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InvestorPlace
Back in January, I suggested that investors consider taking a bite out of MicroStrategy (NASDAQ: MSTR ), an analytical software company. Since then, the stock has risen about 53%. But MicroStrategy’s first-quarter earnings, announced last week, were disappointing. Is it time to get out of the stock or get in? Last September, I wrote that big technology companies, such as IBM (NYSE: IBM ) were flush with cash that they intended to use for acquisitions . IBM, in particular, is very interested in analytical software, a topic about which I posted in April, and the company expects to generate $16 billion in revenue from selling analytical software by 2015 . One way for IBM to achieve that goal is to acquire analytical software companies — such as MicroStrategy. Of course, MicroStrategy might not be acquired, so it’s important to consider how the company is performing on its own. And on the basis of its first-quarter earnings, investors might have reason to pause. Although its revenue was up 31% , its earnings per share of 10 cents a share badly missed the Thomson Reuters consensus estimate of 39 cents a share. The numbers suggest that MicroStrategy’s expenses might be getting out of control. After all, its net income of $1.1 million was 84% below last year’s level on a 37% increase in operating expenses to $87.8 million. Moreover, its cost of revenue is up as well — most notably a 58% spike in support costs to $28.5 million. When MicroStrategy announced earnings, its stock sold off, but it’s up 4.6% since then. Does this mean it has further to run? To make that decision, you might consider using the price-to-earnings-to-growth (PEG) ratio that compares a stock's market valuation to its forecasted earnings growth. By that measure, if a stock trades at a PEG of 1.0 or lower, it is reasonably priced. Higher than that, and it looks overvalued. Based on a PEG of 1.06 — it trades at a P/E of 41.8 and its earnings are expected to rise 39.5% to $4.44 in 2012 — I’d say the stock is reasonably valued. The bad news is that its first-quarter earnings miss was huge and its expenses appear to be growing too fast. The good news is that its cash balance grew 17% to $203 million in the first quarter despite the profit plunge. If IBM bought MicroStrategy, it would get an analytical software company with $483 million in sales and a long list of blue chip clients. For that, IBM would need to pay a premium over MicroStrategy’s $1.46 billion market capitalization — a price IBM could afford to pay. Investing in MicroStrategy is not without risks, but I think its upside outweighs them. Peter Cohan has no financial interest in the securities mentioned.
Thursday, May 12, 2011
Can MicroStrategy Shares Stay on a Tear?
Could $20 Google Laptop Save PCs from iPad Craze?
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InvestorPlace
The leaders of the PC market are looking to mend their injured market. Apple Inc. (NASDAQ: AAPL ) and its iPad have hurt the PC market considerably, with research firm Gartner originally had predicted a 3% growth for personal computer sales in the first quarter, but recently calculated that PC sales declined more than 1% . But computer makers may be striking back — led by Google Inc. (NASDAQ: GOOG ) and a dirt-cheap laptop. Forbes’ Quentin Hardy reported on Tuesday that Google is going to announce a new laptop PC that runs on the company’s new Chrome operating system. The laptop and online services will be included in a “student package” that runs just $20 per month. This PC, targeted at young consumers, will be followed by a similar package for professionals. As Hardy points out, Google already offers Google Apps—a suite of office tools for word processing, calendars and other services like Microsoft (NASDAQ: MSFT ) Office—for $50 per year, a service package that could easily be amended with the cheap Chrome laptop. An unnamed Google executive, Hardy’s source, said, “Small and medium-sized businesses are banging on our doors to get something like this.” There are many efforts making waves right now in the fight against the surging Apple iPad. Hewlett-Packard (NYSE: HPQ ) is taking a multi-tiered approach, by simultaneously developing its own tablet as an alternative to the iPad (not a great idea) as well as a new line of service-oriented notebook PCs (good idea.) Dell is bulking up its business services, positioning both its PCs and tablets as extensions of those services rather than the core of tits operation. But Google Inc. (NASDAQ: GOOG ) and it’s bargain basement deal may be the best hope conventional computers have amid the tablet craze. If Google’s PC proves as functional as it is affordable, the device should take off with students, businesses and all consumers. Affordability will prove to be the key for the long-term PC market. One of the reasons the iPad is proving so successful is its perfectly positioned price. At $499 for the cheapest model, the iPad represents cutting edge technology at just below luxury item price points. This is why Hewlett-Packard’s new notebook PCs are such a gamble for revitalizing that segment—at $799 and $1099, the ProBook and EliteBook notebooks will struggle to find an audience. Older style desk- and laptops, while cheaper than either those new notebooks or the iPad, are less appealing to the average buyer simply because they seem outdated. An ultra-cheap, simple laptop from Google meanwhile is a very appealing proposition—at $20 a month, it would seem almost disposable, a replaceable utility rather than a fragile piece of high-end technology. Investors can expect Dell (NASDAQ: DELL ), Acer, and the rest of the PC markets leaders—even Apple—to follow in Google’s footsteps if reports of Google’s cheap laptop prove true. As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
Apple Weekly Options Draw Interest
meant a mixed market for much of the day. Jobless claims declined by 44,000 to
434,000 in the week ended May 7, while the Producer Price Index showed a .8
percent up tick in April, and Retail Sales rose .5 percent during that time.
Stocks climbed out of a hole in afternoon action and the major averages are
posting slim gains heading in the closing bell. The Dow Jones Industrial Average
is up 60 points and the NASDAQ added 16.75. CBOE Volatility Index (CBOE: VIX )
slipped .72 to 16.23. Trading in the options market is active, with 9 million
calls and 7.3 puts having changed hands so far. Bullish Flow For the fourth
consecutive quarter, Cisco (NASDAQ: CSCO ) earnings have resulted in a gap down
on its stock chart. Although the company reported earnings that beat Street
views, the lowered guidance sent the stock skidding and shares are down 77 cents
to $17 late-Thursday. Options are seeing heavy trading. 393,000 calls and
237,000 puts traded in Cisco so far. Action is brisk in the at-the-money May 17
puts and calls. May 18 calls and 16 puts are actively traded. Noteworthy volume
is being seen in the CSCO January 20 Calls as well. The contract is $3, or 17.6%
out-of-the-money, and more than 55,000 traded. The top trade is a
20,000-contract block bought at 50 cents each. So, while the stock is down, some
investors might see the decline as an opportunity to initiate bullish positions
in the Jan calls. Prior to today, Cisco shares were finally climbing out of a
bearish funk, moving up 7.6% from the 52-week low of $16.52 set on April 19.
Valeant Pharmaceuticals (NYSE: VRX ), which rallied around earnings news Monday,
is off 91 cents to $50.89 and the VRX Jul 35 Jan 60 Call Spread is apparently
sold at $12.20, 12,000 times. This might exit a position in July 35 calls opened
on December 6, when 20,000 contracts traded at $1.05. The stock has rallied more
than 80% since that time and 12,000 are being closed out at $16.50. A new
bullish position opened in the out-of-the-money VRX Jan 60 Calls at $4.30. Find
more option analysis and trading ideas at Options Trading Strategies . Bearish
Flow Apple (NASDAQ: AAPL ) loses $1.41 to $345.82 and the weekly options in
AAPL, which expire on Friday the 13th, are seeing interest today. AAPL May
Weekly 340 Puts , which are 1.7% out-of-the-money and have a delta of -.13, are
the most actives. More than 9,000 traded. Open interest is 8,355 and the
contract is bid at 31 cents. Some investors were possibly speculating on
weakness in AAPL this morning after Cisco shares suffered a 4.9% post-earnings
decline and Apple shares made a run towards $342. However, AAPL May Weekly 345
Calls are seeing interest as well, with volume approaching 9,000 contracts and
open interest of 3,804. Weekly 350 calls and 345 puts are seeing brisk trading
too. The top trade of the day in Apple options today is in the July puts and
calls after the 300 365 bullish risk-reversal was apparently bought at $3.69,
700 times. Meanwhile, implied volatility in AAPL is up 2.5% to 21, but near the
lower end of its 52-week range of 20 and 52. Implied Volatility Mover Goldman
Sachs (NYSE: GS ) options are seeing brisk trading today after Rochdale analyst
Dick Bove lowered his rating on the stock to Sell and said that the Justice
Department is facing increasing pressure to launch a criminal lawsuit against
the investment bank, according to a report by Bloomberg. Shares are down 3.7% to
$142.35. Options volume is 59,000 calls and 83,000 puts, and three times the
average daily. GS May 140 Puts , which are now 1.7% OTM, are the most actives
with 11,630 traded. GS May Weekly 140 Puts are the second most actives.
Meanwhile, IV has increased by 17% to 25. Options Flow Bearish activity detected
in BHP Billiton (NYSE: BHP ), with 17,529 puts trading, or two times the recent
average daily put volume. Bullish flow detected in Avon Products (NYSE: AVP ),
with 13,415 calls trading, or three times the recent average daily call volume.
Bullish flow detected in Mead Johnson Nutrition (NYSE: MJN ), with 5279 calls
trading, or four times the recent average daily call volume. Increasing volume
is also being seen in VALE (NYSE: VALE ), SINA Corp. (NASDAQ: SINA ), and Akamai
(NASDAQ: AKAM ). Frederic Ruffy is the Senior Options Strategist at
Whatstrading.com , a site dedicated to helping traders make sense of the complex
and fragmented nature of listed options trading.
Apple Weekly Options Draw Interest
tdp2664
InvestorPlace
Your daily option s trading wrap up. Sentiment A bunch of mixed data indicators meant a mixed market for much of the day. Jobless claims declined by 44,000 to 434,000 in the week ended May 7, while the Producer Price Index showed a .8 percent up tick in April, and Retail Sales rose .5 percent during that time. Stocks climbed out of a hole in afternoon action and the major averages are posting slim gains heading in the closing bell. The Dow Jones Industrial Average is up 60 points and the NASDAQ added 16.75. CBOE Volatility Index (CBOE: VIX ) slipped .72 to 16.23. Trading in the options market is active, with 9 million calls and 7.3 puts having changed hands so far. Bullish Flow For the fourth consecutive quarter, Cisco (NASDAQ: CSCO ) earnings have resulted in a gap down on its stock chart. Although the company reported earnings that beat Street views, the lowered guidance sent the stock skidding and shares are down 77 cents to $17 late-Thursday. Options are seeing heavy trading. 393,000 calls and 237,000 puts traded in Cisco so far. Action is brisk in the at-the-money May 17 puts and calls. May 18 calls and 16 puts are actively traded. Noteworthy volume is being seen in the CSCO January 20 Calls as well. The contract is $3, or 17.6% out-of-the-money, and more than 55,000 traded. The top trade is a 20,000-contract block bought at 50 cents each. So, while the stock is down, some investors might see the decline as an opportunity to initiate bullish positions in the Jan calls. Prior to today, Cisco shares were finally climbing out of a bearish funk, moving up 7.6% from the 52-week low of $16.52 set on April 19. Valeant Pharmaceuticals (NYSE: VRX ), which rallied around earnings news Monday, is off 91 cents to $50.89 and the VRX Jul 35 — Jan 60 Call Spread is apparently sold at $12.20, 12,000 times. This might exit a position in July 35 calls opened on December 6, when 20,000 contracts traded at $1.05. The stock has rallied more than 80% since that time and 12,000 are being closed out at $16.50. A new bullish position opened in the out-of-the-money VRX Jan 60 Calls at $4.30. Find more option analysis and trading ideas at Options Trading Strategies . Bearish Flow Apple (NASDAQ: AAPL ) loses $1.41 to $345.82 and the weekly options in AAPL, which expire on Friday the 13th, are seeing interest today. AAPL May Weekly 340 Puts , which are 1.7% out-of-the-money and have a delta of -.13, are the most actives. More than 9,000 traded. Open interest is 8,355 and the contract is bid at 31 cents. Some investors were possibly speculating on weakness in AAPL this morning after Cisco shares suffered a 4.9% post-earnings decline and Apple shares made a run towards $342. However, AAPL May Weekly 345 Calls are seeing interest as well, with volume approaching 9,000 contracts and open interest of 3,804. Weekly 350 calls and 345 puts are seeing brisk trading too. The top trade of the day in Apple options today is in the July puts and calls after the 300 — 365 bullish risk-reversal was apparently bought at $3.69, 700 times. Meanwhile, implied volatility in AAPL is up 2.5% to 21, but near the lower end of its 52-week range of 20 and 52. Implied Volatility Mover Goldman Sachs (NYSE: GS ) options are seeing brisk trading today after Rochdale analyst Dick Bove lowered his rating on the stock to Sell and said that the Justice Department is facing increasing pressure to launch a criminal lawsuit against the investment bank, according to a report by Bloomberg. Shares are down 3.7% to $142.35. Options volume is 59,000 calls and 83,000 puts, and three times the average daily. GS May 140 Puts , which are now 1.7% OTM, are the most actives with 11,630 traded. GS May Weekly 140 Puts are the second most actives. Meanwhile, IV has increased by 17% to 25. Options Flow Bearish activity detected in BHP Billiton (NYSE: BHP ), with 17,529 puts trading, or two times the recent average daily put volume. Bullish flow detected in Avon Products (NYSE: AVP ), with 13,415 calls trading, or three times the recent average daily call volume. Bullish flow detected in Mead Johnson Nutrition (NYSE: MJN ), with 5279 calls trading, or four times the recent average daily call volume. Increasing volume is also being seen in VALE (NYSE: VALE ), SINA Corp. (NASDAQ: SINA ), and Akamai (NASDAQ: AKAM ). Frederic Ruffy is the Senior Options Strategist at Whatstrading.com , a site dedicated to helping traders make sense of the complex and fragmented nature of listed options trading.
IBM (NYSE:IBM) Smartcloud Going Down Under
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IBM (NYSE:IBM) has decided to launch Smartcloud in Australia. IBM (NYSE:IBM) Smartcloud Going Down Under IBM (NYSE:IBM) has decided to launch an enterprise-grade version of its cloud computing service in Australia. The new service is set to start by the year end. IBM engineer Michael Shallcross said, "There might be an opportunity for a shared instance in Australia if there is a large enough base of customers to use it. Our expectation is that it will almost certainly happen. I am reasonably confident the demand will be there." IBM (NYSE:IBM) shares are currently standing at 169.5. Price History Last Price: 169.5 52 Week Low / High: 120.61 / 173.54 50 Day Moving Average: 163.57 6 Month Price Change %: 14.8% 12 Month Price Change %: 32.2%
Starbucks Corporation (NASDAQ:SBUX) To Expand In Europe
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Starbucks Corporation (NASDAQ:SBUX) has introduced premium iced coffee in Finland. Starbucks Corporation (NASDAQ:SBUX) To Expand In Europe Starbucks Corporation (NASDAQ:SBUX) and Arla Foods have announced the national launch of Starbucks premium ready-to-drink iced coffees in Finland. Rich DePencier, the vice president of global consumer products at Starbucks Corporation (NASDAQ:SBUX) Coffee International said that, "We recognize the opportunity to transform the ready-to-drink coffee market in Finland based on the success we've had with consumers in North America, Asia, Europe and most recently Denmark. The availability of Starbucks ready-to-drink beverages demonstrates our commitment to innovating and enhancing the coffee experience for our customers wherever they may be." Starbucks Corporation (NASDAQ:SBUX) shares were at 35.79 at the end of the last day’s trading. There’s been a 12.8% movement in the stock price over the past 3 months. Starbucks Corporation (NASDAQ:SBUX) Analyst Advice Consensus Opinion: Moderate Buy Mean recommendation: 1.93 (1=Strong Buy, 5=Strong Sell) 3 Months Ago: 2 Zack’s Rank: 12 out of 44 in the industry
Today’s stock market close; dow jones industrial average; s&p 500, Nasdaq investing news; dollar up; money invest notes
dow2664
Stock index composites fell lower yesterday as earnings report data was less than anticipated and negative trends in the oil and commodity sector pulled back composite value close results. The Dow Jones Industrial Average fell back over 130 points during yesterday's session. Stock index composites had some work to do to recover this day from the lower trending observed during the last open trading session in the U.S. Stock index futures were falling off prior to opening bell this morning however and pointed to the lower open today. At the halfway point in today's trading session, the major stock market index composites were mixed with the Dow Jones Industrial Average and S&P 500 posting numbers in the red. The Dow Jones was off by over 20 points at this point in the session. Major news applying negative pressure today was the commodity sell-off. Labor department statistics revealed the initial jobless claims dropped lower by 44,000 to 434,000 for the week ending May 7th. The dollar gained strength today and additional negative pressure afflicted gold and silver. The Commerce Department reported that business inventories were up but April retail sales were lighter than expected. As the trading session approached close, the major market index composites had rallied higher. The S&P 500 was green by 6.47 points at 1349 at this point. The Nasdaq was higher by almost 17 points at 2862 at this point. The Dow Jones Industrial Average was green by over 67 points at 12,697.20 as close approached. Stock Market trends during the latter half of today’s trading session followed commodities higher. Author: Frank Matto
Top 10 Fastest-Growing Specialty Finance Stocks: IX, NEWS, CISG, MRLN, IFT, FRF, TGH, AER, RRR, BRO (May 12, 2011)
before 4:30 AM ET, based on the average long-term earnings growth rate estimated
by Wall Street analysts. One Chinese company (CISG) is on the list. ORIX
Corporation (ADR) (NYSE:IX) is the 1st fastest-growing stock in this segment of
the market. Its long-term annual EPS growth is expected to be 34.2%. This number
is based on the average estimate of 1 brokerage analysts. NewStar Financial,
Inc. (NASDAQ:NEWS) is the 2nd fastest-growing stock in this segment of the
market. Its long-term annual EPS growth is expected to be 25.0%. This number is
based on the average estimate of 1 brokerage analysts. CNinsure Inc. (ADR)
(NASDAQ:CISG) is the 3rd fastest-growing stock in this segment of the market.
Its long-term annual EPS growth is expected to be 23.0%. This number is based on
the average estimate of 3 brokerage analysts. Marlin Business Services Corp.
(NASDAQ:MRLN) is the 4th fastest-growing stock in this segment of the market.
Its long-term annual EPS growth is expected to be 17.0%. This number is based on
the average estimate of 1 brokerage analysts. Imperial Holdings Inc (ADR)
(NYSE:IFT) is the 5th fastest-growing stock in this segment of the market. Its
long-term annual EPS growth is expected to be 15.0%. This number is based on the
average estimate of 1 brokerage analysts. Fortegra Financial Corp (NYSE:FRF) is
the 6th fastest-growing stock in this segment of the market. Its long-term
annual EPS growth is expected to be 12.5%. This number is based on the average
estimate of 4 brokerage analysts. Textainer Group Holdings Limited (NYSE:TGH) is
the 7th fastest-growing stock in this segment of the market. Its long-term
annual EPS growth is expected to be 12.0%. This number is based on the average
estimate of 4 brokerage analysts. AerCap Holdings N.V. (NYSE:AER) is the 8th
fastest-growing stock in this segment of the market. Its long-term annual EPS
growth is expected to be 12.0%. This number is based on the average estimate of
1 brokerage analysts. RSC Holdings Inc. (NYSE:RRR) is the 9th fastest-growing
stock in this segment of the market. Its long-term annual EPS growth is expected
to be 12.0%. This number is based on the average estimate of 1 brokerage
analysts. Brown & Brown, Inc. (NYSE:BRO) is the 10th fastest-growing stock in
this segment of the market. Its long-term annual EPS growth is expected to be
11.6%. This number is based on the average estimate of 5 brokerage analysts.
Randgold Resources' CEO Discusses Q1 2011 Results – Earnings Call Transcript
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gol2664 Negocioenlinea Randgold Resources' CEO Discusses Q1 2011 Results – Earnings Call Transcript TheStreet.com – 4 hours ago By Seeking Alpha 05/12/11 – 11:01 AM EDT Good morning ladies and gentlemen, or good afternoon, sorry. A very warm welcome again to our qualify presentation. It's always a pleasure to come here and …
Daily News and Research on Chinese Stocks (May 12, 2011)
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tdp2664 China Analyst Below is today's Daily News and Research on U.S.-Listed Chinese Stocks : APWR MY : Wind Energy in China: 10 Stocks You Need to Know – at Seeking Alpha (Thu 8:21AM EDT) BIDU DANG RENN SINA SOHU : Analysts Still Love Sina – Indie Research (Thu 10:50AM EDT) BIDU SNDA : Baidu Files Appeal Against China Ruling in Favor of Shanda – at Bloomberg (Thu 9:13AM EDT) BIDU VIT YOKU : Asian Century Quest Capital's Extraordinary Stock Picks – at Seeking Alpha (Thu 10:42AM EDT) CELM DEER NIV ONP RINO.PK : RPT-SPECIAL REPORT-China stock scams are the latest U.S. import – at Reuters (Thu 9:46AM EDT) CHC NTES : 4 Oversold BRIC Stocks With High Profitability – at Seeking Alpha (Thu 8:19AM EDT) CHLN : China Housing Announces Earnings Date for First Quarter 2011 Financial Results – PR Newswire (Thu 8:30AM EDT) CNR : InPlay: China Metro-Rural clarifies market confusion on results announcement; says they are only required by the SEC to file Form 20-F to publish annual results and semi-annual results in accordance with NYSE Amex Rules – Briefing.com (Thu 8:34AM EDT) CNR : CNR Clarifies Market Confusion – Marketwire (Thu 8:32AM EDT) CPHI : New Star Analyst Rankings for China Pharma Holdings, Inc. Com – StarMine (Thu 9:28AM EDT) CTC : UPDATE 1-Canadian Tire profit rises with retail sales – at Reuters (Thu 8:54AM EDT) CTFO GAME GSI STP YGE : 5 Dirt Cheap China Stocks – at Seeking Alpha (Thu 9:28AM EDT) CTRP : [video] 3 Stocks I Saw on TV, May 12 – at TheStreet.com (Thu 8:10AM EDT) HNP : 4 High-Yield Emerging-Market Stocks – at TheStreet.com (Thu 9:56AM EDT) LDK : JBS, Lebanon, Serbia May Sell Debt: Emerging-Markets Bond Alert – at Bloomberg (Thu 9:52AM EDT) MR : Ford Motor – Upgrades & Downgrades – at TheStreet.com (Thu 10:20AM EDT) NTE : [$$] Kahn Brothers Shows Its Hand – at TheStreet.com (Thu 9:15AM EDT) QKLS : QKL Stores Inc. Announces Reporting Date for First Quarter 2011 Financial Results – PR Newswire (Thu 8:30AM EDT) QKLS : Kohls Corporation Earnings: Net Income Rises – Wall St. Cheat Sheet (Thu 8:15AM EDT) SINA : New Star Analyst Rankings for Sina Corporation – StarMine (Thu 9:27AM EDT) SSRX : 3sbio Inc Earnings Call scheduled for 8:00 am ET today – CCBN (Thu 8:00AM EDT) TSTC : Insiders Trading TSTC, SLE, COV, CCI – at TheStreet.com (Thu 9:54AM EDT) WWIN : New Star Analyst Rankings for Winner Medical Group Inc. – StarMine (Thu 9:28AM EDT) XIN : Xinyuan Real Estate Co Ltd Earnings Call scheduled for 8:30 am ET today – CCBN (Thu 8:30AM EDT) YGE : Yingli Green Energy Holding Co Ltd Earnings Call scheduled for Fri, May 20 – CCBN (Thu 8:15AM EDT)
Takeover Talk Hits OfficeMax, Juniper Options
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tdp2664 InvestorPlace Your intraday option s trading update. The market is generally quiet with major indicators up somewhat. Traders watching the price of crude which has been little changed from yesterday's sell off around $98. Retail sales data from the Commerce Department this morning showed a modest .5% increase, smallest since last July. "That suggests that commodity inflation, including the rise in gas prices, has impacted the buying habits of U.S. consumers," said Joseph Cusick, SVP and options analyst with OptionsXpress in Chicago. However lackluster the rise, it still went up and that indicates the economy is improving, says Cusick. His sense is oil will continue in the $90 to $100 range. In options markets Cusick is watching intriguing activity in several stocks that have been subject to takeover and/or merger rumors. OfficeMax (NYSE: OMX ), a long-time takeover rumor stock, is seeing large purchases of Aug 10 and 12 Calls, along with Jun 10 Calls. OMX is at 9.52 putting these nearly at or out of the money. Total option volume is about 11,000 calls versus 1400 puts, says Cusick, so market in OMX has a bullish cast today. Juniper Networks (NYSE: JNPR ) is rising as it has been taking business from the struggling Cisco (NASDAQ: CSCO ) plus there are rumors swirling of possible deal or merger or something between JNPR and Oracle (NASDAQ: ORCL ), says Cusick. Take any rumor with a grain of salt but the options trading this morning shows 39,000 calls versus 4500 puts, typically a bullish sign. The JNPR May 40 Calls, which expire next week, see volume of 10,465 contracts. High Options Volume by Strike The SPDR S&P 500 (NYSE: SPY ) dominates busy strikes with its SPY MayWk2 135 call trading up .12 to .45 on volume of 67,000 options. The Wk2 May 134 Puts trade about same number, down .21 to .24. Cisco continues to get option interest with the CSCO May11 17 Call trading down .82 to 23 on 66,244 contracts. A CSCO Jan12 20 Call trades about 40,000 contracts. CSCO is at 17.04. The CBOE Volatility Index (CBOE: VIX ) sees traders exchange 38,322 contracts on the VIX Jul11 27.5 Call strike. The strike is last at 1.30, down .05. Major Stock Trading Volume Movers Wilshire Bancorp. (NASDAQ: WIBC ) trades 15 million shares but is unch at 3.06. Wilshire announced it would sell 36.4 million shatters at 2.75 each with hopes of garnering $100 million for capital needs. Northstar Realty (NYSE: NRF ) trades almost 14 million shares, and is down .21 to 4.49. It announced plans for a public offering of 15 million shares at 4.25. Find more option analysis and trading ideas at Options Trading Strategies . Stocks/Underlying – Big Daily Change in Option Volume RR Donnelley and Sons ( NYSE: RRD ) trades more than 32,000 option contracts, a rise of more than 7,000%. Cusick notes that much of this is a trader creating a Sept 20 Put position with sales at $1.15. RRD is trading near 52-week high and recently announced plans for a $1 billion share buyback. Including the gathered premium, the trader would pay $18.85 for the shares if the options are put to him. Huntsman Corp. (NYSE: HUN ) trades more than 37,000 options as stock drops .88 to 19.31. The chemical firm recently reported 1Q revenues rose 28% with earnings at 47 cents per share, well over analyst estimates. Stocks/Underlying – High Option Volume The SPDR S&P 500 (NYSE: SPY ) has option volume of nearly 1 million contracts with the index rising .61 to 135.05. The Standard & Poor's Index Options (CBOE: SPX) is up 6.03 to 1348.11 on nearly about 250,000 options. The iShares Silver Trust (NYSE: SLV ) is down .25 to 34.14 on 601,000 option contracts. Cisco is down .79 to 16.99 and trades 260,000 options this morning. The VIX trades about 200,000 contracts and is down .70 to 16.25. New Citigroup (NYSE: C ) trades 139,000 options as underlying moves down .72 to 42.20. Burney Simpson is the managing editor of InvestorPlace options pages.
Markman: Adding Apple Could Lift the Dow
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InvestorPlace
Prices always move against the majority at risk, which means they migrate toward surprises. Two of the biggest surprises in the week before the Bin Laden news were the moonshot by Intel (NASDAQ: INTC ) and the continued strength among major health care stocks, and particularly Big Pharma. And thanks to the heavy pull of Intel’s $125 billion market cap, the semiconductor leader has managed to pull up indexes like the Dow that it plays a role in. That’s just one more reason it’s important to rethink the old nature of these indexes and lean more towards tech heavyweights like Intel — or put bluntly, a reason to finally make Apple Inc. (NASDAQ: AAPL ) a Dow component to give the index a jolt. First, take a look at the monthly, 10-year chart of Intel (above) as a case study. You can see that in the past month the stock touched the bottom of its uptrend — in the week before it announced earnings — and then surged to close at a three-year high. That high is just peeking over the top of its 10-year downtrend. Think about it: Intel has been growing steadily for 10 years but shareholders have been getting no credit for it because the price/earnings multiple has been shrinking. Our thesis now is that companies deemed to be part of a global Nifty 250 will start to see multiple expansion as underinvested pension funds focus on proven, undervalued winners that won’t embarrass them. This has major implications for the Dow Jones Industrials and the S&P 500, of which Intel is a big part. The heaviness of the tech goliath’s $125 billion market cap has been a drag on the indexes for a decade. If it continues to levitate now, it will supply one more key to unlock the hidden value of these major market benchmarks. This is important because it is not occurring in isolation. Until the autumn of last year, large-cap energy companies ExxonMobil (NYSE: XOM ) and Chevron (NYSE: CVX ) were holding the indices back, but after an incredible turnaround in the fall, even preceding the ramp in crude oil prices, these two companies are now cruising at all-time highs and are likewise much more of a lift than a drag. Then add in the new multi-year highs for Dow component Bristol-Myers Squibb (NYSE: BMY ), which had been malingering, as well as the recent romps by Dow component Pfizer (NYSE: PFE ) and American Express (NYSE: AXP ) — and the massive new highs in the past two weeks for Dow components DuPont (NYSE: DD ), Travelers (NYSE: TRV ), IBM (NYSE: IBM ), Caterpillar (NYSE: CAT ), Kraft (NYSE: KFT ), Coca-Cola (NYSE: KO ), Verizon (NYSE: VZ ) and Disney (NYSE: DIS ) — and suddenly it looks like something impressive is happening. A 30-stock index needs most of its oars in the water, rowing in the same direction, to make progress. Until recently, the Dow had been behind the pace because its sectors were all pulling in different directions. Drugs and energy had been a terrible drag, with tech and retail not far behind. But now drugs, heavy industry and energy are in synch, and retail, in the form of Home Depot (NYSE: HD ), is coming along. That leaves three dreadful tech pieces – Microsoft (NASDAQ: MSFT ), Cisco (NASDAQ: CSCO ) and Hewlett Packard (NYSE:HPQ) — as the main anchors, followed not far behind by stumblebums Alcoa (NYSE: AA ) and Bank of America (NYSE: BA ). The managers of the Dow Jones average would love to see it ring up new highs this year or next, so they will probably pull some strings. The most immediate boost they can give the index would be to kick out a couple of its smaller laggards and replace them with something fiery. So my expectation is that they will soon yank Alcoa, which has the smallest market cap, at $18 billion, and replace it with Apple (NASDAQ: AAPL ), whose market capitalization is second only to ExxonMobil and clearly deserves to be a part of the country’s financial benchmark. The cagey thing about adding Apple is that the Dow is a price-weighted index, rather than market cap weighted, and Apple would instantly have the highest price weighting, at $350. The next largest price in the index at present is IBM, at $170. This would mean that every dollar that Apple moves up advances the index by up to 10x more than the rise of a dollar of Alcoa, priced at $17. The bottom line is that the renewed strength of Intel and fellow former laggards, in conjunction with the likely addition of Apple, may well help push the Dow Jones Industrials much higher this year than the consensus believes possible. For more guidance like this, check out Markman’s daily trading service, Trader’s Advantage, or his long-term investment service, Strategic Advantage
Analyst Actions on Chinese Stocks: ASIA, BORN, CAST, CEA, CHA, LFC, MY, ONP ... (May 12, 2011)
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China Analyst
Below are today's Analyst Actions on U.S.-Listed Chinese Stocks.
Jefferies & Company reiterated Buy rating on AsiaInfo-Linkage, Inc. (NASDAQ:ASIA), with $27 price target. Cowen and Company reiterated Outperform rating on China New Borun Corp (NYSE:BORN). Global Hunter Securities reiterated Buy rating on Chinacast Education Corporation (NASDAQ:CAST), with $10 price target. Roth Capital Partners reiterated Buy rating and $13 price target on Chinacast Education Corporation (NASDAQ:CAST). Goldman Sachs reiterated Buy rating on China Eastern Airlines Corp. Ltd. (NYSE:CEA), with HK$5.10 price target on the company's Hong Kong-listed shares. Daiwa maintained Outperform rating and HK$5.00 price target on the Hong Kong-listed shares of China Telecom Corporation Limited (NYSE:CHA). Goldman Sachs maintained Neutral rating and HK$33.3 price target on the Hong Kong-listed shares of China Life Insurance Company Ltd. (NYSE:LFC). CCB International reiterated Neutral rating on China Ming Yang Wind Power Group Ltd (NYSE:MY), and cut price target from $11 to $9. Roth Capital Partners maintained Neutral rating on Orient Paper Inc (AMEX:ONP), and cut price target from $7 to $5. Deutsche Bank maintained Buy rating on SouFun Holdings Limited (NYSE:SFUN), and raised price target from $25.43 to $27.14. Goldman Sachs maintained Sell rating on SINA Corporation (NASDAQ:SINA), and raised price target from $105 to $110. Deutsche Bank maintained Sell rating and $54 price target on SINA Corporation (NASDAQ:SINA). Piper Jaffray maintained Overweight rating on SINA Corporation (NASDAQ:SINA), and raised price target from $107 to $139. Bank of America maintained Neutral rating on SINA Corporation (NASDAQ:SINA), and raised price objective from $88 to $132. Daiwa maintained Outperform rating and HK$9.80 price target on the Hong Kong-listed shares of China Petroleum & Chemical Corp. (NYSE:SNP). Piper Jaffray maintained Overweight rating and $22 price target on 3SBio Inc. (NASDAQ:SSRX). Morgan Stanley reiterated Overweight rating on 3SBio Inc. (NASDAQ:SSRX), with $21 price target. Citigroup maintained Buy rating on 7 Days Group Holdings Limited (NYSE:SVN), and reduced price target from $30 to $25.9. Goldman Sachs reitearted Buy rating on 7 Days Group Holdings Limited (NYSE:SVN), and maintained $29 price target. Roth Capital Partners maintained Buy rating on Winner Medical Group, Inc (NASDAQ:WWIN), and cut price target from $7.30 to $6.80. Jefferies & Company reiterated Buy rating on WuXi PharmaTech (Cayman) Inc. (NYSE:WX), and raised price target from $20 to $22. Oppenheimer maintained Outperform rating on WuXi PharmaTech (Cayman) Inc. (NYSE:WX), and raised price target from $20 to $22. Gleacher & Company maintained Neutral rating on Yingli Green Energy Hold. Co. Ltd. (NYSE:YGE). DBS Vickers maintained Buy rating on China Southern Airlines Limited (NYSE:ZNH), and raised price target from HK$4.40 to HK$5.00 on the company's Hong Kong-listed shares.
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