Archive for February 1st, 2008
Filed under: Products and services, Marketing and advertising, Stocks to Buy
The choppy/consolidating (or perhaps worse) market conditions sometimes gives the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Omniture.
Omniture (Nasdaq: OMTR) is a leading provider of online business optimization services, which customers use to manage/enhance online, offline and multi-channel business initiatives.
Analysts really like the company’s primary product: SiteCatalyst, which helps clients electronically measure web site traffic, visitor activity, advertising effectiveness, and e-commerce transactions. Analysts also are impressed by Omniture’s Fortune 1000-level clientele.
The company offers several additional tools, including a product designed to enable customers to access all of their data in real time. The Reuters F2007/F2008 EPS consensus estimates for Omniture are 20 cents/42 cents.
The risks? Analysts are keeping an eye on the company’s order backlog for any signs of a slowdown in business.
The First Call mean rating for Omniture is: Buy. [22 firms.] Mean 2008 target: $35.00. [high: $44, low: $26.]
Stock Analysis: Omniture is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from Omniture’s shares. Sell / Stop Loss if you were to purchase shares in this company: $16.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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Filed under: Major movement, Newsletters, Technical Analysis, S and P 500, DJIA
“This rally has further to go,” says trading expert Mark Lebivot. In VR Trader, which analyzes volume reversal patterns, he notes, “It is finally starting to feel like the bulls are serious.”
Leibovit, who is consistently ranked among the top newsletter advisors according to Timer Digest, explains, “Recent buying was broad based as volume increased breadth was strong. Investor sentiment as measured by the AAII poll Wednesday evening January 23 was at 59.02 bearish, a very extreme number.
“Since the poll began in 1987 the bearish percentage only exceeded 55% three previous times. Each time was near significant market lows. The VIX also was at high levels seen at correction lows in stock prices!
“The financial media is pointing out fairly frequently that the market is off to its worst start since 1991. They make it sound like that has ominous implications. That bad start in 1991 actually presented an exceptional buying opportunity.
Continue reading Top trader issues ‘buy’
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Filed under: Analyst initiations
.gif) MOST NOTEWORTHY: InfoSpace, Parexel and Idearc Inc were today’s noteworthy initiations:
- B. Riley believes InfoSpace (NASDAQ: INSP) is now positioned to further leverage the growing online search market following divestitures. The firm started shares with a Buy rating and $13 target.
- Oppenheimer assumed coverage of Parexel (NASDAQ: PRXL) with an Outperform rating and $70 target, as they believe the company is well-positioned to benefit from positive CRO industry trends and sees room for continued growth.
- Wachovia initiated Idearc (NYSE: IAR) with an Underperform rating, citing the challenging industry and cyclical pressures.
OTHER INITIATIONS:
- Morgan Keegan initiated GMX Resources (NASDAQ: GMXR) with an Outperform rating.
- Goldman assumed coverage of Cigna (NYSE: CI) with a Buy rating.
- Merrill started PharMerica (NYSE: PMC) with a Neutral rating.
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Filed under: Major movement, Earnings reports, Good news, MasterCard Inc’A’ (MA), Options, Technical Analysis
 Mastercard Inc (NYSE: MA) shares are rising this morning as the company reported a fourth-quarter profit of $304.2 million, or $2.26 a share, yesterday after market close. Even excluding a one-time profit from selling a portion of its investment in Brazil’s Redecard SA, MA made 89 cents a share in the quarter, handily beating analyst estimates of 73 cents a share. If you think that the company 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 MA.
After hitting a one-year low of $98.61 last February, the stock hit a one-year high of $227.18 in December. MA opened this morning at $210.67. So far today the stock has hit a low of $209.66 and a high of $217.35. As of 11:10, MA is trading at $213.30, up $6.30 (3.0%). The chart for MA looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $170 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 seven weeks as long as MA is above $170 at March expiration. Mastercard would have to fall by more than 20% before we would start to lose money. Learn more about this type of trade here.
MA hasn’t been below $170 since October and has shown support around $185 recently. This trade could be risky if the economy has not yet bottomed, but even if that happens, this position could be protected by the support the stock might find around $175, where MA bounced earlier this month.
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 MA.
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Filed under: Pfizer (PFE), Stocks to Buy
It looks like Pfizer is once again on the road to success.
Pfizer (NYSE: PFE) is the world’s largest research-based pharmaceutical company.
Analysts say that despite approximately flat 2008 revenue, margins should improve slightly, aided by PFE’s restructuring/efficiency improvements designed to net $2 billion in savings by the end of 2008.
Analysts also like the growth forecasts for drugs Celebrex and Geodon, and also see more substantial revenue contributions from Lyrica, Sutent, and Chantix. Meanwhile, Lipitor, PFE’s largest selling drug, has patent protection through 2010.
Analysts also like Pfizer’s blue-chip customer list, which includes: McKesson (NYSE: MCK), Cardinal Health (NYSE: CAH) and AmerisourceBergen (NYSE: ABC). The Reuters F2008/F2009 EPS consensus estimates for PFE are $2.39/$2.54.
The risks? Analysts have an eye on Pfizer’s pipeline development, an important component, given upcoming expiration losses, as well the company’s roll-out timetable.
The First Call mean rating for PFE is: Hold. [24 firms.] Mean 2008 target: $28.00. [high: $33, low: $35.]
Stock Analysis: Pfizer is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 3 years should be rewarded from PFE’s shares. Sell/Stop Loss if you were to purchase shares in this company: $13.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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Filed under: Analyst upgrades and downgrades, Bad news, Morgan Stanley (MS), Lowe’s Cos (LOW)
MOST NOTEWORTHY: Morgan Stanley, AstraZeneca and Lowe’s were today’s noteworthy downgrades:
- Goldman Sachs downgraded shares of Morgan Stanley (NYSE: MS) to Neutral from Buy as it believes declines in capital markets and commercial real estate, coupled with additional investment writedowns, will impact near-term earnings.
- AstraZeneca (NYSE: AZN) was lowered to Neutral from Overweight at HSBC. The firm expects further negative pressure on shares with the 30-month stay on an FDA approval of generic versions of low dose Seroquel set to expire in April 2008.
- Citigroup downgraded Lowe’s Companies (NYSE: LOW) to Hold from Buy as it believes a Q4 miss and 2008 guidance will likely pressure shares in the near-term.
OTHER DOWNGRADES:
- Friedman Billings downgraded TiVo (NASDAQ: TIVO) to Underperform from Market Perform.
- Merriman downgraded Mentor Corp (NYSE: MNT) to Neutral from Buy.
- Goldman removed ProLogis (NYSE: PLD) from its Conviction Buy List.
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Filed under: Analyst upgrades and downgrades, Good news
MOST NOTEWORTHY: Disney, GlaxoSmithKline and Owens Illinois were today’s noteworthy upgrades:
- Oppenheimer upgraded shares of Disney (NYSE: DIS) to Outperform from Perform ahead of the company’s Q1 results, as they expect in the quarter and find the valuation attractive at current levels.
- GlaxoSmithKline (ASE: GSK) was raised to Neutral from Underweight at HSBC on valuation as they believe the dividend yield provides support.
- Owens Illinois (NYSE: OI) was upgraded to Buy from Hold at Deutsche Bank following the Q4 upside, as they believe the company is gaining traction with its pricing initiatives.
OTHER UPGRADES:
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Filed under: Major movement, Good news, Motorola (MOT), Nokia Corp. (NOK), Options, Technical Analysis
 Motorola Inc. (NYSE: MOT) shares are surging this morning after the company said it is considering divesting itself of its mobile phone division, its biggest unit. The decision came as MOT was struggling to gain market share from better-performing rivals Nokia (NYSE: NOK) and Samsung. Citigroup also upgraded the stock to “Buy” from “Hold” on the news. If you think that the company 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 MOT.
After hitting a one-year high of $19.98 last February, the stock hit a one-year low of $9.43 last week. MOT opened this morning at $12.90. So far today the stock has hit a low of $12.54 and a high of $12.97. As of 11:00, MOT is trading at $12.67, up $1.17 (10.2%). The chart for MOT looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $11 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 6.4% return in just seven weeks as long as MOT is above $11 at March expiration. Motorola would have to fall by more than 13% before we would start to lose money.
MOT hasn’t been below $11 except for a few days in the past year and has shown support around $11.20 recently. This trade could be risky if the poor economic news continues, but even if that happens, this position could be protected by the support the stock might find around $11.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in MOT or NOK.
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Filed under: Personal finance, Stocks to Buy
With all eyes this weekend on whether the New England Patriots can go undefeated for the whole season and beat the New York Giants in the Super Bowl, here are two stocks that should move up nicely so that you can go to Disney World on the profits.
Ing Groep (NYSE: ING) is certainly best of breed. The bank is very well run, and has not had to write off too much for subprime. It is currently trading with a dividend yield of 5.2% and has a tiny PEG of 0.77. This is a stock that Tom Brady can take to the bank.
Host Hotels and Resorts (NYSE: HST), formerly Host Marriott, the largest hotel real estate investment trust (REIT) in the US, owns some 120 luxury and upscale hotels in North America. Most of its hotels operate under the Marriott and Ritz-Carlton brands and are managed by sister firm Marriott International. Other brands include Four Seasons and Hyatt. It is currently trading with a 4.9% dividend yield and very close to the 52-week low. As the economy starts exiting the slow growth mode, it should do well.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no positions in any stock mentioned as of 2/1/08.
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Filed under: Earnings reports, Exxon Mobil (XOM), Options, Technical Analysis, Oil, Stocks to Buy
 Exxon Mobil Corp. (NYSE: XOM) opened higher but has fallen so far this morning after the oil company posted a fourth quarter profit of $11.7 billion, or $2.13 a share, beating analyst estimates of $1.95 a share. XOM also posted a fiscal-2007 profit of $40.6 billion, the largest ever for an American company. However, falling crude oil futures are dragging XOM lower as US unemployment figures indicate a still-slowing economy. If you think that the company 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 XOM.
After hitting a one-year low of $69.02 in March, the stock hit a one-year high of $95.27 in October. XOM opened this morning at $87.70. So far today the stock has hit a low of $85.05 and a high of $87.86. As of 10:50, XOM is trading at $86.06, down $0.34 (-0.4%). The chart for XOM looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $75 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 6.4% return in just seven weeks as long as XOM is above $75 at March expiration. Exxon Mobil would have to fall by more than 12% before we would start to lose money.
Continue reading Exxon Mobil (XOM) slips despite record earnings
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