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Posts Tagged ‘Dell’

Hewlett-Packard Reports After The Close

Monday, November 23rd, 2009

12:45pm (EST)

The market is off to a strong start this week and we called it right in the Weekly Wrap last night.  Futures were pointing toward a big day and the Dow is currently up 132 points to 10,450.  All 30 Dow stocks are showing a gain and the index has traded as high as 10,495 this morning.

The S&P 500 is back over 1,110 and is up 16 points to 1,107.  The Nasdaq is up 30 to 2,176.

Hewlett-Packard (HPQ, $50.82, up $0.78) is set to report earnings after the closing bell today.  The stock is approaching its 52-week high of $51.43 which was set last week and there is a ton of action in the option pits.

Wall Street expects HP to report earnings of $1.13/ share on revenue of $30.4 billion for the quarter.  There are 30 analysts that cover the stock and the high estimate is $1.14 while the low estimate is $1.09.  This means there is a lot of room for upside price movement should the company beat expectations.

After the number Dell (DELL, $14.67, up $0.38) posted there could also be the surprise of an earnings miss.  We don’t think that is the case as we actually feel HP has been taking Dell’s lunch money.  The options look cheap for us to play a possible move to $55 should the stock get some legs to where we might make a double.

Current Subscribers, check the Members Area NOW for the new trade in HP.

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Checking In

Friday, August 28th, 2009

2:00pm (EST)

The Dow is struggling after starting off the morning in the green.  Intel (INTC, $20.25, up $0.78) got the ball rolling after the company raised  its sales forecast for the current quarter from $8.9 billion to $9.2 billion and Dell (DELL, $16.08, up $0.43) came in with better-than-expected earnings.  However, all the major indexes are now lower as the Dow has fallen 65 points and is currently trading at 9,515.  The Nasdaq has slipped 6 points to 2,021 while the S&P 500 is down 5 to 1,025.

We added the Citigroup (C, $5.20, up $0.15) call options this morning and there are a few other names I like and don’t like.

As far as specific stocks, make sure you close the AIG (AIG, $49.81, up $1.97) call options today.  The stock hit a high of $55.90 this morning which represented the perfect opportunity to sell the September 35 calls (IKGII, $15.80, up $1.70) which printed $21.00 today.  Incredible.  I’ve got another strangle option trade in the works for Sunday night and AIG has proven the kind returns that can made with strangles

DryShips (DRYS, $6.05, down $0.19) couldn’t carry the momentum from yesterday so there was no day trade.

I’ll be back Sunday night with the updates.

Rick@MomentumOptionsTrading.com

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Dell Falls On Weak Outlook

Wednesday, September 17th, 2008

The market is taking no prisoners and continues to spread like “a blob” through all sectors. Gold, Energy, Financial, Housing and Tech stocks continue to get sucked up into the market’s downward pressure and the only question now is how low can we go?

Dell (DELL, $15.98, down $2.01) once again warned about “”further softening” in technology spending and its stock promptly fell over 10% on Tuesday. It seems like another “cry wolf” cliche but we already knew that Dell was suffering. For investment relations, Dell has to tell it like it is and it’s a shame I didn’t recommend buying puts after the company reported a lousy quarter three weeks ago.

At the time, the company reported a 17% drop in earnings after lowering prices and taking some restructuring charges. Lowering prices made sense to a degree but not when you have to mortgage the ranch. Dell lowered prices in an attempt to gain market share but the weak global economy is keeping customers on hold.

Dell is also in a costly battle with other big names in the industry for shelf space at retailers. Although this is new territory for the company, Dell has done well in this area but what made them so good was their ability to ship PC’s direct which helped transform the industry. Now it looks as though Dell is playing catch-up to the Hewlett-Packard’s (HPQ, $48.41, up $3.08) of the world.

Dell hit a new 52-week low of $15.68 before closing slightly higher. The September 17 puts (DLYUR, $1.21, up $1.09) were the lottery play of the day on Monday before the market closed. They were up a staggering 900% as Dell opened at $16 to start the trading session. Better days are ahead for the market (and Dell…I think) but not right now.

Rick Rouse
Rick@OptionsMentoring.com

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Dell Disappoints

Thursday, August 28th, 2008

It doesn’t look like Dell (DELL, $25.21, down $0.42) is going to have a good Friday. After the bell, the company reported a 17% drop in earnings after lowering prices and taking some restructuring charges for the quarter.

Dell earned $616 million, or $0.31 a share, versus $746 million, or $0.32 a share, in the year ago quarter. Wall Street had forecast a profit of $0.36. Although sales grew over 10% to $16.4 billion (Wall Street expected $15.9 billion) the lower prices for their computers cut into earnings.

The company has done a great job of growing its business in retail stores and the price cuts helped Dell gain a bigger piece of the market share pie. Its laptop shipments grew 44% year-over-year the company reported.

However, Wall Street is taking the stock out to the woodshed in after-hours trading as shares are down nearly $2. The stock could recover a little bit but there’s a good possibility Dell will open Friday’s session lower than today’s closing price. There was whispers that the company would report a blowout quarter but today’s news is another example on why you shouldn’t play earnings with options.

Rick Rouse
Rick@OptionsMentoring.com

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Trader Comments:

    LAWRENCE O.
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    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

    TERENCE
    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”