Brent Archer
Virginia, US - http://www.investorsobserver.com
Brent Archer is an options analyst and writer at Investors Observer.
Collective Brands (PSS) jumps 25% on Q3 earnings
Collective Brands (NYSE: PSS - option chain) shares have moved higher today after the company, which includes Payless Shoe Source and Stride Rite reported a third-quarter profit of $47.5 million, or 75 cents per share, on revenue of $862.7 million. PSS's adjusted profit of 42 cents per share met analysts' estimates of 42 cents per share on revenue of $840.7 million. In this environment, merely meeting estimates warrants a 20+% jump in stock price. It seems that PSS is keeping up its profits the same way discounters like Family Dollar (NYSE: FDO) have by taking advantage of cost-conscious consumers. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on PSS.PSS opened this morning at $7.76. So far today the stock has hit a low of $7.68 and a high of $9.70. As of 12:00, PSS is trading at $9.11, up $1.85 (25.5%). The chart for neutral and S&P gives PSS a 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $5 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just three and a half months as long as PSS is above $5 at March expiration. Collective would have to fall by more than 45% before we would start to lose money. Learn more about this type of trade here.
PSS hasn't been below $5 at all except for one day in the past year and has shown support around $6.50 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in PSS or FDO.
Constellation Energy (CEG) gets sweeter offer from French
Constellation Energy Group (NYSE: CEG - option chain) shares have moved higher today after French power company EDF offered a $6.5 billion bid for half of CEG's nuclear business and other assets. The offer challenges an earlier bid from MidAmerican, a unit of Berkshire Hathaway (NYSE: BRK.A).
If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CEG.
CEG opened this morning at $30.00. So far today the stock has hit a low of $27.37 and a high of $30.17. As of 12:35, CEG is trading at $28.04, up $2.89 (11.5%). The chart for CEG looks neutral and S&P gives CEG a neutral 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $22.50 range.
Continue reading Constellation Energy (CEG) gets sweeter offer from French
Sears Holdings (SHLD) soars despite weak earnings
Sears Holdings (NASDAQ: SHLD - option chain) shares have jumped higher today even after the company announced a Q3 loss that included slowing sales and falling margins. Earnings and revenues fell, but an extension of the company' s buyback plan is boosting the shares today, along with a positive outlook for the company's holiday layaway promotion. It might just be that investors expected even worse results from the beleaguered retailer. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on SHLD.
SHLD opened this morning at $33.98. So far today the stock has hit a low of $31.55 and a high of $38.47. As of 12:20, SHLD is trading at $36.67, up $4.83 (15.2%). The chart for SHLD looks bearish and S&P gives SHLD a negative 2 STARS (out of 5) sell ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $22.50 range.
Continue reading Sears Holdings (SHLD) soars despite weak earnings
Johnson & Johnson (JNJ) buying Mentor (MNT) a good sign
Johnson & Johnson (NYSE: JNJ - option chain) shares are lower today after the medical giant announced it would acquire breast implant company Mentor (NYSE: MNT). JNJ put the price for MNT at $31 per share, more than 90% above Friday's price of $16. This kind of buyout activity could signal a couple things. First JNJ is in pretty good financial shape and second that many stocks are undervalued and that resilient companies like JNJ might be looking into making moves in the coming months. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JNJ.JNJ opened this morning at $57.66. So far today the stock has hit a low of $56.45 and a high of $57.82. As of 12:40, JNJ is trading at $56.49, down $2.09 (3.6%). The chart for JNJ looks bullish and S&P gives JNJ its highest 5 STARS (out of 5) strong buy ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just three weeks as long as JNJ is above $50 at December expiration. Johnson & Johnson would have to fall by more than 11% before we would start to lose money. Learn more about this type of trade here.
JNJ hasn't been below $52 at all in the past year and has shown support around $56 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MNT. He does control a bullish hedged position in JNJ.
Tiffany & Co. (TIF) drops on lower forecast
Tiffany & Co (NYSE: TIF - option chain) shares are falling today after the company forecast 2008 EPS in a range between $2.30 and $2.50, below analysts' estimates of $2.58. TIF blamed weak consumer spending for the forecast. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TIF.This morning, TGT opened at $18.66. So far today the stock has hit a low of $18.61 and a high of $21.50. As of 12:35, TIF is trading at $20.45, down $0.38 (-1.8%). The chart for TIF looks neutral and S&P gives TIF a 3 STARS (out of 5) hold ranking.
For a bearish hedged play on this stock, I would consider a February bear-call credit spread above the $30 range.
Continue reading Tiffany & Co. (TIF) drops on lower forecast
InterDigital (IDCC) resolves Samsung patent dispute
InterDigital (NASDAQ: IDCC - option chain) shares opened higher today after the company announced it has resolved its patent dispute with Samsung Electronics Co. Under the agreement, IDCC has granted Samsung a license that covers 3G wireless handsets through 2012. The license allows IDCC to collect royalties from Samsung. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on IDCC.IDCC opened this morning at $28.10. So far today the stock has hit a low of $25.35 and a high of $28.98. As of 12:35, IDCC is trading at $28.98, up 0.29 (1.1%). The chart for IDCC looks neutral.
For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $15 range.
Continue reading InterDigital (IDCC) resolves Samsung patent dispute
Genentech (DNA) buoyed by Avastin study results
Genentech (NYSE: DNA - option chain) shares have moved higher today after the company and its partner Roche announced its breast-cancer drug Avastin improved the survival time for patients in a late-stage study. The results bring DNA one step closer to full regulatory approval from the FDA. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on DNA.DNA opened this morning at $76.40. So far today the stock has hit a low of $74.86 and a high of $79.16. As of 12:40, DNA is trading at $77.09, up $4.35 (6.0%). The chart for DNA looks bullish and S&P gives DNA a positive 4 STARS (out of 5) buy ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $65 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just four weeks as long as DNA is above $65 at December expiration. Genentech would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.
DNA hasn't been below $65 at all in the past year and has shown support around $69 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in DNA.
Bristol-Myers Squibb (BMY) cancer drug rejected
Bristol-Myers Squibb (NYSE: BMY - option chain) shares are falling today after the European Medicines Agency said it has rejected a request by BMY to market its breast cancer drug Ixempra. The agency said the increase in survival rates using the drug was not significant enough to warrant approval. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BMY.This morning, BMY opened at $18.92. So far today the stock has hit a low of $18.12 and a high of $19.30. As of 12:15, BMY is trading at $18.60, down $0.68 (3.5%). The chart for BMY looks bullish and S&P gives BMY a positive 4 STARS (out of 5) buy ranking.
For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $22.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in four weeks as long as BMY is below $22.50 at December expiration. Bristol-Myers would have to rise by more than 21% before we would start to lose money. Learn more about this type of trade here.
TGT hasn't been above $45 since early September and shown resistance around $21.50 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY.
Northrop-Grumman (NOC) rises on defense spending speculation
Northrop Grumman (NYSE: NOC - option chain) shares have moved higher today after with other large defense contractors after President Bush and Defense Secretary Gates recommended that President-elect Obama increase overall defense spending for at least the next five years. This comes just one day after NOC CEO Ron Sugar said that he expects steady spending for at least the next two years. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NOC.NOC opened this morning at $36.80. So far today the stock has hit a low of $35.24 and a high of $38.05. As of 12:35, NOC is trading at $37.70, up 90 cents (2.4%). The chart for NOC looks bullish and S&P gives NOC a positive 4 STARS (out of 5) buy ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just one month as long as NOC is above $30 at December expiration. NOC would have to fall by more than 20% before we would start to lose money.
NOC hasn't been below $35 at all in the past year and has shown support around $35.25 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in NOC.
Teva Pharmaceuticals (TEVA) asthma drug approved
Teva Pharmaceuticals (NASDAQ: TEVA - option chain) shares have moved higher today after the Food & Drug Administration approved the company's generic version Pulmicort, an asthma drug made by competitor AstraZeneca (NYSE: AZN). If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on TEVA.TEVA opened this morning at $43.00. So far today the stock has hit a low of $42.55 and a high of $43.78. As of 12:25, TEVA is trading at $42.84, up $0.65 (1.5%). The chart for TEVA looks bullish and S&P gives TEVA a positive 5 STARS (out of 5) strong buy ranking.
For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $35 range.
Continue reading Teva Pharmaceuticals (TEVA) asthma drug approved
Medtronic (MDT) sunk by earnings miss, lower outlook
Medtronic (NYSE: MDT - option chain) shares are way lower today after the company posted a second-quarter profit of $571 million, or 51 cents per share. The company's adjusted profit of 67 cents per share missed analysts' estimates of 71 cents per share. MDT also lowered their fiscal-2009 EPS forecast by about 3% on both the high and low ends. None of this is helping the stock today. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on MDT.This morning, MDT opened at $34.49. So far today the stock has hit a low of $31.25 and a high of $35.48. As of 12:30, MDT is trading at $32.24, down $4.18 (11.5%). The chart for MDT looks neutral and S&P gives MDT a 3 STARS (out of 5) hold ranking.
For a bearish hedged play on this stock, I would consider a January bear-call credit spread above the $42.50 range.
Continue reading Medtronic (MDT) sunk by earnings miss, lower outlook
Eaton (ETN) boosted by Berkshire Hathaway
Eaton (NYSE: ETN - option chain) shares have soared higher today after Berkshire Hathaway (NYSE: BRK.A) disclosed in an SEC filing Friday afternoon that it has bought 2.91 million shares of ETN over the past six months. Usuall,y when announcements like this are made, investors follow the Oracle of Omaha and send the stock higher. If you think the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ETN.ETN opened this morning at $42.30. So far today the stock has hit a low of $41.48 and a high of $43.35. As of 12:25, ETN is trading at $43.49, up $2.34 (5.7%). The chart for ETN looks neutral and S&P gives ETN a neutral 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just five weeks as long as ETN is above $30 at December expiration. Eaton would have to fall by more than 30% before we would start to lose money.
ETN hasn't been below $37 at all in the past year and has shown support around $39 recently.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ETN or Berkshire.
Citigroup CEO Vikram Pandit buying C stock
Citigroup Inc. (NYSE: C) shares are lower today, dragged down by the overall market. However, it has been reported that CEO Vikram Pandit and another big shot at C have recently purchased a combined one million shares of the bank's stock. These guys may just be making a big show of confidence, but it is still roughly $9M on the line in these transactions. If you think that insider buying means the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on C.C opened this morning at $9.76. So far today the stock has hit a low of $8.79 and a high of $10.11. As of 1:55, C is trading at $9.19, down 0.26 (-2.8%). The chart for C looks bearish and S&P gives C a neutral 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $5 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 10.1% return in just five weeks as long as C is above $5 at December expiration. Citi would have to fall by more than 45% before we would start to lose money. Learn more about this type of trade here.
C hasn't been below $8 at all in the past year and has shown support around $8.25 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in C.
Nokia (NOK) cuts full-year industry outlook by 1.5%
Nokia (NYSE: NOK - option chain) shares are falling today after the company warned that the global mobile phone market will weaken in 2009. NOK forecast global handset sales of 1.24 billion phones in 2009, down from a previous estimate of 1.26 billion. The entire industry is taking a hit today from this announcement including competitors like Research in Motion (NASDAQ: RIMM) and Motorola (NYSE: MOT) as well as suppliers such as Qualcomm (NASDAQ: QCOM). If you think this Nokia won't be rising too far in the coming months of economic headwinds, then it could be a good time to look at a bearish hedged play on NOK.This morning, NOK opened at $12.43. So far today the stock has hit a low of $12.22 and a high of $12.97. As of 12:40, NOK is trading at $12.57, down $1.58 (11.2%). The chart for NOK looks neutral and S&P gives NOK a 3 STARS (out of 5) hold ranking.
For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $15 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in five weeks as long as NOK is below $15 at December expiration. Nokia would have to rise by more than 19% before we would start to lose money. Learn more about this type of trade here.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in NOK, RIMM, MOT, or QCOM.
Wyeth's (WYE) PREMARIN gets FDA approval
Wyeth (NYSE: WYE - option chain) shares have moved higher today after the FDA approved the usage of the company's PREMARIN to treat moderate to severe postmenopausal dyspareunia, which is just a clinical way of saying painful sexual intercourse. Helping treat that sounds like a good thing to me. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on WYE.WYE opened this morning at $32.68. So far today the stock has hit a low of $32.68 and a high of $34.29. As of 12:45, WYE is trading at $33.70, up $1.26 (3.9%). The chart for WYE looks neutral and S&P gives WYE a 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $27.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just five weeks as long as WYE is above $27.50 at December expiration. Wyeth would have to fall by more than 18% before we would start to lose money. Learn more about this type of trade here.
WYE hasn't been below $28 at all in the past year and has shown support around $30 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in WYE.
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