We have given details on each, with relevant price data, historic reference, an outlook, and in some cases an expectation and options call.
AeroVironment, Inc. (NASDAQ: AVAV) is the “Tech Trader” feature in Barron’s this weekend as a winner in war and peace. Barron’s mentioned that while it is known for unmanned aerial surveillance systems called the Raven drones, it has something that will be huge down the road called PosiCharge… a charging system for electric cars. Barron’s said it could rise another 20% this year from the $25.11 close Friday. The issue is that the 52-week range is $21.64 to $35.38 and the average analyst target is $27.85 and one analyst target is $35.00. We would expect a 2% to 3.5% move on Monday, at least on a market neutral basis.
Boston Scientific Corporation (NYSE: BSX) may be back in favor, if the stock market will cooperate. The company gained 2.8% to $7.34 on Friday after it reported that the FDA approved certain changes in the manufacturing of its Cognis defibrillators and Teligen defibrillators. This would have traded up higher (as it went as high as $7.54) had the stock market not been so weak on Friday. Its 52-week range is $6.31 to $11.77, so the risk-reward profile on any good news is above normal. It traded 91 million shares, the highest volume since its product woes came out in mid-March. Keep this on your radar as the stock fell from $7.78 to $6.80 when it had to halt shipments in March. Maybe this perpetual turnaround stock can finally turn around.
Citigroup, Inc. (NYSE: C) is on deck with earnings Monday. Estimates are $0.00 EPS and supposedly $20.77 billion in revenues, although frankly estimates are all over and trader gossip is even more than all over the place. Goldman Sachs news just boinked this one Friday for a 5.2% loss, so enough said. The earnings season bias just took a turn for the worse.
General Growth Properties Inc. (NYSE: GGP) is one to watch in M&A. It is reportedly open to a higher bid from Brookfield, but shares were hit on Friday as the Simon Property bid includes the help of Paulson & Co. Anything tied to Paulson took a huge hit Friday because of the Goldman-Paulson connection. The drop was 3.9% to $15.38, but the low on Friday was listed as $14.40 but looks closer to $15.00 if you back out the plunge price mid-day. Brookfield’s ‘sweeter bid’ may not have to be a lot sweeter now. A May-2010 $15 straddle cost $2.35 here, too expensive to play after a run it has already seen.
Hospira Inc. (NYSE: HSP) fell about 1% in the after-hours session on Friday on news that it had received a FDA warning letter after two manufacturing site inspections cited particulate in emulsion products and a failure to adequately validate manufacturing processes. While it is not required to stop all shipments, Hospira said it was now withholding shipments of certain products. Shares had hit a new 52-week high just on Friday and the 52-week range is $30.52 to $58.13.
Lululemon Athletica Inc. (NASDAQ: LULU) is one that appeared to be running out of gas on the chart, but that did not come to pass. We noted earlier in the week, “If it does not go out another $1.00 or more above the $43.66 level of last Friday, IBD won’t have it as the #1 stock.” Well, it went out at $44.62 even after a 1% drop on Friday, and IBD has this listed as being the #1 stock in the IBD 100. It looked like it was peaking, but either way I cannot recall any recent instances where the #1 stock on the IBD 100 was the same for 4 weeks in a row. It seems that Downward-Dog just doesn’t want to come to this stock.
It did not look like gold would go under that, but then the Paulson & Co. ties to the fund and to a huge gold bet (dedicated gold fund) kicked gold right between the legs. After a $22.00 drop to $1,136.40, Adam’s pivot may now be a near-term ceiling for all the reasons he outlined in detail.
On a side note, Direxion may be the one winner in the Goldman and bank mess. Its triple-leverage ETFs finally saw a huge resurgence of trading on Friday, and we noted at VSInvestor.com that the Direxion Daily Financial Bear 3X Shares (NYSE: FAZ) and Direxion Daily Financial Bull 3X Shares (NYSE: FAS) had their busiest combined day of 2010 in trading volume; the FAS saw the second most active day of the year. The triple-bull closed down 10.47% and the triple-bear closed up 10.33%.
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JON C. OGG
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