Filed under: Options

CME Group(NYSE:CME) is recently trading down $45 to $440.26. CME’ s clearing member, MF Global-(NYSE- MF) , is recently down $11.10 to $6.23. The CME announced an offer of 0.323 share and $36.00 per share to acquire NYMEX(NYSE:NMX) this morning. CME March 440 straddle is priced at $41.05. CME April option implied volatility of 57 is above its 26-week average of 35 according to Track Data, suggesting larger risk.

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

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Filed under: SEC filings, Options

MF Global (NYSE: MF), a broker of exchange-listed futures and options, is recently down $10.99 to $6.50.

On Feb 28, MF recorded a bad debt provision of $141 million in response to unauthorized personal trading activity by one of the company’s registered representatives.

MF call option volume of 2,540 contracts compares to put volume of 6,148 contracts. MF April option implied volatility of 222 is above its 26-week average of 49 according to Track Data, suggesting larger price risk.

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

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Filed under: JPMorgan Chase (JPM), Bear Stearns Cos (BSC), Newcastle Investment (NCT)

Friday morning, lost in the midst of another bad day in the market, Newcastle Investment (NYSE: NCT) reported that it would be cutting its dividend to increase cash for additional liquidity and possible share buybacks. As the stock price has gone down, the trailing dividend yield continued to rise. When I bought at $12.50, the yield was about 22%. The trailing yield as of Friday’s close was 32.50% at a stock price of $8.60. Looking forward the current payout will be $0.25 per share, decreasing the yield to about 11% going forward.

The lower yield is in line with the level of distributions made before the financial crisis, but many investors since were looking to enjoy the higher yields given their now higher level of market risk. The stock lost $1.64, almost, 16% on this news and the overall negativity, caused in part by one of the Carlyle Groups investment vehicles Carlyle Capital collapsing and Bear Stearns (NYSE: BSC) news on Friday that it was remaining open but only as a ghost of its former self with the help of the Federal Reserve and JP Morgan Chase (NYSE: JPM). Of course, we all know that by Sunday afternoon it was announced that JPMorgan will be acquiring Bear Stearns for $2 share.

Continue reading Chasing Value: Newcastle Investment — questions abound

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Filed under: Good news, U.S. Steel (X), Nucor Corp (NUE), Technical Analysis, Stocks to Buy

Steel Dynamics (NASDAQ: STLD) is the fifth largest producer of carbon steel products in the United States. The firm operates five mid-western electric-furnace mini-mills, producing merchant bars, engineered bar products, wide-flange beams, rails, and flat-rolled steels. It also runs six fabrication facilities, making joists, girders, and decking for non-residential construction projects. Steel scrap is processed at 42 locations in the eastern U.S. and Canada. Nucor (NYSE: NUE) and U. S. Steel (NYSE: X) are major competitors.

The company raised its first quarter and fiscal year outlooks last week, citing higher than anticipated flat rolled steel pricing and improved scrap processing. Management predicted Q1 EPS of $1.25-$1.30, versus Street consensus of $1.18. It also expected FY08 EPS of $5.25-$5.75, versus consensus of $5.35.

Continue reading Steel Dynamics (STLD): Share price cycling in bullish ‘flag’ pattern

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Filed under: SEC filings, Options

MF Global (NYSE: MF), a broker of exchange-listed futures and options, is recently down $10.99 to $6.50.

On Feb 28, MF recorded a bad debt provision of $141 million in response to unauthorized personal trading activity by one of the company’s registered representatives.

MF call option volume of 2,540 contracts compares to put volume of 6,148 contracts. MF April option implied volatility of 222 is above its 26-week average of 49 according to Track Data, suggesting larger price risk.

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

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Filed under: Deals, Consumer experience, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Google (NASDAQ: GOOG) is hardly likely to benefit from a Microsoft (NASDAQ: MSFT) buyout of Yahoo! (NASDAQ: YHOO). Having a larger competitor with a bigger piece of the search market hardly does it any good. The “merger” of the two companies also creates that largest display ad company in the world.

But, display advertising is not a fast-growing business. Google’s search operation is, and it will continue to have , more than 60% of the market in the US.

Perhaps because its share price is down so much, Google has begun kicking about the proposed marriage. According to Reuters, Google CEO Eric Schmidt said, “We would hope that anything they did would be consistent with the openness of the Internet, but I doubt it would be.” The search company is probably trying to hint that Microsoft would “use” the new company to promote its software agenda to the detriment of consumers who simply want to use the internet for information and entertainment.

It may be a reasonable argument to get regulators to look hard at the potential deal, but Microsoft is not that stupid. It is very likely to understand that pushing its products to users and hurting access to the normal experience of getting everything from sports scores to news about Madonna won’t fly.

Google can hardly talk. It pushes its Google Apps software, its e-mail and mapping products to people who come to the site to use its search features. None of the big internet sites is “pure”. They do have to make money.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Good news, U.S. Steel (X), Nucor Corp (NUE), Technical Analysis, Stocks to Buy

Steel Dynamics (NASDAQ: STLD) is the fifth largest producer of carbon steel products in the United States. The firm operates five mid-western electric-furnace mini-mills, producing merchant bars, engineered bar products, wide-flange beams, rails, and flat-rolled steels. It also runs six fabrication facilities, making joists, girders, and decking for non-residential construction projects. Steel scrap is processed at 42 locations in the eastern U.S. and Canada. Nucor (NYSE: NUE) and U. S. Steel (NYSE: X) are major competitors.

The company raised its first quarter and fiscal year outlooks last week, citing higher than anticipated flat rolled steel pricing and improved scrap processing. Management predicted Q1 EPS of $1.25-$1.30, versus Street consensus of $1.18. It also expected FY08 EPS of $5.25-$5.75, versus consensus of $5.35.

Continue reading Steel Dynamics (STLD): Share price cycling in bullish ‘flag’ pattern

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Filed under: Market matters, Bear Stearns Cos (BSC)

Reuters reports that the bargain sale of The Bear Stearns Companies (NYSE: BSC) is making global bankers question the solvency of their “counterparties” — whichever bank, hedge fund, or other financial institution is on the other end of the phone line seeking to borrow money or conduct a trade.

Like the alphabet soup I’ve learned over the last year — Structured Investment Vehicles (SIVs), Collateralized Debt Obligations (CDOs), etc. — counterparties is a concept I think we’ll be hearing more about in the coming weeks. The basic point here is that financial markets run on trust — after all, the word credit is derived from the Latin word credere, to believe. And when trust evaporates, the financial markets freeze up.

Reuters quotes BNP Paribas strategist Edmund Shing who said, “There’s turmoil in all markets after Bear Stearns. Everyone’s asking: Who’s next? Is there a Bear Stearns in Europe? Could investment banks start to fail?” And trading volume is way down as a result: major players on the interbank market had been doing as little as 700 million pounds a day of business over the past week, a fraction of the several billions that would have been executed a year ago, and far less on Monday.

Continue reading Global banking system asks: ‘Who’s next?’

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Filed under: Deals, Consumer experience, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Google (NASDAQ: GOOG) is hardly likely to benefit from a Microsoft (NASDAQ: MSFT) buyout of Yahoo! (NASDAQ: YHOO). Having a larger competitor with a bigger piece of the search market hardly does it any good. The “merger” of the two companies also creates that largest display ad company in the world.

But, display advertising is not a fast-growing business. Google’s search operation is, and it will continue to have , more than 60% of the market in the US.

Perhaps because its share price is down so much, Google has begun kicking about the proposed marriage. According to Reuters, Google CEO Eric Schmidt said, “We would hope that anything they did would be consistent with the openness of the Internet, but I doubt it would be.” The search company is probably trying to hint that Microsoft would “use” the new company to promote its software agenda to the detriment of consumers who simply want to use the internet for information and entertainment.

It may be a reasonable argument to get regulators to look hard at the potential deal, but Microsoft is not that stupid. It is very likely to understand that pushing its products to users and hurting access to the normal experience of getting everything from sports scores to news about Madonna won’t fly.

Google can hardly talk. It pushes its Google Apps software, its e-mail and mapping products to people who come to the site to use its search features. None of the big internet sites is “pure”. They do have to make money.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Analyst reports, Analyst initiations

MOST NOTEWORTHY: Total Systems, Capital Products Partners and Ashford Hospitality were today’s noteworthy initiations:

• Stephens initiated Total Systems (NYSE: TSS) with an Overweight rating and $28 target. The firm thinks investor concerns about the negative impact of economic weakness are overdone.
• JP Morgan believes Capital Products’ (NASDAQ: CPLP) fixed-rate contract coverage and fixed operating costs should provide stable cash distributions to unit holders. The firm assumed coverage with an Overweight rating.
• Ashford Hospitality (NYSE: AHT) was initiated at UBS with a Buy rating and $7 target.

OTHER INITIATIONS:

• Bank of Kentucky (OTC: BKYF) was initiated with an Outperform rating and $29 target at Baird.
• Morgan Stanley initiated Longs Drug Stores (NYSE: LDG) with an Equal Weight rating.

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