by Steve Claussen on June 8th, 2011
The much-ballyhooed Apple Worldwide Developers Conference was held Monday, and Steve Jobs was there in his ever-present turtleneck to offer the keynote address. As expected, among the product team’s major announcements was a new operating System – OS X Lion – and the iCloud service that will sync a user’s personal information (email, contracts, calendars, iBooks, song purchases, and more) among Apple devices and the web. Example – buy a song on your iPad and it will be available to download on your iPhone without having to plug anything in.
This week, however, Apple shares have dropped 3% in a solid demonstration of “buy the rumor, sell the news.” In the two weeks leading up to this meeting, the stock rose roughly 4% and has sharply backpedaled beginning in early-afternoon trading on Monday.
Perhaps investors were hoping for an iPhone 5 announcement or were underwhelmed by the unveilings they did hear. Either way, the reaction is making Apple investors wince, at least for a little while. Continue Reading
by Steve Claussen on March 2nd, 2011
Apple (NASDAQ:AAPL) appears to be bouncing back after a rough second half of February. From February 16 through last Thursday, the shares dipped from an annual high near $365 to below the $340 level.
Last Friday, as the market put in its first positive session for the week, Apple shares began to claw higher as well and have already recovered back above the $350 level. After rebounding off its 50-day moving average last week, the stock has now moved back above its 10-day and 20-day moving-average trendlines. Continue Reading
by Steve Claussen on February 18th, 2011
Investors may have a renewed interest in U.S. Steel (NYSE:X) Corp. this week after a Goldman Sachs analyst upgraded the stock. The covering analyst booted his overall rating to “buy” from “neutral,” lifted his earnings forecasts through 2013, and raised his 12-month price target by 23% to $75.
In a note to clients, the Goldman analyst referenced “overdone” worries about a recent dip in scrap prices and in fact projects rising steel prices. Against this backdrop, U.S. Steel is in a good position to benefit as it has “one of the best cost positions on the raw materials,” the analyst noted. Continue Reading
by Steve Claussen on February 15th, 2011
Teva Pharmaceuticals (NASDAQ:TEVA) hasn’t had the greatest week as far as analyst opinion is concerned. Research analysts at Deutsche Bank reduced their 12-month price target on the stock to $64 from $66 on Wednesday, albeit keeping a “buy” rating on the shares.
Elsewhere, Morgan Stanley lowered its earnings estimates on TEVA through 2012. The firm expects 2011 earnings of $5.05 – down from earlier projections of $5.29 – and 2012 earnings of $5.78, from its previous estimate of $6.04 per share.
In terms of price action, TEVA has been virtually flat over the past six months and is down 1% year-to-date, including a sharp drop last week after failing to match analysts’ earnings expectations for the fourth quarter of 2010 or the 2011 fiscal year. Continue Reading
by Steve Claussen on February 3rd, 2011
Verizon Communications Inc. (NYSE:VZ) has seen a significant increase in volume in 2011. While part of this is attributable to an overall market increase in trading activity, the impending availability of the iPhone has also sparked interest among investors.
Since the January 11 announcement that Apple’s smartphone is coming to the VZ network on February 10, VZ shares have been virtually flat after a mid-month pullback. Wall Street’s short-term outlook has been mixed on the stock. While Deutsche Bank recently downgraded the stock from buy to hold, Goldman Sachs added it to its conviction buy list, noting that the carrier’s “appeal to investors should improve over the course of the year.” Continue Reading
by Steve Claussen on January 31st, 2011
No, that title’s not a misprint and you don’t have déjà vu. Japanese automaker Toyota Motor (NYSE:TM) is under fire again because of another recall, which this time impacts 1.7 million vehicles worldwide. The culprit this time is a fairly broad one – “defective parts” – including but not limited to leaky fuel systems.
In the U.S., the recall is expected to impact about a quarter-million Lexus vehicles. The majority of the impacted autos were sold in Japan. This latest recall brings the total number of Toyota vehicles recalled to more than 15 million globally since late 2009.
On the “plus” side, arguably, is the company’s transparency surrounding the latest defect. TM has been shouldered with fines of nearly $50 million due to its perceived hesitancy in reporting problems it discovers. As a result, the automaker has pledged to be more forthcoming with information. Continue Reading
by Steve Claussen on January 25th, 2011
McDonald’s (NYSE:MCD) had an intraday reversal yesterday, losing ground in early trading before recovering back into positive territory, thanks to its fourth-quarter earnings report. Ahead of the open, the fast-food giant said it collected $1.16 per share in profits, matching the consensus view. Revenue rose 4% on a year-over-year basis to $6.2 billion, also in line with what analysts were expecting.
In the conference call that accompanied the earnings figures, MCD said it is well-positioned to invest in its business. The company plans to invest $2.5 billion of capital to build 1,100 new restaurants and give a face lift to many existing locations.
For the current month, MCD expects global comparable sales to increase 4% to 5%. Its breakfast dollar menu has been strong, the introduction of fruit smoothies has been successful so far, and the McCafe coffee drinks is having a positive impact on the international breakfast business. They say beef is currently their most volatile cost, so who knows, they may borrow from fellow fast-food brand Chick-fil-A and encourage customers to “Eat Mor Chikin [sic].” Continue Reading
by Steve Claussen on January 20th, 2011
Google (NASDAQ:GOOG) is reporting tonight after the close; analysts expect per-share results of $8.09, a 19% increase from year-ago numbers. Analysts have been hedging ahead of this report by sounding their opinions on the mega-cap shares.
ISI Group initiated coverage on the shares with a “hold” rating and a 12-month price target of $675. This target allows for just 7% in upside, in line with the 7% GOOG has gained in the past 52 weeks. (In the past six months, however, the stock has rallied 35%).
Elsewhere, Oppenheimer upped its price target on GOOG from $640 to $705 with an “outperform” rating on the stock. The firm noted that non-search revenue has improved at the search giant. Continue Reading
by Steve Claussen on January 14th, 2011
Watch for falling stock prices? Goldman Sachs recently expressed bearish sentiment on Wal-Mart Stores (NYSE:WMT), downgrading shares of the retailer to neutral from buy. Reasons for the downgrade included inflationary risks in the food and apparel sectors, which could limit margin upside. Goldman analysts also opined that the sheer size of WMT limits growth potential for same-store sales.
Going back to the late 90s, WMT has been the epitome of a range-bound stock, spending nearly all of its time bouncing between 40 and 60. The stock is now trading near the upper end of this long-term range. What’s more, the stock is within a dollar of its 52-week high of $56.27.
Simply buying or selling range-bound stocks may not be the quickest way to profitability; if the stock doesn’t move, portfolios don’t either. There are, however, options strategies designed for low-volatility stocks and indices. To learn more about the pros and cons of these neutral trading strategies, join Bill Sullivan and me for our free Two Traders, One Strategy series Tuesdays after the close. Next Tuesday’s webinar strategy? Iron condors. Continue Reading
by Steve Claussen on January 12th, 2011
With copper and gold prices expected to keep charging higher, it’s no surprise that analysts have turned their attention to Freeport-McMoRan Copper & Gold (NYSE:FCX). Monday, Stifel Nicolaus upped its rating on the stock to “buy” from “hold” with a 12-month price target of $140 (according to Bloomberg). This is roughly 18% of upside from current levels.
FCX shares are poised to overtake the 120 level for the first time since mid-2008. The stock’s uptrend has been strong, taking the shares 80% higher in the past six months.
Bulls may believe that the trend is Freeport’s friend as it fights to overcome this next level of technical resistance. FCX skeptics may feel that the metals futures could be ready for a pullback, which could in turn impact any related equities. Either way, investors may be looking for alternatives to simply buying or selling the stock outright. Options strategies such as the spreads described below might be worth considering. (New to options trading? Practice with fake money in a virtual trading account before putting any capital at risk). Continue Reading
