Victor Schiller
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Companies start to believe their own PR hype. Investors push a stock past logical limits. A company seems about to break down or break out. These are just a few things that can signal a stock with attitude. And... that attitude can be good or bad for the stock price, since attitude always catches up with reality. At least on Wall Street, that is.

As of 10:50 AM XM Satellite Radio (NASDAQ:XMSR) is up $1.74 (12.43%) to $15.72 extremely high volume. The stock hit a high of 16.36 earlier today. Investors are snapping of the stock on the announcement that the company has struck a deal to combine with Sirius Satellite (NASDAQ:SIRI). Investors seem less than concerned about the fact that Federal regulators warned that combining rivals Sirius Satellite and XM Satellite Radio will be a tough process, since there's already a provision barring both satellite radio licenses from being owned by the same company.

XM Satellite has been caught in a tight trading range between about $14 and $16 for a while and the technicals for the stock have been negative. This morning S&P upgraded XMSR from a 2 STAR (out of 5) sell rating to a 3 STAR hold rating. "Merger announcement with Sirius" was stated as the reason for the upgrade. Out of the 20 other analysts who cover the stock, nine give it a strong buy, two a moderate buy, and nine give the stock a hold. No moderate sell or strong sell ratings could be a plus for the stock.

XM Satellite's stock hit a high of $24.21 on April 7, 2006 then dropped to a low of $9.63 on July 27, 2006. The stock is now about 35% below its 52-week high. Could this merger be enough to push the stock back up past its previous high?

The combination of XMSR and SIRI probably looks good on paper, but can it get past considerable regulatory hurdles? This could drag on for quite some time as the FCC has little incentive to move quickly. The prospect of combining the services offered by both companies could be an added challenge. It is yet to be seen how this deal affects Howard Stern's legendary deal with SIRI. To top it off, if this deal is put together, investors may discover the satellite radio may not have the expected market size. Why else would these two companies combine? If the market is as big as they would have us believe there would be more than enough satellite subscribers to go around.

For a neutral to bearish hedged play on XMSR, I would consider an April bear-call credit spread above the $17.50 level. Expect the stock to drift down as the realities of this potential merger start to see the light of day.

Vic Schiller is an analyst with attitude at Investors Observer. DISCLOSURE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

J. C. Penney (NYSE:JCP) opened today at $83.44. So far, the stock has hit a low of $83.12 and a high of $83.76. As of 9:56 this morning, JCP was trading at $83.57, up $0.23 (0.28%) on moderate volume.

The company announced a new ad campaign they call "Every Day Matters" yesterday. This is part of an effort to raise the image of the store, which many consumers associate with older, less affluent buyers. The plan is to appeal to more "aspirational" consumers who are younger and have higher incomes.

After hitting a one year low of $55.51on February 13, 2006 the stock hit a high of $85.68 on February 7, 2007. S&P lowered the stock from a 3 STAR (out of 5) hold rating to a 2 STAR sell rating with a 12-month price target of $77. S&P stated "Lower sales and margin growth assumptions" as the reasons for the downgrade. The technicals for JCP have been generally positive but on the decline lately.

For a bearish hedged play on J.C. Penney, I would consider a March bear-call credit spread above the $90 level. Be careful with this one though since the company is scheduled to report earnings February 22.

Vic Schiller is an analyst on the move at Investors Observer (Free Subscription). DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Electronic Data Systems (NYSE:EDS) opened today at $28.27. So far, the stock has hit a low of $28.17 and a high of $28.39. As of 10:13 this morning, EDS was trading at $28.34, up $0.07 (0.25%) on extremely heavy volume.

After hitting a one year low of $22.42 on July 18, 2006, the stock snaked up 26.7% to a 52-week high of $28.40 yesterday at 2:59 in the afternoon. Electronic Data Systems reported earnings last week and investors seem to like the direction the company is headed. The technicals for EDS have been strongly improving lately and S&P gives the company a 4 STAR (out of 5) buy rating with a current 12-Month target price of $32.

For a neutral hedged play on EDS, I would consider a June covered call at the $27.50 level. There is even a small dividend on the stock with a 0.7% annual yield.

Vic Schiller is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Companies start to believe their own PR hype. Investors push a stock past logical limits. A company seems about to break down or break out. These are just a few things that can signal a stock with attitude. And... that attitude can be good or bad for the stock price, since attitude always catches up with reality. At least on Wall Street, that is.

Intel Corp. (NASDAQ:INTC) was down $0.23 (-1.09%) to close at $20.80 on lighter than average average daily volume. In a generally down market, Investors were not willing to bid INTC up even though there was a report that the chip-making giant said it has successfully produced a chip -- the size of a fingernail -- capable of processing a mind-boggling 1 trillion calculations per second. The chip, which Intel claims is the fastest ever made, could start being used commercially "in five years, if not sooner," Intel Chief Technology Officer Justin Rattner says. I guess five years may not be fast enough for some people playing the stock.

Intel has been on a shallow uptrend since last summer, and the technicals for the stock have been improving lately. INTC has a solid S&P 4 STAR (out of 5) buy rating with a 12-month price target of $25. Out of the 27 other analysts who cover the stock, thirteen give it a strong buy, four a moderate buy, nine hold and one gives it a moderate sell. Analysts seem think this is a good stock to own.

Intel's stock went on a steady but subdued rise from a low of $16.75 on June 13, 2006 up 34.3% to a high of 22.50 on November 17, 2006. The stock is now about 7.6% below its 52-week high. Could this new innovative chip design be just the thing to help the stock climb for the next few years?

Other technology companies like Advanced Micro Devices (NYSE:AMD), International Business Machines (NYSE:IBM), Sun Microsystems (NASDAQ:SUNW), Hitachi Ltd. (NYSE:HIT), Hansen Natural (NASDAQ:TXN) and Applied Materials (NASDAQ:AMAT) will probably need to play catch-up for a while to match Intel's latest chip advancement. A potentially expensive prospect in this extremely competitive landscape. Even AMD's recent new technology announcement may not be enough to counter this news from Intel.

For a neutral hedged play on INTC, I would consider a July covered call at the $20 level. There is even a dividend on the stock with a 2.1% annual yield.

Vic Schiller is an analyst with attitude at Investors Observer. DISCLOSURE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Time Warner (NYSE:TWX) opened today at $21.24. So far, the stock has hit a low of $21.22 and a high of $21.46. As of 12:30 PM, TWX was trading at $21.33, up $0.05 (0.23%) on lower than average volume.

After hitting a one-year low of $15.70 on July 17, 2006, the stock made a sprint for a high of $23.15 on January 10, 2007.

Time-Warner's CEO, Richard Parsons, did a Q&A late last week where he stated that the company wants to be everywhere and shared some of his concerns about digital piracy of entertainment content. Mr. Parsons boiled the company's strategy down to, "What we try to do with all of our businesses . . . is to create quality content and then make sure that there's a way to move that content to consumers on every conceivable platform."

On the piracy issue he said, "I think China is a worst-case scenario right now, where estimates are 95-plus percent of the intellectual property is pirated. That trails down to this country, where maybe somewhere between 10 and 15 percent of content is consumed contrary to the rights of the intellectual property holder."

Being everywhere and being in Asian markets with high piracy rates may cause some challenges for Time-Warner, but management seems to be aware of the issues and that vastly raises the probability that the company will be able to effectively address those challenges. Time will tell...

Last week a major analyst reiterated his overweight rating. The technicals for TWX have weak lately but S&P gives the company a cautious 3 STAR (out of 5) hold rating with a current 12-Month target price of $24.

For a conservative hedged play on Time-Warner, I would consider a July covered call at the $22.50 level. The stock even offers a dividend that pays 1% per year.

Vic Schiller is an analyst at Investors Observer. DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Activision Inc. (NASDAQ:ATVI) opened today at $16.56. So far, the stock has hit a low of $16.39 and a high of $16.59. As of 9:49 this morning, ATVI was trading at $16.43, down $0.01 (0.06%) on light to moderate volume.

After hitting a one year low of $10.47 on July 11, 2006, the stock worked its way up to a high of $18.79 on January 17, 2007. Investors were hopeful that the stock would see some up action yesterday on a report that the video game publisher raised its outlooks for the fourth quarter and 2007. The stock fell $0.40 (-2.38%) to $16.44 in regular trading yesterday. The technicals for ATVI are weak but S&P gives the company a 4 STAR (out of 5) buy rating with a current 12-Month target price of $20.

For a short term bearish hedged play on Activision, I would consider a March bear-call credit spread above the $17.50 level.

Vic Schiller is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Broadcom (NASDAQ:BRCM) opened today at $35.02. So far, the stock has hit a low of $34.90 and a high of $35.55. As of 9:55 this morning, BRCM was trading at $35.17, up $1.50 (4.46%) on extremely heavy volume.

After hitting a one year high of $50.00 on March 3, 2006, the stock plummeted down to a low of $21.98 on July 26, 2006. The company reported earnings last night and said fourth-quarter profits plunged 76% on charges related to how it previously accounted for stock options grants. The technicals for BRCM have weak but improving lately and S&P just upgraded the company from a 2 STAR (out of 5) sell rating to a 3 STAR hold because of "Valuation and reduced risks".

For a bearish hedged play on Broadcom, I would consider a March bear-call credit spread above the $37.50 level.

Vic Schiller is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Also check out some other earnings reports that we're following, and let us know what you're expecting.

Tribune (NYSE:TRB) opened today at $30.92. So far, the stock has hit a low of $30.71 and a high of $31.05. As of 9:59 this morning, TRB was trading at $30.93, up $0.01 (0.03%) on extremely heavy volume.

After hitting a one year low of $27.09 on April 6, 2006, the stock worked its way up to a high of $34.28 on October 26, 2006. Tribune reported earnings yesterday all seemed positive as the company rode cost controls and non-operating gains to an 81 percent rise in fourth-quarter profits but said advertising, circulation and total revenues all declined excluding the benefit of an extra week in the period.The technicals for TRB have been improving lately and S&P gives the company a cautious 3 STAR (out of 5) hold rating with a current 12-Month target price of $34.

For a neutral to bullish hedged play on Tribune, I would consider an August covered call at the $30 level. There may even be a chance to pick up some of this stocks 2.3% annual dividend.

Vic Schiller is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Check out some other earnings reports that we're following, and let us know what you're expecting.

Companies start to believe their own PR hype. Investors push a stock past logical limits. A company seems about to break down or break out. These are just a few things that can signal a stock with attitude. And... that attitude can be good or bad for the stock price, since attitude always catches up with reality. At least on Wall Street, that is.

PepsiCo Inc. (NYSE:PEP) was down $1.19 (-1.84%) to close at $63.31 on three-times average daily volume. Investors pounded the stock because analysts were concerned about higher costs for raw materials such as orange juice, corn, cooking oil and sugar; and over recent declines for its Gatorade and Tropicana products. All this, even though the company's earnings' report was in line with Wall Street's expectations. Pepsi has been on a nice uptrend for the last year and the technicals for the stock have been positive. PEP has a solid S&P 4 STAR (out of 5) buy rating with a 12-month price target of $72. Out of the 12 other analysts who cover the stock, eight give it a strong buy, three a moderate buy, and one gives it a hold. Analysts seem positive on the stock.

Pepsi's stock went on a steady rise from a low of $56.51 on April 24, 2006 up 16.8% to a high of $65.99 on September 27, 2006. The stock is now about 4% below its 52-week high. Could today's sell-off just be temporary?

Other companies in the beverage/snack space like Coca-Cola Co. (NYSE:KO), Coca-Cola Enterprises (NYSE:CCE), Hansen Natural (NASDAQ:HANS) and Jones Soda (NASDAQ:JSDA) may also be vulnerable to the same cost issues that could hurt Pepsi.

For a neutral hedged play on PEP, I would consider a July covered call at the $62.50 level. There is even a small dividend on the stock with a 1.9% annual yield.

Vic Schiller is an analyst with attitude at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

For a bearish hedged play on Google, I would consider a March bear-call credit spread above the $560 level. We are past the company's earnings report so no earnings related surprises should be expected.

Vic Schiller is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.