Filed under: Press releases, Microsoft (MSFT), Walt Disney (DIS), Sony Corp ADR (SNE)

Anyone who follows Disney (NYSE: DIS) knows that the media conglomerate is serious about videogames — it should be, considering that consoles from Nintendo (OTC: NTDOY), Sony (NYSE: SNE), and Microsoft (NASDAQ: MSFT) are currently cooking in the industry’s new cycle. The company has been increasing its investments in this area, and it will continue to do so;making games for Nintendo’s DS handheld system, as well as other platforms, has become a priority. But Disney is also serious about the synthesis of virtual worlds — you know, the kind of online gaming platforms that can suck a person’s life away due to their addictive, immersive scope.

Well, the powers that be at the Mouse have decided that a dedicated team of professionals is needed to ensure a proper presence in the virtual-world space. According to a press release, Disney has created Disney Online Studios for the express purpose of programming new online entertainment platforms. It seems that the company wants to leverage the promise of social networking — hope you’re not too sick of that buzz phrase — by creating worlds that allow gamers to interact with each other via community tools in addition to playing around in he worlds themselves. Right now, Disney operates Toontown, and it plans on developing immersive online environments for the company’s Fairies and Cars franchises. Pirates of the Caribbean has also been given the online treatment; and let’s not forget the acquisition of the popular Club Penguin destination.

Continue reading Disney’s virtual pixie dust

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Filed under: International markets, China, Commodities, Oil

China’s central bank let the yuan appreciate slightly Tuesday night to 7.1452 yuan to the dollar from 7.1580 yuan, China’s Xinhua News Agency announced Wednesday. The report also provided a hint regarding the pace of future currency appreciation.

“We will further improve monetary policy controls, continue to use quantitative measures, widen usage of price-related policy tools and increase innovation in monetary policy measures,” the central bank said in the report, without elaborating, Bloomberg News reported.

Zhou Xiaochuan, head of the People’s Bank of China, China’s central bank, has said repeatedly in recent months that the yuan rate would gradually reach a “balanced” level and help bring equilibrium to the balance of payments.

At issue: The yuan

China is facing pressure on a number of fronts to appreciate its currency. Both the United States and Europe would like China, which maintains the yuan’s rate in an artificially low trading band, to float its currency or at least let it come close to reflecting a fair-value rate in the years ahead. China keeps the yuan artificially low to reduce the cost of goods exported, which boosts exports sales. Both the U.S. and Europe say that rate gives China an unnatural competitive advantage in trade. China counters that it needs a low-valued yuan to increase wealth and protect young sectors of its developing economy.

Continue reading China strengthens yuan slightly, hints at currency policy revision

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Filed under: Products and services, Launches, Marketing and advertising

Whoever invited the Wii Fit, a virtual gym that can be used in conjunction with the gaming console, deserves a medal. Heck, he or she deserves a raise because it’s going to be a huge seller for Nintendo Co. (OTC: NTDOY).

This game is perfect for someone like me who doesn’t exercise as much as he should, which in my case means hardly ever. The Wii Fit, which will be available May 19, also will be useful for parents trying to get their children to exercise more. “Wii Fit is all about breaking the definition of video-gaming, about something that keeps you and your family fit and engaged,” said Reggie Fils-Aime, president of Nintendo’s U.S. division, in an interview with The Wall Street Journal.

Continue reading The Wii Fit will be a huge hit

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Filed under: Newsletters, Stocks to Buy

“While this has been an ugly period for equities, we believe an above-average risk/reward opportunity presently exists for the small-cap growth market,” says Jim Oberweis, Jr., monoey manager and editor of The Oberweis Report.

He adds, “P/E valuations of our universe of high growth companies are now substantially below average. Most important, our research indicates that such periods are also opportune times to buy.” Here, he offers a pair of retail ideas — Guess? (NYSE: GES) and Lululemon athletica (NASDAQ: LULU).

“While it can be difficult to seize such an opportunity in the face of overwhelming pessimism, those who unemotionally understand the math of historical valuations should reap the rewards of seeing opportunity in the current difficulty.

“In each case, uncertainty at the time led to a large market decline that resulted in stock valuations substantially below historical averages. In virtually every period in which average P/E’s for high growth stocks have dropped sharply below the mean, the economic outlook was bleak. It is exactly that pessimism and uncertainty that causes investors to relentlessly sell, creating cheap valuations.

Continue reading Small cap retail values: Guess (GES) and Lululemon (LULU)

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Filed under: Launches, Competitive strategy

One of history’s greatest investors is Peter Lynch, who managed Fidelity’s Magellan mutual fund from 1977 to 1990. For the most part, he focused on investments that he understood well, such as GE (NYSE: GE), Kemper, Starbucks (NASDAQ: SBUX) and so on.

So, what is he doing now?

Interestingly enough, he’s an investor in a dot-com startup, Jackpot Rewards, which has raised $16.7 million so far.

It’s hard to pigeonhole the company. For example, it is a for-profit entity — yet it plans to contribute 50% of its profits to charitable causes.

The site is a place for consumers to get discounts, such as from Apple (NASDAQ: AAPL), Best Buy (NYSE: BBY), Nike (NYSE: NKE) and so on. And yes, these seem like the kind of companies Lynch would invest in.

Continue reading Peter Lynch looking for a dot-com ‘ten-bagger’

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Filed under: Earnings reports, Good news, Industry, Wal-Mart (WMT), Target Corp. (TGT), Options, Technical Analysis

Target Corp. (NYSE: TGT) shares are rising this morning after low-end retailer TJX Companies (NYSE: TJX) posted an adjusted fourth-quarter profit of 64 cents a share, above analyst estimates of 63 cents a share. This news coming a day after chief rival Wal-Mart (NYSE: WMT) posted a better-than-expected fourth-quarter profit could mean good news for TGT and retail in general in the coming months. 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 TGT.

After hitting a one-year high of $70.75 in July, the stock hit a one-year low of $47.01 in January. TGT opened this morning at $51.91. So far today the stock has hit a low of $51.75 and a high of $53.18. As of 11:20, TGT is trading at $52.91, up $0.69 (1.3%). The chart for TGT looks bullish but deteriorating 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 $45 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 TGT is above $45 at March expiration. Target would have to fall by more than 14% before we would start to lose money. Learn more about this type of trade here.

Continue reading Target (TGT) rises as retail gets good news

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Filed under: Earnings reports, Analyst upgrades and downgrades, Intel (INTC), International Business Machines (IBM), Texas Instruments (TXN), Technical Analysis, Stocks to Buy

Amkor Technology (NASDAQ: AMKR) is a leading provider of semiconductor assembly and test services. The firm offers semiconductor companies and electronics manufacturers a complete set of microelectronics manufacturing services, including die bonding, wire bonding, chip encapsulation, and verification of function, current, timing, and voltage. Clients include IBM (NYSE: IBM), Intel (NASDAQ: INTC) and Texas Instruments (NYSE: TXN).

The company surprised the Street last week, when it reported Q4 EPS of 46 cents and revenues of $747 million. Analysts had been looking for 28 cents and $700 million. Management also guided Q1 EPS to 25-29 cents (23 cent consensus) and Q1 revenues to about $680-$695 million ($676.10M consensus). Lehman Brothers subsequently reiterated its overweight rating.

Continue reading Amkor Technology (AMKR): Shares forming bullish ‘pennant’ pattern

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Filed under: Earnings reports, Good news, Industry, Hewlett-Packard (HPQ), QUALCOMM Inc (QCOM), Options, Technical Analysis

QUALCOMM Inc. (NASDAQ: QCOM) shares are trading higher, regaining the losses made during yesterday afternoon’s sell-off, after tech giant Hewlett-Packard (NYSE: HPQ) posted a first-quarter profit of 86 cents per share, beating analyst estimates of 81 cents per share. The news has investors excited about the tech sector, with some analysts saying that the industry may be able to squeak by during the economic slowdown without too much collateral damage. 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 QCOM.

After hitting a one-year high of $47.72 in May, the stock hit a one-year low of $35.17 in January. QCOM opened this morning at $41.96. So far today the stock has hit a low of $41.75 and a high of $42.87. As of 11:15, QCOM is trading at $42.67, up $0.72 (1.7%). The chart for QCOM 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 an April bull-put credit spread below the $35 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 two months as long as QCOM is above $35 at April expiration. Qualcomm would have to fall by more than 17% before we would start to lose money.

Continue reading HPQ earnings give a boost to tech, Qualcomm (QCOM)

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Filed under: Bad news, Industry, Federal Natl Mtge (FNM), Options, Technical Analysis, Economic data, Housing

Fannie Mae (NYSE: FNM) stock is declining this morning on news that mortgage application volume tumbled 22.6% during the week ending February 15, according to the Mortgage Bankers Association’s weekly application survey. However, housing starts improved, which is helping to offset the sting of lower applications with the hope that future numbers will be better. 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 FNM.

After hitting a one-year high of $70.57 in August, the stock hit a one-year low of $26.38 in November. This morning, FNM opened at $28.53. So far today the stock has hit a low of $28.05 and a high of $28.99. As of 11:00, FNM is trading at $28.80, down $0.18 (-0.6%). The chart for FNM looks bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $45 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 a 4.2% return in four months as long as FNM is below $45 at June expiration. Fannie Mae would have to rise by more than 57% before we would start to lose money.

Continue reading Fannie Mae (FNM) lower as mortgage applications decline

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Filed under: Rants and raves, Market matters, Economic data, Federal Reserve

I’ve long believed that the explanations for daily market movements make no sense. If you want to know why big market players buy or sell, the media is not going to find out for you. And since you have no way of knowing who the big players are; what they’re buying and selling; and why, the best you can hope for is the daily quotes from some market analyst on a reporter’s contact list.

Thinking about those probably meaningless comments, it seems that the stock market has been moving based on three factors over the last several months: oil prices, credit market conditions, and the Fed’s actions. In theory, there are lots of possible combinations of these three, but here are three scenarios that might be worth considering:

• Rising market. What makes the market rise in the short-term? There are two things that have really driven up the market. Unexpectedly good news on the credit front — whether it’s a bank taking a lower than expected write-down or a deal to save the bond insurers. And of course, in the short-term, stocks seem to rise anytime the Fed announces a bigger-than-expected rate cut or suggests that further cuts are forthcoming.

Continue reading Why the market’s going nowhere

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