Brent Archer
Virginia, US - http://www.investorsobserver.com
Brent Archer is an options analyst and writer at Investors Observer.
Saks (SKS) tumbles on Q2 losses
Saks (NYSE: SKS - option chain) shares are falling today after the company reported second-quarter losses of $31.7 million, or $0.23 a share, this morning, less than analysts' estimates of -0.17. The company also forecast lower operating margins. If high-end retailers are hurting, then there is definitely some behavior of the average American consumer that is changing as well. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SKS.This morning, SKS opened at $10.60. So far today the stock has hit a low of $9.60 and a high of $10.61. As of 12:10, SKS is trading at $9.92, down $1.30 (-11.6%). The chart for SKS looks neutral while S&P gives SKS a positive 4 STARS (out of 5) buy ranking.
For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $12.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in three months as long as SKS is below $12.50 at November expiration. Saks would have to rise by more than 26% before we would start to lose money. Learn more about this type of trade here.
SKS hasn't been above $120 since late June and has shown resistance around $12 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in SKS.
Broadcom (BRCM) lifted by Barron's coverage
Broadcom (NASDAQ: BRCM - option chain) shares are moving higher today after an article in Barron's over the weekend said the stock could rise as much as 40 percent as the chipmaker enters the market for smartphones. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BRCM.BRCM opened this morning at $28.23. So far today the stock has hit a low of $27.76 and a high of $28.39. As of 12:20, BRCM is trading at $27.86, up 40 cents(1.5%). The chart for BRCM looks bullish and S&P gives BRCM a positive 4 STARS (out of 5) buy ranking.
For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just three months as long as BRCM is above $20 at November expiration. Broadcom would have to fall by more than 27% before we would start to lose money. Learn more about this type of trade here.
BRCM hasn't been below $20 since April and has shown support around $23 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BRCM.
SunPower (SPWR) shoots higher on PG&E deal
SunPower (NASDAQ: SPWR - option chain) shares are soaring higher today after Pacific Gas and Electric Co. said it has chosen SPWR to supply up to 800 megawatts of renewable energy. On the news, an analyst at Merrill Lynch also upgraded SPWR to "Buy" from "Hold." If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on SPWR.SPWR opened this morning at $87.64. So far today the stock has hit a low of $87.57 and a high of $93.93. As of 12:55, SPWR is trading at $93.26, up $14.69 (18.7%). The chart for SPWR looks neutral and S&P gives SPWR a 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $55 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think, but willstill leverage nice returns. For this particular trade, we will make an 11.1% return in just four months as long as SPWR is above $55 at December expiration. Sunpower would have to fall by more than 40% before we would start to lose money. Learn more about this type of trade here.
SPWR hasn't been below $55 since March and has shown support around $71 recently. With the way the political climate is shaping up, it looks like some form of solar power should be here for quite a while.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in SPWR.
Dr. Pepper Snapple (DPS) soars as earnings beat estimates
Dr. Pepper Snapple Group (NYSE: DPS - option chain) shares are flying higher today after the company reported this morning earnings that beat expectations by 5 cents and set its full-year forecast about 3 cents higher than previous analyst estimates. Even if consumers are spending less, it seems that charging $1.50 for two liters of soda that cost only a few cents to produce is still a good business model. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on DPS.DPS opened this morning at $22.21. So far today the stock has hit a low of $22.12 and a high of $23.77. As of 12:45, DPS is trading at $22.94, up $1.28 (5.9%). The chart for DPS looks neutral, but improving.
For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 16.3% return in just three and a half months as long as DPS is above $20 at November expiration. DPS would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.
Continue reading Dr. Pepper Snapple (DPS) soars as earnings beat estimates
Archer-Daniels Midland (ADM) rises on favorable USDA corn report
Archer-Daniels Midland (NYSE: ADM - option chain) shares are rising today after the Department of Agriculture lifted its corn production estimates and lowered its corn price estimates. The news is good for ADM since the company is a huge consumer of corn. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ADM.ADM opened this morning at $26.34. So far today the stock has hit a low of $26.04 and a high of $27.25. As of 12:30, ADM is trading at $27.09, up $0.75 (2.8%). The chart for ADM looks bullish and S&P gives ADM a positive 4 STARS (out of 5) buy ranking.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $22.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 22.0% return in just four months as long as HANS is above $22.50 at September expiration. ADM would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.
Continue reading Archer-Daniels Midland (ADM) rises on favorable USDA corn report
SYSCO (SYY) Q4 earnings impress
SYSCO (NYSE: SYY - option chain) shares are soaring higher today after the company reported a fourth-quarter profit of $334.1 million, or 55 cents per share, beating analysts' estimates of 52 cents per share(see more of today's earnings news). It turns out that low-cost, bulk food products are still in high demand, especially at a time when consumers pocketbooks are feeling the pinch, so fancier fare may be out of the question. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on SYY.SYY opened this morning at $30.29. So far today the stock has hit a low of $29.50 and a high of $31.47. As of 12:30, SYY is trading at $31.21, up $1.34 (4.5%). The chart for SYY looks neutral and S&P gives SYY a neutral 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $27.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just three and a half months as long as SYY is above $27.50 at November expiration. SYSCO would have to fall by more than 11% before we would start to lose money.
SYY hasn't been below $27.50 for more than a few days in the past year and has shown support around $28.50 recently.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in SYY.
Hansen Natural (HANS) lifts on energy drink earnings
Hansen Natural (NASDAQ: HANS - option chain) shares are soaring higher today after the company reported yesterday evening its second quarter profit jumped to 31 percent to $50.2 million on sales of its Monster energy drink. Despite missing estimates by a penny, the growth numbers and decreasing operational expenses are encouraging investors. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on HANS.HANS opened this morning at $21.43. So far today the stock has hit a low of $20.67 and a high of $23.42. As of 12:55, HANS is trading at $23.42, up 1.77 (8.2%). The chart for HANS looks bearish and steady.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $17.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns.
For this particular trade, we will make a 13.6% return in just six weeks as long as HANS is above $17.50 at September expiration. Hansen would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.
HANS hasn't been below $20 at all in the past year and has shown support around $21.50 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in HANS.
Abercrombie & Fitch (ANF) done in by weak July sales
Abercrombie & Fitch (NYSE: ANF - option chain) shares are tanking today after the company reported a 7 percent decline in same-store sales in July, much worse than the 1.4 percent decline expected by analysts. Apparently, suburban Moms and Dads decided that $100 jeans were not the correct place to spend their economic stimulus checks. Either that or they were finally turned off by the three-quarters naked models in the store windows. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ANF.This morning, ANF opened at $52.13. So far today the stock has hit a low of $49.55 and a high of $52.72. As of 12:50, ANF is trading at $49.55, down 6.18 (-11.1%). The chart for ANF looks bearish but S&P gives ANF a positive 5 STARS (out of 5) strong buy ranking.
For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $65 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in six weeks as long as ANF is below $65 at September expiration. Abercrombie would have to rise by more than 20% before we would start to lose money. Learn more about this type of trade here.
ANF hasn't been above $65 since late June and has shown resistance around $56 recently. This trade could be risky if the economy stages a rebound, but even if that happens, the position above could be protected by reluctant shoppers who still have lingering worries about their wallets.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in ANF.
Ralph Lauren (RL) surviving economic slowdown
Polo Ralph Lauren (NYSE: RL - option chain) shares are trading higher today after the company posted first-quarter earnings of $95.2 million, or 93 cents per share, blowing analysts' estimates of 72 cents per share out of the water. RL also lifted its full-year earnings forecast to a range of $4.00 to $4.10 per share, from previous guidance of $3.95 to $4.05 per share, above analysts' expectations $3.98 per share. It is looking like the slowing economic situation is not hitting RL that hard, which could also be a good sign for other high-end retailers as well. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on RL.RL opened this morning at $66.00. So far today the stock has hit a low of $63.90 and a high of $66.66. As of 12:45, RL is trading at $65.78, up $4.28 (6.9%). The chart for RL looks neutral and S&P gives RL a 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $55 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just seven weeks months as long as RL is above $55 at September expiration. Ralph Lauren would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.
Continue reading Ralph Lauren (RL) surviving economic slowdown
MGM Mirage (MGM) shoots higher on so-so earnings
MGM Mirage (NYSE: MGM / option chains) shares are soaring higher today even though the company announced its second-quarter profit fell 68.6% to $113.1 million as resorts lowered room rates and visitors spent less money. MGM posted earnings of 40 cents per share on sales of $1.9 billion, while analysts expected earnings of 42 cents per share on revenue of $1.89 billion. Even though the EPS missed estimates, investors seem to be focusing on revenues that beat estimates. The gaming sector has been beaten down so much over the first half of this year that it is possible anything other than a complete meltdown is a catalyst for the stock to rise. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MGM.
MGM opened this morning at $31.31. So far today the stock has hit a low of $31.04 and a high of $34.29. As of 2:35, MGM is trading at $33.85, up $2.85 (9.2%). The chart for MGM looks neutral and S&P gives MGM a neutral 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $22.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just seven weeks as long as MGM is above $22.50 at September expiration. MGM would have to fall by more than 33% before we would start to lose money. Learn more about this type of trade here.
Continue reading MGM Mirage (MGM) shoots higher on so-so earnings
Intercontinental Exchange (ICE) falls on Q2 earnings
InterContinental Exchange (NYSE: ICE) shares are falling today after the company reported second-quarter earnings of $84.9 million, or $1.19 a share, matching analysts' estimates. However, shares of ICE are declining today, as investors may be weighing the company's earnings against chief competitor Nymex Holdings (NYSE: NMX), which beat analysts' earnings forecasts last week and claimed to have won more market share from ICE in the hotly-contested West Texas Intermediate crude market. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ICE.After hitting a one-year high of $194.92 in December, the stock hit a one-year low of $80.20 in July. This morning, ICE opened at $98.49. So far today the stock has hit a low of $88.33 and a high of $98.49. As of 12:20, ICE is trading at $88.33, down $7.87 (-8.2%). The chart for ICE looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $120 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in seven weeks as long as ICE is below $120 at September expiration. InterContinental Exchange would have to rise by more than 35% before we would start to lose money. Learn more about this type of trade here.
ICE hasn't been above $120 since late June and has shown resistance around $103 recently. This trade could be risky if the overall market turns around quickly and stages a rebound, but even if that happens, the position above could be protected by resistance the stock might find at its 50-day moving average, which is currently around $113 and falling.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ICE nor NMX.
Sun Microsystems (JAVA) drops on forecast of losses
Sun Microsystems (NASDAQ: JAVA) shares are falling today after the company warned it will likely not turn a profit in the current quarter, despite having earnings come in at the high end of estimates this morning and announcing a stock buyback. JAVA executives said a weak financial sector has led to lower sales for the company. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on JAVA(see more pf today's earnings news).After hitting a one-year high of $25.04 in October, the stock hit a one-year low of $8.63 in July. This morning, JAVA opened at $9.84. So far today the stock has hit a low of $9.10 and a high of $10.02. As of 12:10, JAVA is trading at $9.31, down 1.32 (-12.4%). The chart for JAVA looks bearish and improving slightly, while S&P gives the stock a bearish 2 STARS (out of 5) sell rating.
For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $11 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in eleven weeks as long as JAVA is below $11 at October expiration. Sun Micro would have to rise by more than 18.5% before we would start to lose money. Learn more about this type of trade here.
JAVA hasn't been above $11 since late June and has shown resistance around $10.15 recently. This trade could be risky if the overall market starts to rally, but even if that happens, this position could be protected by resistance JAVA might find at its 50 day moving average, which is currently around $11 and falling.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in JAVA.
eBay drops on TV analyst's comments
eBay, Inc. (NASDAQ: EBAY) shares are falling today on no obvious news, but after CNBC analyst and BloggingStocks.com's own Jim Cramer said on his Mad Money TV show last night that he could not get behind the company, and that someone should buy them "and put them out of their misery." When Cramer talks, people have a habit of acting, so this could be the reason for the company's swoon. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on eBay. After hitting a one-year high of $40.73 in October, the stock hit a one-year low of $23.52 last week. This morning, EBAY opened at $25.21. So far today the stock has hit a low of $24.75 and a high of $25.41. As of 1:45, EBAY is trading at $24.80, down 0.58 (-2.3%). The chart for EBAY looks bearish and steady, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.
For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $30 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in three months as long as EBAY is below $30 at October expiration. eBay would have to rise by more than 20% before we would start to lose money. Learn more about this type of trade here.
Continue reading eBay drops on TV analyst's comments
New York Times (NYT) lifted by earnings, 20% price hike
Shares of The New York Times Co. (NYSE: NYT) are trading higher today after the company posted a second-quarter profit of $21.1 million, or 15 cents per share. NYT's adjusted profit came in at 26 cents per share, beating analysts' estimates of 22 cents per share. The company also annouced an increase int eh newsstand price from $1.25 to $1.50. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NYT.After hitting a one-year high of $23.85 last July, the stock hit a one-year low of $12.08 last week. NYT opened this morning at $13.05. So far today the stock has hit a low of $12.38 and a high of $13.42. As of 1:15, NYT is trading at $13.00, up $0.16 (1.1%). The chart for NYT looks bearish and steady, while S&P gives the stock a bearish 2 Stars (out of 5) Sell rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $12.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just four weeks as long as NYT is above $12.50 at August expiration. NYT would have to fall by more than 4.3% in the next few weeks before we would start to lose money. Learn more about this type of trade here.
Continue reading New York Times (NYT) lifted by earnings, 20% price hike
Continental Airlines (CAL) lifted by easing oil worries
Continental Airlines (NYSE: CAL) shares are trading higher today as oil futures are falling now that Hurricane Dolly looks like it will not hit key oil installations in the U.S. Gulf of Mexico. The recent slide in oil prices has been good news for most airline stocks, which were battered as investors acted like there was no stopping the rise in oil. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.After hitting a one-year high of $37.79 in October, the stock hit a one-year low of $5.91 in July. CAL opened this morning at $13.46. So far today the stock has hit a low of $12.90 and a high of $15.20. As of 12:50, CAL is trading at $13.84, up $0.48 (4.4%). The chart for CAL looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $5 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just five months as long as CAL is above $5 at December expiration. Continental would have to fall by more than 64% before we would start to lose money. Learn more about this type of trade here.
Continue reading Continental Airlines (CAL) lifted by easing oil worries
Closing Bell: Another day, another dollar loss for the Dow
Stupid question: Can the U.S. handle more housing stress?
Serious Money: How safe were BRK, BUD, PG, SO, & UPS?
