Last week, I had a chance to talk to Rémy de Tonnac, who is the CEO of INSIDE Contactless. He was certainly upbeat. After all, his firm recently snagged an investment from Samsung Ventures America. In fact, some of the other investors include biggies like Nokia Growth Partners and Motorola Ventures.
Although, it's been a long journey. That is, INSIDE has been building its platform – which allows for contactless microprocessors – over the past ten years. But yes, things are starting to pay off.
INSIDE is focused on the so-called near field communications (NFC), which is a standard for mobile systems. Essentially, the technology helps facilitate mobile payments – which is likely to be a huge market.
However, for this to happen, Rémy believes that NFC must leverage innovation on the handset. For example, suppose you use your phone to pay for subway rides. So, wouldn't it be cool to receive an SMS message if your pass was about to expire?
Or, suppose you get an alert about a favorite band that will be in town next week. Perhaps you can get a video preview and, of course, buy some tickets?
"NFC can do things in a better way," said Rémy. "More importantly, it can also allow for new things – creating real value for consumers."
Oil briefly rose to a record $139.89 per barrel Monday before pulling back after a fire cut North Sea output, Bloomberg News reported Monday.
Oil traded briefly at $139.89 -- an all-time high -- before pulling back to trade up $1.73 to $136.60 per barrel in Monday afternoon trading.
An field off Norway's coast was shut down after a fire broke out Sunday. StatoilHydro ASA's 150,000 barrel-per-day Oseberg oil and gas field off Norway's coast accounts for about 5% of Norway's output.
The other major energy commodities also rallied Monday at midday on the news. Heating oil jumped about 7 cents to $3.90 per gallon, unleaded gasoline added about 3 cents to $3.49 per gallon, and natural gas climbed 29 cents to $12.91 per million BTUs. Oil market: Dueling arguments
Energy trader Jim Dietz told BloggingStocks Monday the oil market is "in a battle to define reality" between the oil bulls and bears.
Guess? Inc. (NYSE: GES) designs, markets, distributes and licenses a trendy, upscale collection of contemporary apparel, accessories and related consumer products. The company operates 391 retail stores in the United States and Canada and 607 retail stores outside of North America, of which 63 are directly owned. It also distributes products through department and specialty stores around the world. Competitors include Gap Inc. (NYSE GPS) and Abercrombie & Fitch (NYSE: ANF).
Guess? surprised investors last week, when it reported Q1 EPS of 51 cents and revenues of $489.2 million. Analysts had been looking for 46 cents and $451.6 million. The CEO noted that international expansion continued to yield strong results. Management also guided Q2 EPS to 47-49 cents (47 cent consensus), Q2 revenues to $455-$465 million ($456.27M consensus), FY09 EPS to $2.40-$2.48 ($2.44 consensus) and FY09 revenues to $2.03-$2.08 billion ($2.05B consensus). Brean Murray subsequently remarked that the firm's projections remained conservative on a number of levels. Wedbush Morgan reiterated its "buy" recommendation on the shares.
MOST NOTEWORTHY: Abercrombie & Fitch, China Unicom and Toronto Dominion were today's noteworthy downgrades:
Friedman Billings downgraded Abercrombie & Fitch (NYSE: ANF) to Market Perform from Outperform citing soft comps which could impact EPS expectations in 2H08 and SG&A investing.
China Unicom (NYSE: CHU) was downgraded to Neutral from Outperform at Credit Suisse and to Equal Weight from Overweight at Morgan Stanley as the company's phone asset sales garnered a lower-than-expected price.
RBC Capital downgraded Toronto Dominion (NYSE: TD) to Sector Perform from Outperform citing expense initiatives in domestic retail banking which are hurting operating leverage, loan losses in U.S. banking, and muted capital markets revenues.
OTHER DOWNGRADES:
William Blair cut Littelfuse (NASDAQ: LFUS) to Market Perform from Outperform.
Linear Tech (NASDAQ: LLTC) was downgraded at UBS to Neutral from Buy.
Abiomed (NASDAQ: ABMD) was lowered to Neutral from Positive at Susquehanna.
Abercrombie & Fitch (NYSE: ANF) shares have been slipping some of late. Recent insider selling is also flashing a warning for this stock. Over the past three months, insiders have sold $59.0 miilion worth of ANF stock. Insider selling has slowed its pace over the past few months, but it is still happening. A filing released on Saturday indicated that a director at the company sold 7800 shares of ANF, valued at over $500,000. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ANF.
After hitting a one-year high of $85.77 in October, the stock hit a one-year low of $66.05 in January. This morning, ANF opened at $72.72. So far today the stock has hit a low of $70.50 and a high of $72.72. As of 12:25, ANF is trading at $70.70, down $1.90 (-2.6%). The chart for ANF looks bullish but deteriorating, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.
For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $85 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 6.4% return in three months as long as ANF is below $80 at August expiration. ANF would have to rise by more than 21% before we would start to lose money.
ANF hasn't been above $85 by more than a few cents at all in the past year and has shown resistance around $78 recently. This trade could be risky if the company's earnings (due out in on 8/15) are a positive surprise, but even if that happens, this position could be protected by resistance ANF might find at its 200 day moving average, which is currently around $77.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ANF.
I know, I know, with the economy sputtering, why would you ever want to be invested in an apparel company that produces expensive jeans? Let alone have it recommended by a typically short-selling trader like me! But before I tell you the name of this stock that despite the obvious economic problems -- strong oil, weak housing and the dollar, mounting foreclosure, etc -- is sitting right near all-time highs, looking to break out, let's do a quick rundown of its competitors in the apparel retail space.
Selling Off the Core Business It was quite a surprise to some this week to hear that GE is looking to sell their signature product line --appliances. But, they aren't the first company to move away from their early roots. Here are some companies that decided to cut their roots-the products that fed their early growth to delve into other areas. Companies have mixed results when they stray from their original visions, sometimes stumbling to adjust and others morphing into better creations. Among the companies are IBM which sold off their PC unit, Corning and Corningware, Kodak and 35MM Film, Goodrich and tires and more. Selling off the core business - BusinessWeek In the News: GE Confirms It Is Considering Strategic Options for Its Appliance Unit
U.S. stock futures were higher this morning, looking to extend their rally, even though investors will likely not like the upcoming housing data, which probably isn't going to signal a bottom for the housing recession.
U.S. stocks had a nice rally Thursday as oil prices fell, several deals were announced, mainly CBS buying CNet, and Icahn moving forward with his proxy fight for Yahoo's board. The Dow industrials rose 94 points, or 0.73%, the S&P 500 added 14 points, or 1.06%, and the Nasdaq Composite rose 37 points, or 1.48%. Thursday marked the fourth day of gains for the Nasdaq.
This morning, investors will be waiting for the housing data to roll in. Housing starts and building permits figures for April will be reported at 8:30 a.m. EDT. Both are expected to show further declines. Also at 10:00 a.m. EDT, May University of Michigan's consumer confidence gauge for May is due. Economists expect it to decline marginally.
Meanwhile, Goldman Sachs helped lift oil prices this morning after it raised its forecast for oil to $141 a barrel. The forecast was raised 32% from $107 a barrel and is for the second half of 2008. Oil prices were back above $125 a barrel.
The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.
Analysts surveyed by Thomson Financial expect earnings growth, compared to the same period in the previous year, from Urban Outfitters (NASDAQ: URBN) to be 22.7% to 22 cents per share, from Wal-Mart Stores (NYSE: WMT) to be 9.3% to 75 cents per share, and from TJX Companies (NYSE: TJX) to be 7.5% to 40 cents per share.
Analysts expect earnings declines from the previous year from JC Penney (NYSE: JCP) by 52.9% to 49 cents per share, from Kohl's (NYSE: KSS) by 34.4% to 42 cents per share, and from Nordstrom (NYSE: JWN) by 18.3% to 49 cents per share.
In the case of Abercrombie & Fitch (NYSE: ANF), analysts expect earnings to remain flat, year over year, at 65 cents per share.
And then there's Macy's (NYSE: M), which is expected to swing to a loss of 2 cents per share, compared to a profit of 16 cents a year ago.
The sample size may be too small to define any significant trends, but the numbers do suggest that analysts expect profit declines to be deeper than profit growth, and that consumers may be more likely, given the current state of the economy, to buy clothes at Wal-Mart or TJ Maxx than at Nordstrom or Abercrombie.
The coming results will reveal if those expectations are correct.
Who can forget the advertising campaign a number of years back that threw social watch dogs into fits over Abercrombie & Fitch (NYSE: ANF). That particular advertising foray employed the lithe bodies of teen and preteen boys and girls in a way which, while certainly drawing attention, underscored today's excessive use of underage sexuality in advertising. Parent groups and child protective agencies were enraged, as well they might be. However, a recent ad campaign launched by Beyonce and her House of Dereon, clothes for girls, makes Abercrombie's misadventures look about as harmless as a day at the zoo.
A blog post presented by our sister blog Styledash, reveals the shocking truth about the clothing ad campaign, which is the brainchild of Beyonce and her mother, Tina Knowles. Blogger Kristen Seymour espouses the danger in this type of advertising by describing the presentation in the terms of "Go on, baby, and earn your lunch money the old-fashioned way."
The gallery provided by Styledash is self-explanatory and might serve to turn the stomachs of little girl's parents everywhere. Certainly, Beyonce and her advertising agency have accomplished what they wanted to. We can also believe that Abercrombie & Fitch shall benefit slightly with a parallel focus to its own questionable advertising strategy. However, we need only to remember the enigmatic fate of JonBenet Ramsey to realize down which road this type of advertising strategy may lead.
(Thanks to Styledash for the tip, Additional thanks to Gawker)
Day one of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Management Advisory Committees meeting: Purdue Pharma's NDA for Oxycontin.
Anadarko Petroleum (NYSE:APC) to report Q1 earnings; conference call Tuesday at 10:00am.
Tuesday, May 6
Day two of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Mgmt Advisory Committees meeting: Cephalon's (NASDAQ:CEPH) sNDA for Fentora.
Molson Coors (NYSE:TAP) to report Q1 earnings; conference call at 12:00pm.
Corn Products International (NYSE: CPO) manufactures and markets food ingredients and industrial products derived from corn and other starch-based materials. Major offerings include sweeteners, corn oil, salad dressings, shortening, vitamins, corn gluten feed, food-grade starches and industrial starches. The firm operates manufacturing plants in the Americas, Africa and Asia, serving customers in the food, beverage, pharmaceutical, paper, textile, and brewing industries. Archer Daniels Midland (NYSE: ADM) is a major competitor.
Investors were pleased last week, when the company reported fiscal Q1 EPS of 85 cents and revenues of $930.9 million. Analysts had been looking for 71 cents and $867.9 million. Net sales set a record, for the ninth consecutive quarter. The firm also guided FY08 EPS to $2.90-$3.10 ($2.87 consensus) and FY08 revenues to $4.0 billion ($3.78 billion consensus).
After hitting a one-year high of $85.77 in October, the stock hit a one-year low of $66.05 in January. ANF opened this morning at $75.02. So far today the stock has hit a low of $73.96 and a high of $76.32. As of 12:10, ANF is trading at $74.75, up 24 cents(0.3%). The chart for ANF looks bearish and steady, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.
For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $65 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just three weeks as long as ANF is above $65 at May expiration. Abercrombie would have to fall by more than 13% before we would start to lose money. Learn more about this type of trade here.
ANF hasn't been below $66 at all in the past year and has shown support around $70 recently. This trade could be risky if the company's earnings (due out on 5/16) disappoint, but even if that happens, this position could be protected by the support the stock might find around $70, where it has bottomed out four times in the past six months.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in ANF.
MOST NOTEWORTHY: Abercrombie & Fitch, ENGlobal Corp and Wausau Paper were today's noteworthy initiations:
Morgan Keegan initiated Abercrombie & Fitch (NYSE:ANF) with a Market Perform citing lack of comp momentum and the outlook for consumer spending.
Jesup & Lamont expects ENGlobal's (NASDAQ:ENG) earnings momentum to remain in place due to sustained demand for energy products. Shares were initiated with a Buy rating and $13.25 target.
Soleil expects Wausau Paper (NASDAQ:WPP) shares to be driven by its value-added market focus, product innovation and improved mix. Shares were assumed with a Buy rating.
OTHER INITIATIONS:
Citigroup assumed coverage of XM Satellite Radio (NASDAQ:XMSR) with a Hold rating from Buy, and a $12.25 target from $17. The firm also assumed Sirius Satellite (NASDAQ:SIRI) with a Buy rating and $8 target from $4.25.
Morgan Stanley initiated MarkWest Energy (NYSE:MWE) with an Overweight rating.
Soleil initiated Potash (NYSE:POT) with a Hold rating.
The euro climbed to a record-high $1.6020 versus the dollar Tuesday, after the European Central Bank signaled that they'll increase interest rates -- despite slowing growth -- if inflation accelerates, Bloomberg News reported.
The euro rose about 1.5 cents to $1.6020 versus the dollar before paring some gains to trade around $1.5985 in Tuesday afternoon trading. The Euro also rose about four-tenths of a pence against the British pound to 80.20 pence.
Dollar falls, again
Meanwhile, the dollar retreated across the board, falling about 1.5 cents to $1.9950 versus the British pound and about one-half yen to 102.95 versus Japan's yen. Independent currency trader Andrew Resnick told BloggingStocks Tuesday that traders responded to the ECB's announcement by doing what you'd expect: they bought the euro.
"The only thing holding back the euro was the possibility the ECB would cut rates. The fundamentals have been in the euro's favor for several years. The market had priced-in a possible rate cut by the ECB, but when ECB comments came in today the market quickly bid up the euro," Resnick said. He added that he is presently long with the euro against the dollar.
Last week, I had a chance to talk to Rémy de Tonnac, who is the CEO of INSIDE Contactless. He was certainly upbeat. After all, his firm recently snagged an investment from Samsung Ventures America. In fact, some of the other investors include biggies like Nokia Growth Partners and Motorola Ventures.
Oil briefly rose to a record $139.89 per barrel Monday before pulling back after a fire cut North Sea output, 
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I know, I know, with the economy sputtering, why would you ever want to be invested in an apparel company that produces expensive jeans? Let alone have it recommended by a typically 
U.S. stock futures were higher this morning, looking to extend their rally, even though investors will likely not like the upcoming housing data, which probably isn't going to signal a bottom for the housing recession. 
The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.
Who can forget the advertising campaign a number of years back that threw social watch dogs into fits over .gif){kind=logo}
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