the stock from “overweight” to “equal weight,” and lowered the price target to $215 from $368. As noted by sites including The Motley Fool, Morgan Stanley analysts see long term potential in the name, but short-term economic headwinds.