24/7 Wall St. » Trading Alert

CME Lowers Energy & Metals Margin Trading Requirements (CME, GLD, USO, SLV, JJC)

Administrator — Thu, 09 Feb 2012 22:37:13 +0000

CME Group Inc. (NYSE: CME) is going to make it cheaper for traders to trade energy and metals futures, something which could make it easier and cheaper for traders, speculators, and investors to push prices higher. So goes the theory at any rate. The exchange will set the lower rates as of Monday, February 13, 2012.

Effectively, the CME is lowering the cost to trade crude oil, gold, silver, copper, and a few other commodities. So far this has had no impact on prices of the SPDR Gold Trust (NYSE: GLD), United States Oil Fund (NYSE: USO), iShares Silver Trust (NYSE: SLV), nor in the iPath DJ-UBS Copper TR Sub-Index ETN (NYSE: JJC).

In the past, margin costs were raised on traders as an effort to curb runaway trading to the upside by making it more expensive for traders and speculators to trade energy and metals. In short, driving up the cost of poker creates fewer gamblers. So what happens when they make it cheaper to trade?

The full details are here.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Accounting, Agriculture, Brokerage Firms, Commodities, Compensation, Corporate Governance, ETF, Exchange News, Financial Stocks, Food, International Markets, Metals, Oil & Gas, Regulation, Trading Alert Tagged: CME, GLD, JJC, SLV, USO

More Short Covering Exaggerates Solar Rallies (TAN, FSLR, SPWR, ENER, TSL, WFR)

Administrator — Thu, 09 Feb 2012 20:10:07 +0000

Solar stocks are on fire. Still, they are so far down from a year ago that celebrating the move it difficult to do. To show just how powerful this move up and down and up has been, look no further than the solar ETF via the Guggenheim Solar ETF (NYSE: TAN). This ETS is up 10% today and the move has been now almost 60% from the lows of December 28. Still, the $3.83 price compares to a year ago high of over $9.00 and it is down from over $11.00 at the start of 2010.

Many solar stocks are likely experiencing rapid short covering. Sticking around for the lowest prices after serious success is a sucker’s game. There may also be a political angle here now that President Obama’s poll numbers are looking a bit better. The problem is that it is going to take more now than a President with a continued favorable stance to alternative energy. The fundamentals remain weak and now investors are getting to evaluate whether there is any value of if they are value traps. Take a look at some of the moves…

First Solar, Inc. (NASDAQ: FSLR) is up 7.5% at $49.29 against a 52-week range of $42.50 to $175.45. The most recent short interest data showed that the short interest was 18 million shares and that was actually down from most reports in the fourth quarter of 2011

SunPower Corporation (NASDAQ: SPWR) is up over 13% at $8.53 today against a 52-week range of $4.94 to $23.36. The most recent short interest data showed that the short interest was 5.7 million shares, down from a November peak of 9.3 million shares and much lower than the 11.7 million shares short back at the end of June.

Energy Conversion Devices, Inc. (NASDAQ: ENER) is even up 12% to $1.29 and no longer at much of a delisting risk. Its 52-week range is $0.20 to $4.29. The most recent short interest data showed that the short interest was 11.4 million shares at the lowest levels in a year since it had become a penny stock.

Trina Solar Limited (NYSE: TSL), out of China, is up a whopping 24% at $11.44 against a 52-week range of $5.28 to $31.08. That makes for a gain of 70% so far in 2011 and it would have to almost rise 200% to challenge its year-high. The most recent short interest data showed that the short interest was 15.5 million shares.

MEMC Electronic Materials, Inc. (NYSE: WFR) is also up 8% at $5.78 against a 52-week range of $3.65 to $15.04. That gives a gain of almost 47% so far in 2012. The most recent short interest data showed that the short interest was 14.5 million shares and that was actually higher than at the end of 2011 even if it is lower than prior months.

JON C. OGG

Filed under: 24/7 Wall St. Wire, ADR, Alternative Energy, Green Biz, Short Interest, Trading Alert Tagged: ENER, FSLR, SPWR, TAN, TSL, WFR

Apple Stock Still Looks Cheap At All-Time Highs (AAPL, XOM, MSFT)

Administrator — Tue, 07 Feb 2012 22:26:38 +0000

Yet another all-time high for shares of Apple Inc. (NASDAQ: AAPL). Whether it is iPhone, Mac, iPad, or the chatter of the coming AppleTV… The run here has been amazing when you consider how the run came after the earnings blow out seen last month. This is not even happening on record volume and it may even be not on active volume at all.

Let’s just call it a seller’s strike. You can’t find anyone selling Apple. In the ten trading sessions since earnings, the days with gains have been on seven of the ten days but the days with losses have been only negligible.

Apple jumped to $446.66 after earnings, up from $420.41 at the close on the day of its earnings. Now shares have closed up 1% at $468.83 for a new all-time high closing price and Apple’s market cap is now at a staggering $437 billion.

And to think… Apple is trading at only 11-times the implied 2012 earnings estimates. By now it has more than $100 billion in cash on the books. One day this run will end, but who knows when… James Altucher gave a $1,000 Apple call last night on CNBC. The consensus target is now $562.96 and some analysts see $650 as a target.

This stock is now much larger than Exxon Mobil Corporation (NYSE: XOM) and about its only care about Microsoft Corporation (NASDAQ: MSFT) is now just remembering that there is supposed to be a rivalry.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Consumer Electronics, HI/LOW, Large Cap Stocks, PC Companies, Trading Alert Tagged: AAPL, MSFT, XOM

Research Stays Bullish On Gold & Silver Over S&P 500 (GLD, SLV, SPY)

Administrator — Fri, 03 Feb 2012 14:23:38 +0000

TrimTabs is out with its newest round of investment research and it is calling for investors to buy gold and silver for the long-term on what it calls a dollar cost average basis. While the move may be different today after the employment data, this is going to be music to the ears of investors who are in SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV) for a multi-year outlook.

Charles Biderman noted, “The U.S., Europe, and Japan are printing enormous sums to pay their bills and in turn are devaluing their paper currencies. I doubt that’s going to change because it’s much easier for central bankers to print money than it is for politicians to cut spending.”

Biderman went on to note that gold and silver prices are going to skyrocket from retail money chasing a limited supply of the metals. On silver he noted, ““The gains in silver could be particularly strong because the silver market is much smaller than the gold market. Silver ETFs have only one-ninth the assets of gold ETFs.”

The current unemployment data from today is signaling that the Fed Funds rate hikes could come toward the end of 2013 now rather than the end of 2014, but that is one-month data.

TrimTabs goes on to note that monetary easing by the Federal Reserve and the European Central Bank has helped push up gold and silver prices much more than stock prices. He even noted that since QE2 was announced, the gold ETF is up 41% versus the 30% gains for the SPDR S&P 500 (NYSE: SPY) gain of 30% after including dividends.

The report even noted that in the past three weeks alone there has been a $1.4 billion inflow into gold ETFs by investors while silver ETFs saw smaller inflows.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls, Commodities, Index, Metals, Trading Alert Tagged: GLD, SLV, SPY

Did Baidu Earnings Confusion Cause Exponential Options Trading Volume? (BIDU)

Administrator — Mon, 30 Jan 2012 21:57:54 +0000

Baidu, Inc. (NASDAQ: BIDU) has seen quite a bit of stock options trading today, and it was a day in which stock trading was more active than normal as well. We do not have the final figures in yet for total contracts versus historical volume but the options trading volume was more skewed to CALLS over PUTS and much was in the shorter dated expirations. Most was in February and in the weeklies rather than the March options, although a glance at the March options showed more than 15,000 CALLS and the $135 and $140 strike prices for March had more volume today than there were contracts in the open interest. For February, we tallied up more than 70,000 CALLS with six of the strike prices having traded more contracts than the entire float.

Many investors believed that the company’s earnings report was going to be today but we do not yet have any formal date for its earnings release.

Is it possible that today’s trading bump in CALL and PUT options was simply a calendar mistake? This seems odd, but in today’s world and with the way reporting has been out of China the best rule is to not be surprised by anything there any longer.

Baidu’s stock (or ADR) closed down 0.5% at $130.73 and its 52-week trading range is $100.95 to $165.96.

JON C. OGG

Filed under: 24/7 Wall St. Wire, ADR, China, Internet, Options, Trading Alert Tagged: BIDU

The Juniper & Riverbed Tails Wagging The Cisco Dog (JNPR, CSCO, RVBD)

Administrator — Thu, 26 Jan 2012 22:49:36 +0000

Juniper Networks, Inc. (NYSE: JNPR) is often considered the baby versions of Cisco Systems, Inc. (NASDAQ: CSCO). That characterisation may not be fair, but that is another story. Investors and traders treat these often on an interchangeable basis. Then you have to throw in the situation at Riverbed Technology, Inc. (NASDAQ: RVBD) on its earnings report.

Riverbed Technology, Inc. (NASDAQ: RVBD) is getting hit very hard, perhaps even too hard, after its 53% profit gains beat expectations and revenue met estimates more or less. The problem is that the company’s guidance for the quarter ahead remains challenging. Riverbed was up 1.2% at $29.92 today but now the stock is down almost 13% in the after-hours session to $26.00 per share in active trading.

So, as far as Juniper is concerned, its non-GAAP profit fell to $0.28 EPS from $0.35 a year earlier while revenue fell to $1.12 billion from $1.19 billion a year earlier. Those were more or less in-line with estimates, but the company talked about the current quarter being a challenging one and it cut sales expectations to $960 to $990 million versus a target of about $1.1 billion. That is just heading very much in the wrong direction no matter how you cut it. Juniper closed down 1% today and the after-hours earnings reaction has shares down almost 8% at $20.60 in active after-hours trading.

There is an old saying that a tail cannot wag the dog. Unfortunately that is not proving to be the case this evening. Cisco Systems, Inc. (NASDAQ: CSCO) is the king of the networking space and its shares are down 1% at $19.62 in the after-hours after closing flat at $19.83. Cisco is in a turnaround and it is believed by many that Cisco is trying to win back much of its lost business in a leaner operating structure. We’ll know in the coming weeks if that is true or not.

Stay tuned.

JON C. OGG

Filed under: 24/7 Wall St. Wire, After-Hours Activity, Earnings, Earnings Warning, Trading Alert Tagged: CSCO, JNPR, RVBD

Ron Johnon’s Magic, When 20% Stock Gains May Be Enough (JCP, AAPL)

Administrator — Thu, 26 Jan 2012 20:05:39 +0000

It was just on January 5 that we called the news on J.C. Penney Company, Inc. (NYSE: JCP)… Bad News Is Good News! Our take was that the company big drop was a chance for investors to get in ahead of the Ron Johnson presentation for the company’s new store concept. After being the brains behind the Apple Inc. (NASDAQ: AAPL) retail initiative, how could you NOT follow Ron Johnson? The concept is off to a rocking good start despite that nothing has really yet happened in the numbers. It is all in the guidance and the concept and the hope that Ron Johnson’s presentation for guidance will drive value in the year or two ahead. So, what is the outlook now for investors?

The guidance on January 5 was victim of soft sales in the first two months of the quarter generating slightly negative same-store sales for its fourth quarter with non-GAAP earnings coming in a range of $0.65 to $0.70 earnings per share.

Our thesis was simple” For new investors, this is not a fourth quarter story. This is not a story of guidance for the current quarter, and it may not even be a story of strong results in 2012… Ron Johnson is set to transform the look and feel of this company entirely.”

Penney’s shares at the time of our call were down over 6% on that day at $32.75. The problem now, if there is a problem, is that the new concept unveiling and the leaner retail worker structure has met a guidance presentation all in one week.

A gain of 15% to $39.48 on Thursday now has shares up 20%. Why is this a problem? The consensus analyst target is down under $34.00 and the 52-week trading range is $23.44 to $41.00. It was known that Ron Johnson was going to use his Apple magic to transform the company. It was known that he was going to have the presentations.

A 20% gain in three weeks is generally a gift no matter how you cut it. Even if analysts raise their price target objectives substantially, at a minimum we would only look to enter on a pullback now. Taking at least some profit at this point would not hurt anyone even if it is only on part of the position.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Activist Investor, Apparel, Compensation, Consumer Goods, Corporate Governance, Management Change, Retail, Trading Alert Tagged: AAPL, JCP

Tracking The highly Unusual Short Interest Trends (ALU, BAC, DNDN, DMND, FSLR, F, GMCR, HGSI, LNKD, NFLX, RIMM, SIRI)

Administrator — Thu, 26 Jan 2012 15:08:32 +0000

Cult stocks and controversial stocks often have an unusually high short interest. What is amazing is that the bets against these companies sometimes go off the charts. We have tracked unusual short selling activity in shares of the following: Alcatel Lucent S.A. (NYSE: ALU); Bank of America Corporation (NYSE: BAC); Dendreon Corporation (NASDAQ: DNDN); Diamond Foods, Inc. (NASDAQ: DMND); First Solar, Inc. (NASDAQ: FSLR); Ford Motor Co. (NYSE: F); Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR); Human Genome Sciences, Inc. (NASDAQ: HGSI); LinkedIn Corporation (NYSE: LNKD); Netflix, Inc. (NASDAQ: NFLX); Research in Motion Limited (NASDAQ: RIMM); and Sirius XM Radio Inc. (NASDAQ: SIRI).

We covered the short interest changes for the January 13 settlement date and compared them to the December 30 short interest data and added in other color if applicable.

Alcatel Lucent S.A. (NYSE: ALU) rose to 22.54 million shares from over 18.2 million for a gain of almost 24%.

Bank of America (NYSE: BAC) rose 18.5% to 186.1 million from over 157 million at the end of December.

Dendreon Corporation (NASDAQ: DNDN) saw nearly a 6% gain to 34.76 million shares in the short interest to its highest level in a year.

Diamond Foods, Inc. (NASDAQ: DMND) saw a gain of 12% to 10.46 million shares during its time of accounting woes, but this is still not as large as in OCT/NOV-2011.

First Solar, Inc. (NASDAQ: FSLR) was down only marginally. The solar leader (and whipping boy) was down again to 18.04 million shares from a reading of 18.7 million at the end of 2011. Be advised that this was FIVE STRAIGHT lower readings in the short interest.

Ford Motor Co. (NYSE: F) was up by 14.7% to 147.1 million.

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) remains a battleground stock and the uptick was less than 1% to 26.489 million shares in the short interest. That is still down about 10% from last year’s peak.

Human Genome Sciences, Inc. (NASDAQ: HGSI) posted another rise in the short interest to a new year record of over 32.2 million shares in the short interest. So much for loving the lupus drug.

LinkedIn Corporation (NYSE: LNKD) continues to see rising bets against its stock. The reading was 6.9 million shares short and that marks EIGHT STRAIGHT gains in the bets against the stock.

Netflix, Inc. (NASDAQ: NFLX) may feel after-the-fact now that earnings are out, but the short interest rose by a sharp 25% to 11.422 million shares. That is the highest short interest reading since last March. Today’s gains have to be some short covering.

Research in Motion Limited (NASDAQ: RIMM) has had the vultures circling it for some time but this last short interest reading of 36.6 million was down more than 3% and was actually the lowest short interest reading since the end of last July. Maybe all the short-sale money has been made since the stock fell about 75%.

Sirius XM Radio Inc. (NASDAQ: SIRI) always has a high short interest due to its low price and controversial stock… What is interesting is that the gain was not even 2% in short shares to 305 million BUT… That is the highest short interest since the end of last May.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Activist Investor, Cult Stock, Short Interest, Trading Alert Tagged: ALU, BAC, DMND, DNDN, F, FSLR, GMCR, HGSI, LNKD, NFLX, RIMM, SIRI

Top After-Hours Stocks on the Move (IDCC, NVDA, PLCM, TXN, VMW, EMC, WDC, ZION)

Administrator — Mon, 23 Jan 2012 22:27:36 +0000

We have several stocks on the move in Monday’s after-hours trading session. Most of these are on earnings as follows: InterDigital Inc. (NASDAQ: IDCC); NVIDIA Corporation (NASDAQ: NVDA); Polycom Inc. (NASDAQ: PLCM); Texas Instruments Inc. (NYSE: TXN); VMware Inc. (NYSE: VMW); EMC Corporation (NYSE: EMC); Western Digital Corporation (NYSE: WDC); and Zions Bancorporation (NASDAQ: ZION). We have given a news summary and the current moves on each.

InterDigital Inc. (NASDAQ: IDCC) was down 3.3% today as is, but now the company is getting slashed and burned on news of what many had considered an obvious coming outcome. The company ended its strategic review process and it did not find a buyer for its deep patent collection. Now it is going to proceed on its own licensing or selling patents. Shares are down over 16% at $37.10 in the after-hours against a 52-week range of $34.61 to $82.50.

NVIDIA Corporation (NASDAQ: NVDA) was down 3% after the Texas Instruments earnings but now shares are down “only” about 0.6% after closing up 2.7% on the day.

Polycom Inc. (NASDAQ: PLCM) has a history of big hits and bad misses, but tonight’s reaction has shares on the up and up. After beating earnings handily, Polycom shares are up 9.6% at $20.29 and that is after closing up almost 4% today.

Texas Instruments Inc. (NYSE: TXN) was down initially due to headlines showing GAAP earnings above estimates but the chip giant is now up over 3% ay $34.25 in the after-hours session against a 52-week range of $24.34 to $36.71.

VMware Inc. (NYSE: VMW) closed down 2.4% at $86.00 today but shares are up 5% at $90.50 on almost 1 million shares after just over an hour after the 4PM closing bell. The virtualization leader said sales rose 27% to $1.06 billion and it sees revenues of $1.015 billion to $1.04 billion for the first quarter of 2012. These are being taken as above plan. The news has the (former) parent company of EMC Corporation (NYSE: EMC) up about 1.8% at $23.87 on over 2 million after-hours shares.

Western Digital Corporation (NYSE: WDC) may have seen earnings drop almost 36%, but the update is proving to be above plan and it claims to be making much more progress in Thai floods. Shares closed up marginally today and the after-hours reaction has shares up 4.4% at $36.25 versus a 52-week range of $22.64 to $41.87.

Zions Bancorporation (NASDAQ: ZION) posted earnings light at $0.30 versus estimates of $0.33. Its book value per common shares grew to $25.02 from $24.78 one quarter earlier and shares are down 3% at $17.98 in the after-hours.

JON C. OGG

Filed under: 24/7 Wall St. Wire, After-Hours Activity, Trading Alert Tagged: EMC, IDCC, NVDA, PLCM, TXN, VMW, WDC, ZION

Over 10 Big Stocks Hitting New All-Time Highs (AAPL, DLTR, ECL, MCD, MNST, NKE, PNRA, SBUX, AAP, AZO, ORLY)

Administrator — Wed, 18 Jan 2012 19:52:12 +0000

The logic from technical traders is simple: “Stocks hitting new highs tend to keep hitting new highs.” Eventually that comes to an end, sometimes a painful end. Until that end arrives it sure gives the bulls a lot to cheer about. When these are big companies of $10 billion and more hitting all-time highs, the bulls get even more excited. Here are just some of the all-time highs which have been seen today:

Apple Inc. (NASDAQ: AAPL) hit a new high this morning ahead of next week’s earnings. The new value is almost at $400 billion. The new high is $428.50 for now and the consensus price target from Thomson Reuters is now above $509.00.

Dollar Tree, Inc. (NASDAQ: DLTR) is continuing with the trade-down economy and the secular growth of the dollar store (actually sub-$10) stores. The new high is $85.58 and the consensus price target is $86.27 from Thomson Reuters. Dollar Tree is now worth more than $10 billion in market capitalization.

Ecolab Inc. (NYSE: ECL) is worth almost $14 billion now, and the new high today of $60.45 compares to a Thomson Reuters consensus price target of $61.56.

McDonald’s Corporation (NYSE: MCD) gave solid same-store sales forecast and recently juiced up its dividend. The new high is $101.87 and the market cap is nearing $104 billion.

Monster Beverage Corporation (NASDAQ: MNST) recently announced a stock split and shares hit a new high this morning but have promptly backed off by close to 2%. The new high is $101.67 and the consensus analyst target is close to $105.00. It is hard to imagine, but Monster now has a market value of almost $8.7 billion.

Nike Inc. (NYSE: NKE) keeps doing it. A new high of $100.75 was put in today after a prior 52-week high of $99.44. Its market value now eclipses $46 billion.

Panera Bread Company (NASDAQ: PNRA) is up at stratosphere levels now for its healthier sandwich and destination approach. The new high is $151.93 and the consensus price target from Thomson Reuters is $146.68. Its market cap is now almost $4.5 billion.

Starbucks Corporation (NASDAQ: SBUX) has proven us very wrong on how high the valuation can go back up to. The new high is $48.15 and the consensus price target from Thomson Reuters is just under $48.00 and the market cap is now more than $35 billion.

Advance Auto Parts Inc. (NYSE: AAP) worth over $5 billion, AutoZone, Inc. (NYSE: AZO) worth over $13 billion, and O’Reilly Automotive, Inc. (NASDAQ: ORLY) worth over $10 billion… These all hit record high prices in their stocks on Wednesday. With a record age car fleet in America of more than 10 years, car parts stores and suppliers sure are going to have a lot of car owners to sell parts to that are long past the warranty and insurance coverage.

JON C. OGG

Filed under: HI/LOW, Technical Analysis, Trading Alert Tagged: AAP, AAPL, AZO, DLTR, ECL, MCD, MNST, NKE, ORLY, PNRA, SBUX