CLE CEO E. Bonnie Schaeffer sold 724,500 shares directly and another 472,526 shares through a foundation on the 7th. I am very concerned when a CEO sells out almost their entire position in a company, even at Christmas… CLE’s stock is up 40% from January after falling off a cliff in Nov ’04 from $26.72, a price it is trading just above.
With a low bar vs. last year’s first quarter, CLE had a 40% rise in net income on 11/17 and the stock is up 10% from when they raised guidance on 11/3. Bonnie made a pretty bland outlook statement on 12/1 and said about Europe: “we are focusing intently on maximizing the value of each transaction to overcome the sluggish retail environment. ” Now I happen to know that Europe is not sluggish this year so I think CLE has other problems.
I don’t think the company’s growth justifies the price and any misstep could cost them dearly. Insider sales are always a warning sign and this one seems justified. I like the Feb $30 put for $2.40 (a .41 premium) as an easy way to take a short position.
There may be support at the 50 dma of $27 so I would happily take a greater than 10% return on this trade and be happy.
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Vyomesh Joshi, EVP of HPQ must be a reader because he dumped 250,00 of his shares on 12/6 so I am looking at this as part of my mounting evidence that today’s analyst meeting will not go that well.
I wish I had noticed BHS CEO, Ian Cockwell’s purchase of $5M worth of his own stock on 12/7-9 (he bought some more yesterday too!) as the stock has flown up the last 3 sessions. There is little news on this small California builder but eps is rising faster than sales so I like it. The stock looks well set to break it’s 50 dma of $51 and rechallenge its high of $56 but I would hope to buy on a fed day pullback.
DPM, which only just went public, had a lot of inside buying as well. The stock is trading at 20% over it’s 12/1 IPO price of $21.50. They are a gas pipline spin-off of COP and DUK and I suppose COP’s purchase of BR will be a big plus for them.
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The gold poker game is now in full swing so I’m going to stay away from all metals until the short game resolves itself. Although I predicted it, I was surprised by the severity of yesterday’s move down in the US market and apparently so were the Asian and Arab markets who look very directionless to down this morning.
This does not change my position on the NEM leap though, the volitility is what makes us money there.
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Let’s hope for a pullback on HAL as the race will soon be on to drill in Kuwait as the country will begin allowing foreign companies in for the first time and guess who happens to be right down the road in Iraq? I’m going to bid $3 for the Jan $65 calls and hope for a drop so I can pick them up before the stock heads to $70.
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Here is my #1 sign that there is a housing bubble in the cities: People are once again willing to move further away to buy affordable homes. If this continues it will lead to many interesting macro changes but we need to watch out for collapsing prices of inner city homes.
http://money.cnn.com/2005/12/12/real_estate/buying_selling/net_gainers_cities/index.htm
This also gives a mini boom to the areas people are moving to but it’s very tricky to nail that down. On the whole, it should benefit the better builders (like BHS) who are on top of those trends and are building in the right places.
The funniest thing about this article is a testament to the flexibility of New Yorkers who’s top moving destinations are none of their suburbs but Miami, Philadelphia and Orlando.
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Abandon ship at MSFT! No one in Japan wants the XBox 360, leaving more than 1/2 of deliveries on the shelves over the weekend – this is unexpected and bad (good for SNE though).
Speaking of ships, the SS GM may be going down to decade lows today as bankruptcy talk resurfaces. I’m not going to beat this dead horse as I am already heavily short on it.
MRK news was wrong yesterday, the jury was actually 9-1 in their favor – pretty much the opposite of what was being reported as the stock plunged $1. Stay away from this though as the new evidence of additional heart attacks is true and, whether included in a report or not, may prove damaging in future court cases.
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The turning your computer into a phone race is up another notch as Gizmo announces .01 per minute calls to any US phone.
http://biz.yahoo.com/bw/051213/20051213005351.html?.v=1
It is now officially cheaper to run you phone than your tap water, next someone will have to figure out how to pay people to make the calls…
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I don’t know if anyone uses these things but SNIC just won a contract to work with the disposable camera supplier to CVS. The company is strong and I have been watching it since it took a dive as it experienced growing pains that analysts were not willing to forgive. The stock looks attractive at $15, especially as you can sell the Jan $17.50s for .45 (3%).
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TASRE will get a pop today as the SEC said it is done poking them and will be taking no action. I told you this was going to happen last week so it may be too later but I recommend very long $5 leaps or just buy the stock, once they file their earnings and get relisted the stock will really take off.
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BRBKA announces earnings today, this is a great indicator of the state of the overall market – the stock is up $1,500 since I picked it in November and has pulled back $2,000 on earnings concerns, especially with the heavy insurance exposure.
At this point I would rather play PALM up than RIMM down. PALM will shoot up like a rocket if RIMM has the injunction placed against them and will still benefit from increased sales margins, even if RIMM eventually settles as any settlement will cost them enough to affect the bottom line. Were this not option expiration week, I would be thinking about this as a TOTD candidate but I love the idea of owning the stock and selling the calls. The Jan $30’s can be sold for $1.95, a whopping 8% on this very profitable company. There is a whole $1.41 cushion before the call is in the money and the $1.95 you collect protects you a full .50 below the 50 and 200 dma!
COP is dropping like a rock and will be a great buy at some point but certainly not today! This BR deal will not be seen as good for them until we have at least 2 years of nat gas above $10.
BBY blew it big time with very bad numbers. Although retail sales in general look like they are disappointing for November, this is a Best Buy problem and not a reflection of the electronics industry in general.
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Now we know why SIRI had such a drop yesterday – BofA just cut them to a sell from neutral. Interesting time to flip flop… They had very bad reasons for the drop, including a prediction of increased churn and 100,000 less subscribers than they had projected (3.2M).
At the same time they say XMSR is a buy so we can guess that this report leaked yesterday and most of the drop is already in. I give them until 12:45 today to be proven wrong but I will not be adding to my holdings until the dust clears.
Aside from the fact that BofA has the consistently worst analyst calls of all the majors, they have always had the lowest target on the stock, $2.50 under the street mean of $8.50. This call may be a bit of sour grapes as the stock rises away from them.
