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Consumer Stocks Rising in Mid-Day Trade; Goodyear Climbing Ahead of Preferred Stock Conversion on Tuesday

By: MT Newswires
Posted: 3/31/2014 1:15:00 PM
Referenced Stocks: GT

Top Consumer Stocks

WMT +0.79%

MCD +1.17%

DIS +1.06%

CVS +1.26%

KO +0.05%

Consumer stocks were higher Monday, with shares of consumer staples companies in the S&P 500 climbing 0.7%. Shares of consumer discretionary firms in the S&P 500 were ahead 0.8%.

In company news, shares of The Goodyear Tire & Rubber Company ( GT ) were higher Monday after the company announced a mandatory conversion of all 10 million of its 5.875% preferred stock on Tuesday.

Each preferred share will convert into 2.7574 shares of GT common stock, which was based on GT's volume-weighted average price over the past 20 trading sessions. The company also will pay a dividend of $0.7344 for each of the preferred shares just prior to the conversion.

The company issued the preferred stock three years ago Monday, priced at $50 per share, raising $500 million. The 2.7574 conversion ratio was the lowest possible price available under terms of the March 2011 deal, with the 27.5 million new shares diluting common shareholders' positions by around 11.1%, based on GT's 248 million shares currently outstanding.

GT shares were up 2.9% at $26.70 each in recent trade, just off their session high of $26.75 a share. The stock has a 52-week range of $11.83 to $28.32 a share.

In other sector news,

(+) BIG, (+2.5%) Raised to Buy from Hold with a $45 price target at KeyBanc, which said the discount retailer was beginning to gain traction with its turnaround initiatives.

(-) SWY, (-0.4%) Ends "go-shop" period, saying none of the other parties that previously expressed an interest are now interested in pursuing a deal. Grocery chain will now move forward with the $7.64 bln buyout offer led by Cerberus Capital.