Wang’s Happy Trading

Posted by Optiondragon for myhappytrading.com

From briefing.com

Periodicals Wrap-Up for Tuesday, October 21st
WALL STREET JOURNAL: If banks use the government’s $250B rescue plan as a means to make acquisitions it would not boost the economy as would new bank lending–the plans intent–according to the Wall Street Journal. John Allison, CEO of BB&T Corp. (BBT), for one, says, he’ll “probably participate” in the government capital infusions and will use some of that funding to make acquisitions…FINANCIAL TIMES: The Financial Times reported that Standard Life has indicated it may be willing to raise its stakes in both Royal Bank of Scotland (RBS) and HBOS (HBOOY) after they agreed to a GBP41.5B capital injection from the government…IBD: In a fragmented industry, Cash America International (CSH) owns 3% to 5% of all U.S. pawnshops, making it the industry leader, according to Investor’s Business Daily’s “The New America”. In these economic times pawnshops do very well although challenges remain. Analysts expect growth for Cash, which recently paid $90M for 80% of Prenda Facil, a Mexican pawnshop chain, to slow to single digits over the next year, and profit is expected to grow about 11% next year to $3.45 a share…NEW YORK TIMES: The New York Times reports that NBC Universal’s Universal Studios, a unit of General Electric (GE), is in advanced talks to sell Rogue Pictures, an independent film unit, to Relativity Media, a private production and financing company. The New York Times reported that the sale would include more than 30 projects in development in addition to about 25 library titles…

Margin calls and forced stock sales to continue - Barron’s Online
Executives with margin accounts have been pressured to sell big stakes of their companies’ shares. The problem could continue. Large insider sales have taken place as many executives due to margin calls, have had to sell off chunks of their stock. And as surprising as some of these sales were, there’s potential for more of them. At least 80 companies have insiders that have pledged stock as collateral for loans, according to a recent report by InsiderScore.com. Companies with a sizeable percentage of outstanding shares pledged as collateral include Danaher (DHR), Fossil (FOSL), Pulte Homes (PHM), Oracle (ORCL) and Campbell Soup (CPB). Two weeks ago, such market pressure forced Chesapeake Energy (CHK) Chairman and Chief Executive Officer Aubrey McClendon to nearly liquidate his 5.5% stake, for $570M in the natural gas exploration company. Forced sales have long-term implications for companies, in addition to any selling pressure the margin calls create. Further stock weakness could still trigger sales elsewhere.

Asian Markets Wrap-Up for Tuesday, October 21
Stocks in a majority of Asian countries rallied, as investors speculated that governments would take more action to spur economic growth. JAPAN: The Nikkei 225 Stock Average advanced 3.34%, to 9,306.25. Honda (HMC) surged 6.8%, and Toyota (TM) climbed 5%. Inpex, an oil explorer, jumped 9.6%. A number of real estate companies rallied, with Mitsubishi Estate (MITEY) rising 9.2%, Mitsui Fudosan (MTSFF) adding 6%, and Nomura Real Estate (NMR) gaining 15%. CHINA: Stocks declined slightly, on worries about slowing economic growth in the country. The CSI 300 Index slumped 0.81% to 1,881.41. Pudong Bank declined 3.6%, and Shenzhen Development Bank dropped 2.2%. China Vanke (CVKEF), a real estate developer, sank 2.4%. Steel maker Baoshan Iron & Steel lost 2.1% and Beijing Yanjing Brewery slumped 3.3%. AROUND ASIA: Taiwan’s Taiex Index added 0.22%, while South Korea’s KRX 100 lost 0.97% and Australia’s S&P/ASX 200 Index surged 3.87%…Toyota sold more vehicles in China than General Motors (GM) in the first nine months of the year, according to Bloomberg.

Macau’s revenue flow slows-WSJ
The credit crisis and new travel restrictions are affecting growth at the casinos at China Macau region, according to the Wall Street Journal. In September, for the first time in over two years, gross casino gaming revenue was down 0.8% to $880M. Even so, casino revenue there has nearly tripled to a $10.3B a year since 2002. Long term casino operators expect growth to continue. Beijing has clamped down on visitors from the mainland who cannot now use the same visa to visit Macau and Hong Kong. Compounding the overall problem is that companies are having trouble borrowing to develop new projects.

U.S. equity futures continue to point to a lower open
Stock futures are pointing to a lower open as corporate earnings take center stage. Some of the larger S&P 500 companies are due to report this week and investors will be looking closely at the forward guidance the companies provide. Caterpillar (CAT) reported less than expected earnings this morning, saying that they wouldn’t provide guidance until they reported their year end results. Pfizer (PFE) reported earnings which were better than expected and said they expect to meet analysts full year earnings forecasts. 3M (MMM) reported better than expected earnings as well, and lowered their forecast for the full year’s earnings.

Slowing Chinese growth affects many other countries-WSJ
Chinese growth is sharply down. While the government announced an “active” macro policy it will take time to fully take effect and boost domestic demand. Meanwhile, China’s third quarter economic growth was 9% year-to-year, the slowest since the second quarter of 2003. That may just be the beginning. Reduced demand from abroad will only add to the slowing growth, according to the Wall Street Journal’s “Heard on the Street”.

Analysts Upgrade Summary for Tuesday, October 21st
MOST NOTEWORTHY: Borg-Warner (BWA), Kroger (KR) and AMAG Pharmaceuticals (AMAG) were today’s noteworthy upgrades: JP Morgan lowered its 2009 North American light vehicle production estimate by 13% to 11.2M and Europe by 10% to 19M. The firm upgraded Borg-Warner to Overweight from Neutral citing balance sheet and revenue growth. Jefferies upgraded shares of Kroger to Buy from Hold and raised its target to $32 from $28 as they expect the company’s value image to benefit in the current environment. Leerink upgraded AMAG Pharma to Outperform from Market Perform on valuation as they believe current data is sufficient for some form of first cycle approval of Ferumoxytol…OTHER UPGRADES: Coca-Cola Enterprises (CCE) was upgraded to Neutral from Underperform at Merrill Lynch. Watsco (WSO) was raised to Perform from Underperform at Oppenheimer. UBS upgraded Invitrogen (IVGN) to Buy from Neutral.

Analysts Downgrade Summary for Tuesday, October 21st
MOST NOTEWORTHY: Whole Foods (WFMI), Texas Instruments (TXN) and the Dry Bulk Shipping sector were today’s noteworthy downgrades: Jefferies downgraded shares of Whole Foods to Underperform from Buy and lowered its target to $9.50 from $23 on the worsening macro environment, which they believe is “overwhelming” the company’s ability to drive even flat comps in Q4 and FY09. Deutsche Bank cut Texas Instruments to Hold from Buy and lowered its target to $19 from $28 following the company’s worse-than-expected outlook, as they expect shares to be range bound. Banc of America downgraded the Dry Bulk Shipping sector to Equal Weight from Overweight to reflect the “depressed” charter rate environment, tighter credit markets and the weakening macroeconomic outlook. The firm downgraded Britannia Bulk (DWT), Navios Maritime (NM) and TBS International (TBSI) to Neutral from Buy…OTHER DOWNGRADES: Eaton (ETN) was lowered to Underperform from Neutral at Merrill Lynch. AXA (AXA) was downgraded at JP Morgan to Neutral from Overweight. Aracrus (ARA) was downgraded to Underweight from Equal Weight at Morgan Stanley.

Analysts Initiation Summary for Tuesday, October 21st
MOST NOTEWORTHY: PharMerica (PMC), Time Warner Cable (TWC) and HMS Holdings (HMSY) were today’s noteworthy initiations: PharMerica was initiated at Oppenheimer with an Outperform rating and $28 target. The firm believes the Street is underestimating the benefit from the company’s consolidation efforts. Banc of America named Time Warner Cable their favorite stock in Cable given its economic resilience, key business health and valuation. Shares were assumed with a Buy rating and $30 target. William Blair believes HMS Holdings has favorable end markets and a strong competitive position. The firm initiated shares with an Outperform rating…OTHER INITIATIONS: UBS initiated Zumiez (ZUMZ) and Ann Taylor (ANN) with Neutral ratings and a $12 target and $16 target, respectively. Universal American (UAM) was assumed at BMO Capital with a Market Perform rating and $14 target. New Generation Biofuels (NGBF) was initiated with a Hold rating at Jesup & Lamont.

Will Microsoft target Research in Motion?-BusinessWeek
Research in Motion’s (RIMM) share price is down again and since June it’s lost 60% of its value. Is the company ripe for a takeover? Canaccord Adams analyst Peter Misek thinks Microsoft (MSFT) could be interested if the price continues to fall. Is that likely? It’s a possibility even if the company’s sales are strong through the holiday season. But for now it’s just speculation.

Fertilzer stock price targets lowered at Merrill
Merrill lowered price targets on the following names: POT target to $80 from $100, AGU to $32 from $50, TRA to $20 from $22, and MOS to $50 from $60.

Research in Motion-RIMM is poised to beat expectations, says JMP Securities
After attending the Blackberry Development Conference, JMP Securities thinks that the company’s new products will enable it to surpass expectations. The firm maintained their Outperform rating and $80 target

AMAG Pharmaceuticals-AMAG upgraded to Outperform from Market Perform at Leerink
Leerink upgraded shares on valuation as they believe current data is sufficient for some form of first cycle approval of Ferumoxytol.

Jim Cramer’s “Mad Money”
Cramer said that despite the market’s 413-point rally Monday, he’s still taking things one day a time. Cramer says a bit of positive news that the market is near a bottom was Excelon’s (EXC) bid to purchase NRG Energy (NRG), at a 37% premium from Friday’s close. Cramer said the Excelon-NRG bid tells us two things. First, companies are starting to see value in their rivals, and second, “when you get a bid, you say ‘yes!’” Then, Cramer then added three new CEO’s to his “Wall of Shame” list of the worst executives. They included Straus Zelnick, of Take Two (TTWO), Oleg Khaykin, of International Rectifier (IRF), and John Lauer, of Diebold (DBD), all of who rejected gracious takeover bids only to watch their stock price plummet afterward. Cramer talked with Linn Energy (LINE) chair/CEO Michael Linn, to find out why shares of Linn Energy have been hit especially hard since his Oct. 2 recommendation of the company. Linn confirmed that the failed Lehman Brothers was the company’s largest shareholder, and that when the brokerage collapsed, large blocks of Linn stock were liquidated at record speeds. While the failure took its toll on the share price, Linn said, it did not affect the company’s operations, and all of its hedged production was re-hedged with other banks. Cramer called Linn a broken stock, but not a broken company. He likes Linn as a capital preservation stock, with its $100M buyback and its high-yielding dividend. Then, with oil plummeting from $147 to just $75 a barrel, Cramer continued his hunt for stocks that benefit from falling crude prices. Cramer said he would be a buyer of medical supply company Becton Dickinson, which not only benefits from lower oil prices, but also shines bright in a weakening economy as 35% to 40% of Becton’s sales are derived from highly recession-proof items. Cramer said BDX is cheap, and could fetch as much at $89 a share, or a 23% premium. He called the company a sister stock of his other favorite oil play Kimberly Clark (KMB). MAD MAIL: on Psychiatric Solutions (PSYS), Cramer said he foresees too many rocky quarters for the company before a new bill recently passed in Congress takes effect. Quanta Services (PWR), Cramer still likes the stock. LIGHTNING ROUND: (Bullish) JOYG; MCD; AAPL. (Bearish) EXP; ACI; SHW.

Fast Money position recap: First Moves- Joe likes long GLD, Tim likes long VIP, Karen likes a lil bit of COH, Pete likes PFE long. Finerman Owns (GS), (MRK), (JNJ); Finerman’s Firm Owns (MSFT); Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (USO), (BBT), (COF), (IWM); Finerman’s Firm Owns (OIH) Puts; Finerman’s Firm Owns (NKE) Calls; Seymour Owns (AAPL); Seymour Owns (CCJ); Seymour Owns (MER); Seygem Asset Management Owns (FXI), (VIP); Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (ADM) And (ADM) Call Spread; Najarian Owns (EMC) And Is Short (EMC) Calls; Najarian Owns (FCX) And Is Short (FCX) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) Calls And Is Short (MSFT) Puts; Najarian Owns (SNDK) And Is Short (SNDK) Calls; Najarian Owns (BNI); Najarian Owns (TSO) Calls And Is Short (TSO) Puts; Terranova Owns (AAPL), (EXM), (FCX), (FTO), (MA), (NOV), (POT), (X), (VLO); Terranova Owns Dec. Crude Oil; Terranova Owns Dec. Gold.