Filed under: Market matters, Options, Commodities

Alexion Pharm (NYSE: ALXN) is a product developer of anti-inflammatory therapeutics, primarily for hematological and cardiovascular discords, autoimmune diseases and cancer. ALXN is recently up $1.35 to $73.81 on unconfirmed & renewed takeover chatter. ALXN has a market cap of $2.7 billion, with long-term debt of $176 million. ALXN had June 2007 total quarterly revenue of $9.6 million. ALXN November option implied volatility of 57 is above its 26-week average of 41 according to Track Data, suggesting larger risks.

Sterlite (NYSE: SLT), a non-ferrous metals and mining company based in India, is recently up $2.47 to $22.10. SLT call option volume of 3,868 contracts compares to put volume of 521 contracts. SLT November option implied volatility of 84 is above its six-week average of 51 according to Track Data, suggesting larger risk.

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

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Filed under: Deals, Competitive strategy, Starbucks (SBUX), Media World

With the news this morning that Madonna is potentially leaving Warner Music Group (NYSE: WMG) for tour promoter Live Nation (NYSE: LYV), the future of the record industry is again being questioned. In the wake of English band Radiohead’s self-release online of its seventh album, any move away from the record industry is demanding notice. A move to a tour promoter with album and merchandise opportunities only gives artists more control over their product, as opposed to making numerous deals with separate entities.

The Wall Street Journal’s article cites that “a range of players in the music business — labels, concert promoters and even managers and ticketing companies — are eager to make broad deals that give them a larger piece of the pie by participating in revenue streams such as endorsement deals between artists and advertisers, as well as the sales of concert tickets and merchandise.” That very sentiment spells doom for the record industry as the “newer” entities that enter the album-making business make offers that are often better than the deals the record labels offer.

The possibility of Madonna moving from Warner Music is only the most recent in a long line this year of successful artists moving from the big labels, but so far the question has revolved around embracing new technologies like the digital market. Paul McCartney shook up everything back in March when he moved from the Terra Firma-held EMI to Starbucks‘ (NASDAQ: SBUX) Hear Music, seizing on a market that had primarily been used for selling compilation CDs. McCartney’s Memory Almost Full sold extremely well and catapulted him into the digital world. Radiohead’s In Rainbows is this year’s other strong case, though exact sales numbers are not available yet (however, the album’s download site did get overloaded yesterday).

But the problems that face label groups like Warner and EMI are not limited to those companies. The entire business model for the music industry is being redrawn and recreated, but not by the labels. As the cases of Madonna, McCartney, and Radiohead illustrate, the artist is taking control of an industry that has long abused its power.

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Filed under: Deals, Competitive strategy, Starbucks (SBUX), Media World

With the news this morning that Madonna is potentially leaving Warner Music Group (NYSE: WMG) for tour promoter Live Nation (NYSE: LYV), the future of the record industry is again being questioned. In the wake of English band Radiohead’s self-release online of its seventh album, any move away from the record industry is demanding notice. A move to a tour promoter with album and merchandise opportunities only gives artists more control over their product, as opposed to making numerous deals with separate entities.

The Wall Street Journal’s article cites that “a range of players in the music business — labels, concert promoters and even managers and ticketing companies — are eager to make broad deals that give them a larger piece of the pie by participating in revenue streams such as endorsement deals between artists and advertisers, as well as the sales of concert tickets and merchandise.” That very sentiment spells doom for the record industry as the “newer” entities that enter the album-making business make offers that are often better than the deals the record labels offer.

The possibility of Madonna moving from Warner Music is only the most recent in a long line this year of successful artists moving from the big labels, but so far the question has revolved around embracing new technologies like the digital market. Paul McCartney shook up everything back in March when he moved from the Terra Firma-held EMI to Starbucks‘ (NASDAQ: SBUX) Hear Music, seizing on a market that had primarily been used for selling compilation CDs. McCartney’s Memory Almost Full sold extremely well and catapulted him into the digital world. Radiohead’s In Rainbows is this year’s other strong case, though exact sales numbers are not available yet (however, the album’s download site did get overloaded yesterday).

But the problems that face label groups like Warner and EMI are not limited to those companies. The entire business model for the music industry is being redrawn and recreated, but not by the labels. As the cases of Madonna, McCartney, and Radiohead illustrate, the artist is taking control of an industry that has long abused its power.

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Filed under: Industry, Consumer experience, Technology

Samsung Electronics (LSE: SMSN) is a big name in the consumer electronics field these days. Personally, I use a Samsung cellphone, color laser printer, LCD computer monitor and more. In many cases, Samsung products have entered my home due to good pricing, stylish quality and excellent craftsmanship. Those amenities are apparently not enough to keep large profits flowing into South Korea’s largest company (by revenue).

Samsung continues to be the world’s largest seller of flat-panel screens (computer monitors and flat-panel televisions) and is a staple in the cellphone world, serving virtually every global market that exists along with almost every wireless carrier in established wireless markets. But, even with that, the company’s share price is down 10% this year, and the company is expected to report its fourth straight quarter of declining profit. What’s happened?

Margins have plummeted in many areas where it leads, such as flat-panel technology and computer components (Samsung makes more computer RAM memory than any other company). The company has been slow to create market-leading awareness in higher-margin businesses (like color laser printers), and its recent quarterly results show this. Are customers increasingly being more satisfied with Samsung’s products, thereby waiting on upgrading and considering price as the main factor when they do? Perhaps.

Consumers in emerging markets have these same concerns as well (especially price), so where are all these new high-margin product segments at, then? That’s the magic 8-ball question. I’ll say this: I’ve owned a high-end Samsung cellphone since January of this year and don’t plan on upgrading it for a long time. Why? Well, it works great and has every conceivable feature I could ever need in a cellphone. Samsung doesn’t want to hear that, though. In other words, it may be making many products so good that customers have a stagnating need to buy the latest and greatest.

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Filed under: Industry, Consumer experience, Technology

Samsung Electronics (LSE: SMSN) is a big name in the consumer electronics field these days. Personally, I use a Samsung cellphone, color laser printer, LCD computer monitor and more. In many cases, Samsung products have entered my home due to good pricing, stylish quality and excellent craftsmanship. Those amenities are apparently not enough to keep large profits flowing into South Korea’s largest company (by revenue).

Samsung continues to be the world’s largest seller of flat-panel screens (computer monitors and flat-panel televisions) and is a staple in the cellphone world, serving virtually every global market that exists along with almost every wireless carrier in established wireless markets. But, even with that, the company’s share price is down 10% this year, and the company is expected to report its fourth straight quarter of declining profit. What’s happened?

Margins have plummeted in many areas where it leads, such as flat-panel technology and computer components (Samsung makes more computer RAM memory than any other company). The company has been slow to create market-leading awareness in higher-margin businesses (like color laser printers), and its recent quarterly results show this. Are customers increasingly being more satisfied with Samsung’s products, thereby waiting on upgrading and considering price as the main factor when they do? Perhaps.

Consumers in emerging markets have these same concerns as well (especially price), so where are all these new high-margin product segments at, then? That’s the magic 8-ball question. I’ll say this: I’ve owned a high-end Samsung cellphone since January of this year and don’t plan on upgrading it for a long time. Why? Well, it works great and has every conceivable feature I could ever need in a cellphone. Samsung doesn’t want to hear that, though. In other words, it may be making many products so good that customers have a stagnating need to buy the latest and greatest.

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Filed under: Industry, Options, Commodities

AK Steel Holding Corp. (NYSE: AKS), a flat-rolled carbon, stainless and electrical steel producer, is recently up $1.39 to $50.63. The DealReporter said several steel companies are interested in AKS according to sources. AKS is expected to report EPS on October 23. AKS call option volume of 15,243 contracts compares to put volume of 2,502 contracts. AKS October 50 straddle is priced at $3.75. AKS November option implied volatility of 60 is above its 26-week average of 51 according to Track Data, suggesting larger price risks.

Mechel Steel (NYSE: MTL), a Russian mining and metals company, is recently up $6.26 to $72.23 after reporting its operational results for nine months. MTL November option implied volatility of 55 is above its 26-week average of 43 according to Track Data, suggesting larger price risk.

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

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Filed under: Industry, Options, Commodities

AK Steel Holding Corp. (NYSE: AKS), a flat-rolled carbon, stainless and electrical steel producer, is recently up $1.39 to $50.63. The DealReporter said several steel companies are interested in AKS according to sources. AKS is expected to report EPS on October 23. AKS call option volume of 15,243 contracts compares to put volume of 2,502 contracts. AKS October 50 straddle is priced at $3.75. AKS November option implied volatility of 60 is above its 26-week average of 51 according to Track Data, suggesting larger price risks.

Mechel Steel (NYSE: MTL), a Russian mining and metals company, is recently up $6.26 to $72.23 after reporting its operational results for nine months. MTL November option implied volatility of 55 is above its 26-week average of 43 according to Track Data, suggesting larger price risk.

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

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Filed under: Earnings reports, McDonald’s (MCD), Yum Brands (YUM), Burger King Hldgs (BKC), Technical Analysis, Stocks to Buy

YUM! Brands (NYSE: YUM) operates the greatest number of fast-food locations in the world, with more than 34,500 stores in over 100 countries. Its flagship chains include chicken specialist KFC, pizza server Pizza Hut, and quick-service Mexican leader Taco Bell. YUM! also operates the Long John Silver’s seafood chain, along with several hundred A&W root beer and burger stands. The company operates just over 20% of its restaurants. The rest are either franchised, or licensed locations. Burger King (NYSE: BKC) and McDonald’s (NYSE: MCD) are major competitors.

The firm surprised the Street earlier in the week when it announced Q3 EPS of 50 cents and revenues of $2.56 billion. Analysts had been expecting 45 cents and $2.46 billion. Management also raised FY07 EPS guidance from $1.63 to $1.65, versus Street consensus of $1.64. The Board authorized the repurchase of an additional $1.25 billion of common stock, boosting the total repurchase plan to $4 billion over the next two years. The stock popped on the news and has since passed into the initial stage of a bullish “flag” consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Continue reading YUM! Brands (YUM) beats estimates

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Filed under: Earnings reports, McDonald’s (MCD), Yum Brands (YUM), Burger King Hldgs (BKC), Technical Analysis, Stocks to Buy

YUM! Brands (NYSE: YUM) operates the greatest number of fast-food locations in the world, with more than 34,500 stores in over 100 countries. Its flagship chains include chicken specialist KFC, pizza server Pizza Hut, and quick-service Mexican leader Taco Bell. YUM! also operates the Long John Silver’s seafood chain, along with several hundred A&W root beer and burger stands. The company operates just over 20% of its restaurants. The rest are either franchised, or licensed locations. Burger King (NYSE: BKC) and McDonald’s (NYSE: MCD) are major competitors.

The firm surprised the Street earlier in the week when it announced Q3 EPS of 50 cents and revenues of $2.56 billion. Analysts had been expecting 45 cents and $2.46 billion. Management also raised FY07 EPS guidance from $1.63 to $1.65, versus Street consensus of $1.64. The Board authorized the repurchase of an additional $1.25 billion of common stock, boosting the total repurchase plan to $4 billion over the next two years. The stock popped on the news and has since passed into the initial stage of a bullish “flag” consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Continue reading YUM! Brands (YUM) beats estimates

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Filed under: Bad news, Dell (DELL), Employees

Dell Inc. (NASDAQ: DELL) will be laying off about 250 technical support employees at its Nashville, Tennessee customer service location as part of a broad cost restructuring movement that was announced this past May. The job cuts will be effective immediately according to the company, with affected employees being offered sales positions, with others receiving severance packages and outplacement assistance. That’s good — it’s hard to think of a technical support specialist being a good salesperson. Those two mindsets rarely co-exist in the same brain.

Dell has been busy all summer restructuring support operations to give the company a leaner cost structure. At the same time, it’s revamping much of its consumer product line to better compete with rival Hewlett-Packard Corp. (NYSE: HPQ) and entering the retail market (in what I consider to be a too hurried fashion). However, that’s not stopping Dell from having its boring PC boxes loaded up on pallets at your local Wal-Mart Stores, Inc. (NYSE: WMT) location.

Dell’s 81,000 global employees will see their ranks cut by about 10% based on what the company announced in May, so there are more cuts coming. Right now, Dell officials are not saying how far along the company is in the move to lay off over 8,000 employees globally or what the numbers are for each business unit within the computer manufacturer. The Tennessee support location has grown from about 200 employees to more than 4,000 since opening in 1999, but business needs have changed quite a bit since then.

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