Filed under: Options

AtheroGenics (NASDAQ: AGIX) September options active at higher prices into Data. AGIX closed up 41 cents to $2.49. AGIX focuses on the discovery, development and commercialization of novel drugs for the treatment of chronic inflammatory diseases. AGIX announced on 8/29/07 new scientific data of its oral antidiabetic agent AGI-1067 will be presented at the European Society of Cardiology Congress on 9/5/07 in Vienna, Austria. AGIX call option volume of 18,320 contracts compares to put volume of 13,171 contracts. AGIX at the money September 2.5 straddle is priced at 90 cents according to Track Data, suggesting larger price moment.

Volatility Index S&P 500 Options (OPR: VIX) up 1.25 to 25.06.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Filed under: After the bell, Deals, Good news, Rants and raves, Home Depot (HD), Headline news, DJIA

For the past few days I have been writing about the fickle nature of our current stock market, which has been bouncing up and down, reversing direction each day. All this meandering about indicates that investors lack conviction, or at least traders lack conviction. Investors are probably doing nothing, or picking up the odd bargain here and there.

Today that bargain must have been The Home Depot (NYSE: HD) because that was the No.1 performing stock among the Dow Jones Industrial Average ($INDU). It was up 1.34% on a day when 5 out of 6 Dow components were down. It went up $0.49 to close at $37.04 in a market when everyone is sitting on the edge of their seat waiting to see what the Fed will do? Bernanke’s Fed: Maybe they will and maybe they won’t was my closer yesterday.

Continue reading The Home Depot (HD) top performing Dow stock

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Filed under: Earnings reports, Bad news, Competitive strategy

Bookseller Borders Group Inc. (NYSE: BGP) continues to bleed money even with the release of the latest Harry Potter volume. If anything, the losses, already substantial, are getting bigger. Despite the fact that consolidated sales as reported in 2Q 2007 results were up 10% to $945 million, the company still posted a net loss of $25 million, or $0.43 per share, a 25% bigger loss than Wall Street had anticipated. Things have gotten so bad that CEO George Jones remarked he was encouraged by flat sales at Waldenbooks. For the last 7 quarters, Waldenbooks’ same-store sales have fallen.

Borders stores posted a total sales increase of 9.7%. Excluding Harry Potter, organic sales growth — a misleading term in this instance — was less than half of 1%. This is an expensive business model that is not working. In an effort to lure customers into stores, Harry Potter was sold at a large discount to match prices at discount chains. Administrative expenses increased a bit, but debt increased by almost $200 million, to $663 million. No wonder Borders is now negotiating to amend its credit agreement with its banks and considering the possibility of selling its Borders International segment, which still somehow posted a $10 million operating loss even while total sales increased 31% to $170 million.

Waldenbooks is in an even worse situation. Total sales declined 7.7% and operating losses were the same as one year ago, meaning the chain has made made no improvements to its bottom line situation. BGP shares began the year trading at $22.46, reached a high of $23.41 in late May and have been tanking ever since, closing at $14.66 on Thursday, down $0.28.

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Filed under: International markets, Products and services, Conventions and conferences, Caterpillar (CAT), Archer-Daniels-Midland (ADM), Deere and Co (DE), Agriculture

Spurred by demand for ethanol, U.S. farmers have planted more corn than ever before: 92.9 million acres. The bumper corn crop was front and center at this year’s Farm Progress Show in Decatur, Illinois, which shows off the latest in farming trends and technologies to an increasingly global audience.

Despite recent protests in France over its genetically modified crops, St. Louis based Monsanto Company (NYSE: MON) not only featured new drought- and pest-resistant corn and soy products to international dealers, but also hoped to shop for the best characteristics of foreign crops from those dealers.

Deere & Company (NYSE: DE) took the opportunity to showcase its biggest roll-out of new products — from tractors to cotton pickers — in years. They also featured their recent expansion into international markets, including western Europe, South America, and China. Incidentally, Deere has just announced a stock split and increased dividend.

U.S. Agriculture Secretary Mike Johanns attended the show and took the opportunity to urge Congress to restore the 2007 Farm Bill to more closely resemble the White House version. He also urged Congress to ratify pending free trade agreements with Panama, Peru, and South Korea.

Decatur-based Archer Daniels Midland Company (NYSE: ADM), which recently announced an organizational restructuring, and Peoria-based Caterpillar Inc. (NYSE: CAT), which has its own expansion plans in China, were also represented at the show.

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Filed under: Kimberly-Clark (KMB), Options

Chesapeake Energy Corporation (NYSE: CHK) implied volatility up on gas price movement and expected fund raising.

CHK is the largest independent and third largest overall producer of natural gas in the U.S. Bloomberg reports Natural Gas Futures are up .88% to 5.63. CHK has a market cap of $15 billion with long-term debt of $8.3 billion. CHK announced on 8/8/07 a $500 million issuance of convertible senior notes (convertible debts increases volatility). CHK filed to sell EUR $525 million in senior notes on 11/27/06. CHK filed to sell $792 million in senior notes on 12/1/06. CHK filed to sell 30 million shares in a secondary on 12/7/06. CHK October option implied volatility of 33 was above its 26-week average of 28 according to Track Data, suggesting larger price risk.

Kimberly-Clark Corporation (NYSE: KMB) implied volatility flat; KMB has low debt to equity ratio.

1.3 billion people, nearly a quarter of the world’s population, use KMB brands every day. KMB is recently down 98 cents to $68.42. KMB has a market cap of $29 billion with long term debt of $3 billion. KMB reported 2006 revenue of $16.7 billion. KMB has been frequently mentioned as an LBO candidate in 2006. KMB option implied volatility of 18 was near its 26-week average according to Track Data, suggesting non-directional risks.

Daily options update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Filed under: Rants and raves, Employees, Workspace

Given my position as a long-time denizen of the dot-com world, with dozens of contacts in new media and venture capital and all of the numbered Webs (1.0, 2.0 and maybe even 3.0), I’m quite frequently invited to things. Some are valuable networking tools, like LinkedIn; others are fun and a bit useful for keeping track of my virtual colleagues, like Twitter. Still others, like AIM, are vital for day-to-day working life.

And then there are the sites where my so-called “friends” hang out. It seems quite ironic that many of the former colleagues and distant contacts who invite me to “keep up with what he and your other friends are doing” were never what I would categorize as “friends.” Vexing rivals? Quixotic bosses? Difficult customers? Unhappy underlings? Probably more like it. While I understand that social networking sites like Facebook.com and StumbleUpon and, to a lesser extent, MySpace and del.icio.us and the rest of them, are the rage right now — and are used by many legitimate corporate types for actual work purposes — well, I’m highly uncomfortable with the rampant use of the word “friend.”

Let’s face it: even if I’m pleased because Brian in Legal delivered that contract to me quickly, he’s not actually my “buddy”; nor is the receptionist you just hired ready to be asked to join your “circle of friends.” Plenty of people with whom I could happily carry on pre-conference-call banter, while I’m sure they’re quite lovely, just aren’t friends. Flickr gives us a break and lets us designate lots of “contacts,” while Twitter has recently changed its nomenclature to count those you are following, and those that follow you. This makes sense to me! This is not presumptuous or uncomfortable.

Just because my name is in your contact list, Mr. and Ms. New Media Executive, it does not mean that you are my friend.

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Filed under: Industry, Law, Competitive strategy, Mexico, Politics

As early as this weekend, Labor Day weekend, the Bush administration could open the U.S. roadways to Mexican trucks. The Teamsters Union and three public-interest groups: The Sierra Club, Public Citizen and Environmental Law Foundation, asked a federal court yesterday for an emergency injunction to prohibit Mexican trucks on the roads.

The union has fought for 13 years to stop Mexican trucks from entering into the U.S., a promise given by Bill Clinton under the North American Free Trade Agreement, or NAFTA. They argue that the introduction of these trucks would compromise highway safety and cost U.S. jobs.

Hector Marquez, head of the Mexican Economic Ministry’s Trade and NAFTA Office, disagrees. “It’s very unfortunate because certainly the governments of Mexico and the United States have put forth a tremendous effort to put in place all the requirements, all the mechanisms, all the personnel and the resources to make this work and to guarantee the security and safety,” the Houston Chronicle reported today. The Transportation Department’s Federal Motor Carrier Safety Administration dismissed the suit as “without merit.”

Rolando Ortega, a delegate from the National Confederation of Mexican Carriers, doesn’t believe Mexican truckers want to travel into the United States.

Continue reading Politicians want the border open, not truck drivers

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Filed under: Earnings reports, Good news, Bargain stocks

With a name like Rock of Ages Corporation (NASDAQ: ROAC), you know the company must be a tombstone and memorial marker maker. Correct. But the company also supplies granite for products unrelated to memorial purposes, such as countertops, landscape and/or sidewalk designs, and various types of plaques and awards. The company operates its own quarry in New England, and has spent the last year restructuring itself back towards profitability. A combination of cost control measure plus enhanced productivity initiatives seems to be helping Rock of Ages carve a niche for itself in the granite products industry. In recent 2Q 2007 earnings, CEO Kurt Swenson stated the company will return to profitability for 2007 as a whole. If the recent quarter is any indication, Swenson is correct. Rock of Ages narrowed its losses by 60% in the first half of 2007. The company posted revenues of $3.9 million in 2Q 2007, very welcome news from the $307,000 net loss posted in 2Q 2006.

Profit margins are up and the company’s retail backlog is up by almost $1 million, meaning it has more work coming in that it can handle immediately. Gross profit increased almost 20% for the quarter, with all three business segments - quarry operations, manufacturing (products) and retail sales (memorials) - posting double digit profit margins. Winter weather stayed late this spring, so the company lost some ground due to inability to fully utilize quarry operations. But the introduction of more efficient equipment means the company can make up some of that loss. Administrative expenses declined and the company did not incur any additional restructuring charges this quarter. Income from continuing operations was a healthy $0.53 per diluted share, a vast improvement over a $0.04 diluted share loss one year ago. The stock currently trades at just under $6 per share. Every portfolio needs a few oddball investments. This one qualifies as that.

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Filed under: Market matters, Rich in America, Personal finance

Slogging through the tricky market of 2001, when Silicon Valley was imploding and stock investors were no longer printing their own profits, our pitch-perfect fictional investor still managed to keep things solidly in the black. The top performer of the year ended up being NVIDIA (NASDAQ: NVDA), manufacturer of graphics processors for use in video cards, computers, and other technology. The stock went public at the end of the previous millennium, in late January 1999.
The $836,704 in play after the Laboratory Corp. (NYSE: LH) trade was rolled over into NVDA, acquiring 101,418 shares at an entry price of $8.25 on the first trading day of the year. (Note: Clearly as this exercise continues, were it a real-life trading environment, liquidity concerns could come into play. For the sake of this game, we’ll ignore it.). The stock embarked upon a nice rally through early June, stalled throughout the summer and early fall, and took off again at the beginning of November for a strong final two months of the year.

By the time the ball dropped on New Year’s Eve, NVIDIA was worth $33.45, a 305% advance. After five immensely profitable years, our portfolio had grown to $3,392,432.

Next: Step 6: MEMC Electronic Materials (WFR), 2002

Beth Gaston Moon is an analyst at Schaeffer’s Investment Research.

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Filed under: Launches, Industry, Competitive strategy, Marketing and advertising, Anheuser-Busch Cos (BUD)

In an effort to fight back against shifting consumer trends to spirits and wine, the Wall Street Journal reported that Coors Brewing Co. (NYSE: TAP) has created a new subsidiary to “introduce above-premium beers to the marketplace,” according to an email sent to beer wholesalers last week.

The move comes at a time when the American beer business is facing considerable headwinds, including slower growth due to upscale “craft” beers and a strong push for market share by imports. Anheuser-Busch Cos. (NYSE: BUD), the largest American beer maker, and SABMiller PLC’s (NYSE: SAB) Miller Brewing Co., the second-largest, have already introduced new beverages to combat these headwinds.

Continue reading Molson Coors (TAP) to brew new high-end beer

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