J.C. Penney Co. Options Active After Earnings Disappoint
by Option Review - May 16th, 2012 1:58 pm
Today’s tickers: JCP, OSUR & GS
JCP - J.C. Penney Co., Inc. – The department store operator’s shares had their worst percentage drop in more than two decades on Wednesday after the Company reported a loss for the first quarter, sales that fell more than expected and discontinued its quarterly dividend. The stock trades 17.3% lower this afternoon at $27.54. May expiry options changing hands on J.C. Penney this morning appear to be looking for a modest rebound off the lows by the end of the week. Call buyers snapped up more than 500 of the May $28 strike calls for an average premium of $1.00 each and purchased another 1,700 calls at the higher May $29 strike at an average premium of $0.49 apiece. The May $30 and $31 strike calls attracted buyers as well, with more than 3,000 and 1,600 contracts purchased at each, at premiums of $0.31 and $0.13 each, respectively. Meanwhile, strategists betting shares in JCP are at their lowest for the week sold May $27 and $28 strike put options, pocketing average premiums of $2.96 and $0.15 per contract on the trades. Put sellers walk away with the full amount of premium in hand as long as shares in J.C. Penney settle above $28.00 at expiration. Overall activity in JCP options is up sharply following earnings, with more than 138,000 lots in play versus the stock’s 90-day average options volume of 36,354 contracts.
OSUR - OraSure Technologies, Inc. – Shares in the medical equipment maker hoping to bring the first at-home HIV test to market jumped as much as 35.0% to a more than 5-year high of $12.28 today after a unanimous vote yesterday by an advisory panel was viewed favorably by investors. The FDA is expected to make a decision on the test in the next few months. Calls and puts are changing hands in roughly equal numbers this afternoon and overall volume is currently up above 2,200 contracts…
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DiggWhich Way Wednesday – Hurts So Good!
by Phil - May 16th, 2012 8:27 am
Finally – news so bad it's GOOD!
Commercial Real Estate is down 14% in China so far this year with Residential right behind, down 13.5% – all on 11.8% fewer sales than last year. Foreign investment in Chinese properties has dropped 42.9% year to date. China's main banks are not lending any money – due to lack of demand, not supply and 45% of Chinese companies predict a slowdown this year and next. Brazil is right behind China with their own real estate market collapsing and the IMF is racing over to Australia to assess the damage done to their banks by the bursting property bubble and EU property values are also off 20% from their 2007 peaks – even in London and Frankfurt – which were supposed to be "immune" from this nonsense.
Good – let's get it all out in the open finally!
Italian Banks are in turmoil and their Government is considering using troops to protect the Banksters after one was shot last week. There is a run on the Greek Banks with almost $900M withdrawn this month and virtually no liquidity should people want more. Meanwhile, The Institute of International Finance has estimated that the global cost of a Greek exit could hit $1,300,000,000,000. When Argentina defaulted in 2001, foreign debtors lost around 70% of their investments. Is $1.3Tn finally a number that matters?
That's right folks, the Global situation is a complete and utter disaster – which is why we went long on the Russell Futures (/TF) at 775 and Oil Futures (/CL) at $92.50 in Member Chat this morning. Where the Hell else are you going to put your money if not in US Equities? That was my conclusion at 11:54 in yesterday's Chat, when I said to Members:
Nice pop off the EU close – still seems like people are abandoning the sinking ship of state over there and money has nowhere to go but US equities (but TBills and Dollars are getting some love too). With gold, silver, oil and copper all looking weak – where the hell are people supposed to put money?
We noted that there were 16 stocks that were hitting their 2009 panic lows which we were very comfortable moving into in what we're calling our…
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Sabrient Risers – 5/16/2012
by Sabrient - May 16th, 2012 12:00 am
Top 5 Risers |
||||
| Stock | Rating | Analysis | ||
| AIG | BUY | The long term projected growth rate for AIG is rising, and this is happenening at a time when historical earnings have already increased significantly. | ||
| ELX | BUY | An increasingly attractive expected long term growth rate and a significantly higher projected valuation from just a few weeks ago make Emulex a company to watch. | ||
| NCS | BUY | The recent earnings history for NCI Building Systems shows significant improvement while projected valuation continues to rise. | ||
| HLF | STRONGBUY | Herbalife has shown a remarkable increase in projected value recently, with the majority of analysts expecting higher than previously expected earnings. | ||
| ARII | STRONGBUY | American Railcar has shown a remarkable increase in projected value recently, with the majority of analysts expecting higher than previously expected earnings. | ||
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LVS Put Buyers Could Rake In The Chips If Shares Extend Pullback
by Option Review - May 15th, 2012 2:00 pm
Today’s tickers: LVS, AMT & APC
LVS - Las Vegas Sands Corp. – The resort casino operator’s shares, which have had more down days than up during the most recent four week period, caught a break today, trading 1.6% higher on the day at $50.08 as of 11:50 a.m. in New York. It looks like some options traders, perhaps wary the stock’s pullback has not yet run its full course, are taking advantage of today’s rally to establish bearish put positions. Las Vegas Sands shares are down nearly 20.0% off the April 12th three-year high of $62.09. Traders prepared for double-digit declines in the shares from here exchanged 2,100 puts at the Sep. $45 strike this morning, buying most of the contracts for an average premium of $2.96 apiece. Put buyers stand ready to profit should shares in LVS decline another 16.0% to breach the average breakeven price of $42.04 at expiration in four months. Shares in the casino operator last traded below $42.04 in the first week of 2012, before the stock commenced a more than 30.0% run to the upside to the mid-April multi-year high.
AMT - American Tower Corp. – Shares in American Tower Corp., a REIT that owns and operates wireless communications and broadcast towers in the U.S., are up 0.50% at $67.54 this morning on positive analyst comments from Bank of America recommending the stock as a buy. May expiry call buying suggests one or more traders anticipate the price of the underlying will extend gains this week. Options volume is heaviest at the May $67.5 strike where more than 2,000 in-the-money calls changed hands against open interest of 693 contracts. It looks like most of the calls were purchased for an average premium of $0.50 apiece, with profits available to the upside…
Technical Tuesday – 1,360 or Bust on the S&P – Again!
by Phil - May 15th, 2012 7:05 am
Here we go again!
It was only last Tuesday we were watching that 1,360 line on the S&P but, at the time, we were looking for it to hold as we finished last Monday at 1,370 – in a totally fake pump into the close. Even early Tuesday morning, the Futures were being pumped up to reel in the suckers but I warned in the morning post:
There is no particular reason for the move, other than this being Tuesday in a manipulated market. Neither oil ($97.38) or gold ($1,628) or copper ($3.71) or silver ($29.73) or even gasoline ($2.97) give any indication of consumer demand for commodities. "Fixing" the charts does not mean you have fixed the economy!
We all know what happened next – we failed to hold that 1,360 line on the S&P as the Euro failed to hold $1.30 and Greece was unable to form a coalition government (we also had disappointing Retail Sales numbers) and this morning (6:45) oil is $94.74, gold is $1,558, copper is $3.53, silver $28.23 and gasoline is STILL $2.97.
The last thing we should do is complain about gasoline prices – we still pay 1/2 of what Europe does and even China is paying $5.31 a gallon – 25% more than the US average $4.19. At this point, gas prices are the only commodity not falling down and that's because they are the easiest to manipulate – the last bastion of the speculator – if you will.
With that mythical summer driving season on the way, even we stopped shorting oil at $94 and gasoline is now a joke at $2.97 as that's $124.74 per barrel – a 33% per barrel mark-up at retail. At the pump, $4.19 a gallon means you are paying $175.98 at the pump – that's an 87% mark-up! Actually, we shouldn't look at it as 87%, that's misleading – when oil was $60 per barrel, gasoline was $1.85 at the pump and that was $77.70 and the refiners were making very good money. Why would it cost $81.98 to refine and retail a $94 barrel of oil when it only costs $17.70 to refine and retail a $60 barrel of oil? See – it's a rip-off! Somebody, somewhere is massively screwing you over – that much should be obvious to even a Republican Senator.
This 400% increase…
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Sabrient Risers – 5/15/2012
by Sabrient - May 15th, 2012 12:00 am
Top 5 Risers |
||||
| Stock | Rating | Analysis | ||
| AIG | BUY | The long term projected growth rate for AIG is rising, and this is happenening at a time when historical earnings have already increased significantly. | ||
| ELX | BUY | An increasingly attractive expected long term growth rate and a significantly higher projected valuation from just a few weeks ago make Emulex a company to watch. | ||
| HLF | STRONGBUY | Herbalife has shown a remarkable increase in projected value recently, with the majority of analysts expecting higher than previously expected earnings. | ||
| TA | STRONGBUY | TravelCenters of America has shown a remarkable increase in projected value recently, with the majority of analysts expecting higher than previously expected earnings. | ||
| HOG | BUY | Harley-Davidson has shown significant advances in achieving substantial earnings growth recently, and analysts also appear confident these higher earnings will continue to grow in the near future. | ||
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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