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Monday, August 9th, 2010
9:00am (EST)
Shares of Hewlett Packard (HPQ, $46.30, down $0.05) fell 10% in extended trading on Friday as Wall Street and traders dumped the stock after hearing the company’s CEO, Mark Hurd, was stepping down.

The resignation caught everyone off-guard, but what was shocking is that Mr. Hurd resigned in the wake of a sexual harassment probe. The claims against him were already settled on Thursday, the day before the news came out, but it was certainly a blow to the company’s image.
It didn’t end there. The investigation by HP’s head brass found that their boy also fluffed his expense reports and had people on payroll for work they didn’t do.
The company immediately named Chief Financial Officer, Cathie Lesjak, as its temporary CEO and HP said it would look for a permanent replacement. Here’s the kicker though. Despite his “mistakes” and breach of conduct, Mr. Hurd, manage to negotiate a “severance” package that could be worth more than $35 million, including a cash payment of $12 million. Wow.
HP shares are at $43+ in pre-market action.
Earnings for the week:
MONDAY – American Dairy (ADY, $12.88, down $0.23), Assisted Living Concepts (ALC, $31.52, down $1.23), Baltic Trading Limited (BALT, $11.46, up $0.21), Blackboard (BBBB, $37.26, down $0.38), China Automotive Systems (CAAS, $20.66, up $0.86), Clear Channel Outdoor Holdings (CCO, $11.65, up $0.01), Clean Energy Fuels (CLNE, $16.84, down $0.03), Ctrip.com International (CTRP, $42.45, up $0.45), EchoStar (SATS, $20.32, up $0.16) and Tyson Foods (TSN, $17.13, up $0.35).
TUESDAY – Bob Evans Farms (BOBE, $25.72, down $0.19), Fossil (FOSL, $41.6, up $0.15), Learning Tree International (LTRE, $10.82, down $0.13), Neenah Paper, (NP, $18.00, down $0.09), Piedmont Office Realty Trust (PDM, $17.89, down $0.31), STR Holdings (STRI, $24.73, up $0.23) and Sysco (SYY, $30.61, down $0.27).
WEDNESDAY – Advance Auto Parts (AAP, $52.75, down $1.12), Computer Sciences Corporation (CSC, $46.05, down $0.32), Cisco Systems (CSCO, $24.08, down $0.09), Macy’s (M, $19.44, down $0.34) and Pan American Silver (PAAS, $23.79, up $0.04).
THURSDAY – Briggs & Stratton (BGG, $18.08, down $0.68), DeVry (DV, $47.83, down $3.13), Brinker International (EAT, $15.71, down $0.22), Estee Lauder Companies (EL, $63.46, up $0.15), Nordstrom (JWN, $33.96, down $0.16), Kohl’s (KSS, $48.63, down $0.37), Royal Gold (RGLD, $46.76, up $0.92), Red Robin Gourmet Burgers (RRGB, $20.95, down $0.18) and Sara Lee (SLE, $14.84, down $0.17).
FRIDAY - Dillard’s (DDS, $22.13, down $0.57) and J. C. Penney (JCP, $21.81, down $0.31).
Futures are pointing towards a slightly higher open despite the HP news this morning. Dow futures are up 43 points to 10,656 while the S&P 500 futures are higher by 5 points to 1,125. The Nasdaq 100 futures are showing an 8 point advance and are at 1,910.
Tags: call options, Hewlett-Packard, how to trade options, HPQ, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options Posted in Company Commentary, Market Analysis, Market Commentary | Comments Off
Tuesday, November 24th, 2009
9:10am (EST)
The market bounced back in strong fashion yesterday as the bulls snapped a three-day slide and took the Dow to new highs yesterday. The Dow gained 132 points to finish at 10,450 after reaching a high of 10,524. The S&P 500 added 15 points to close at 1,106 while the Nasdaq was higher by 30 points and settled at 2,176.
Hewlett-Packard (HPQ, $51.02, up $0.98) reported earnings Monday after the market closed of $2.4 billion, or $0.99 a share, versus $2.1 billion, or $0.84 a share, in the year-ago period. Excluding one-time items, net income was $1.14 a share which matched Wall Street’s expectations.
Revenue fell 8% to $30.8 billion but was $400,000 ahead of expectations. This was a good sign as we have been saying that we would have to start seeing some revenue growth. The other bit of good news was the HP raised its 2010′s earnings.
The company now expects to earn between $4.25 and $4.35 a share for the year, compared to earlier forecasts between $4.20 and $4.30 a share. Revenue is expected come in at $118-$119 billion, compared to its previous forecast of $117-$118 billion. Wall Street is expecting full-year 2010 earnings of $4.32 a share on revenue of $118.9 billion.
In economic news, third quarter GDP (Gross Domestic Product) increased 2.8%, which in-line with what was widely expected, but down from the 3.5% increase that was posted as part of the advance GDP estimate. Personal consumption was revised downward to reflect a 2.9% increase, which was not as strong as the 3.2% increase that was widely expected.
The futures have been pointing towards a lower open but they have improved since last night. World stock markets fell last night following big gains on Monday, with China’s stock market posting its biggest drop in three months after the country’s central bank warned commercial banks to control their lending.
As we head to press, Dow futures are up a point, S&P 500 futures are up by two while the Nasdaq futures are down a half-point. We may get a lower open this morning but sentiment is improving…
Current subscribers, please check the Members Area for the trade updates.
Tags: Hewlett-Packard, momentum stock option trading, Netflix, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades Posted in Company Commentary, Earnings, Economic News, Market Analysis, Option Trades | Comments Off
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.
Tags: Dell, Hewlett-Packard, momentum stock option trading, Netflix, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades Posted in Company Commentary, Earnings, Market Analysis, Option Trades | Comments Off
Monday, September 22nd, 2008
With a lousy market you can get lousy stock prices. At least that what a few companies are thinking. Although we had an 800 point rally to close the week, there are a few companies who feel like the market has given them the opportunity to buy back shares of their company stock.
Microsoft (MSFT, $26.01, up $0.85) said Monday its board approved a plan to buy back up $40 billion of its shares. The company said it has completed its previous $40 billion stock repurchase program and the new buyback expires in September, 2013. The company also raised its quarterly dividend to $0.13 from $0.11.
Although I don’t actively trade options on Microsoft, I have mentioned that at $25, Microsoft is a good stock trade to ride to $27 or $30.
Hewlett-Packard (HPQ, $47.75, down $0.51) also approved the repurchase of up to $8 billion in shares. The buyback comes on top of a previous $8 billion repurchase program started in November that has about $3 billion remaining. The company has about 2.5 billion shares of common stock outstanding.
And finally, Nike’s (NKE, $63.85, up $0.15) board approved a four-year, $5 billion buyback program. Their repurchase program will begin following the completion of its current $3 billion buyback program. Nike had about 492 million shares of “Class B” stock outstanding.
This is usually a bullish sign for the market when companies come in and buy their stock back. It shows the faith that management has in its stock price. Buybacks lower shares that are available to trade and could help increase earnings because of higher revenues on less shares outstanding.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Hewlett-Packard, Microsoft buybacks, Nike Posted in Company Commentary | No Comments »
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Hewlett Packard in Turmoil
Monday, August 9th, 2010
9:00am (EST)
Shares of Hewlett Packard (HPQ, $46.30, down $0.05) fell 10% in extended trading on Friday as Wall Street and traders dumped the stock after hearing the company’s CEO, Mark Hurd, was stepping down.
The resignation caught everyone off-guard, but what was shocking is that Mr. Hurd resigned in the wake of a sexual harassment probe. The claims against him were already settled on Thursday, the day before the news came out, but it was certainly a blow to the company’s image.
It didn’t end there. The investigation by HP’s head brass found that their boy also fluffed his expense reports and had people on payroll for work they didn’t do.
The company immediately named Chief Financial Officer, Cathie Lesjak, as its temporary CEO and HP said it would look for a permanent replacement. Here’s the kicker though. Despite his “mistakes” and breach of conduct, Mr. Hurd, manage to negotiate a “severance” package that could be worth more than $35 million, including a cash payment of $12 million. Wow.
HP shares are at $43+ in pre-market action.
Earnings for the week:
MONDAY – American Dairy (ADY, $12.88, down $0.23), Assisted Living Concepts (ALC, $31.52, down $1.23), Baltic Trading Limited (BALT, $11.46, up $0.21), Blackboard (BBBB, $37.26, down $0.38), China Automotive Systems (CAAS, $20.66, up $0.86), Clear Channel Outdoor Holdings (CCO, $11.65, up $0.01), Clean Energy Fuels (CLNE, $16.84, down $0.03), Ctrip.com International (CTRP, $42.45, up $0.45), EchoStar (SATS, $20.32, up $0.16) and Tyson Foods (TSN, $17.13, up $0.35).
TUESDAY – Bob Evans Farms (BOBE, $25.72, down $0.19), Fossil (FOSL, $41.6, up $0.15), Learning Tree International (LTRE, $10.82, down $0.13), Neenah Paper, (NP, $18.00, down $0.09), Piedmont Office Realty Trust (PDM, $17.89, down $0.31), STR Holdings (STRI, $24.73, up $0.23) and Sysco (SYY, $30.61, down $0.27).
WEDNESDAY – Advance Auto Parts (AAP, $52.75, down $1.12), Computer Sciences Corporation (CSC, $46.05, down $0.32), Cisco Systems (CSCO, $24.08, down $0.09), Macy’s (M, $19.44, down $0.34) and Pan American Silver (PAAS, $23.79, up $0.04).
THURSDAY – Briggs & Stratton (BGG, $18.08, down $0.68), DeVry (DV, $47.83, down $3.13), Brinker International (EAT, $15.71, down $0.22), Estee Lauder Companies (EL, $63.46, up $0.15), Nordstrom (JWN, $33.96, down $0.16), Kohl’s (KSS, $48.63, down $0.37), Royal Gold (RGLD, $46.76, up $0.92), Red Robin Gourmet Burgers (RRGB, $20.95, down $0.18) and Sara Lee (SLE, $14.84, down $0.17).
FRIDAY - Dillard’s (DDS, $22.13, down $0.57) and J. C. Penney (JCP, $21.81, down $0.31).
Futures are pointing towards a slightly higher open despite the HP news this morning. Dow futures are up 43 points to 10,656 while the S&P 500 futures are higher by 5 points to 1,125. The Nasdaq 100 futures are showing an 8 point advance and are at 1,910.
Tags: call options, Hewlett-Packard, how to trade options, HPQ, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options
Posted in Company Commentary, Market Analysis, Market Commentary | Comments Off