Today was another relief trading day on word that Congress has reached a tentative approval of a bipartisan $700 billion financial bailout package. It definitely wasn't from the slew of bad economic data this morning. That was just ugly. Despite poor economic data, bond yields rose as the bailout package will end the flight to quality we witnessed lately.
Below are today's unofficial closing bell levels: DJIA 11,022.06 +196.89 +1.82% NASDAQ 2,186.57 +30.89 +1.43% S&P500 1,209.18 +23.31 +1.97% 10YR T-Note 3.862% +0.091% 52-week lows Top Analyst Calls
American International Group (NYSE: AIG) was up most of the day, but ex-Chairman Hank Greenberg filed to sell shares in the open market because of personal liquidity issues. Shares were up 19% but had fallen all the way down to almost 10% at $2.97 on this news. So much for him putting together a hostile rescue package of his own.
Boston Scientific (NYSE: BSX) was up almost 3% at $12.96 right before the close after it received marketing approval from the FDA for its TAXUS Express2 Atom Paclitaxel-Eluting Coronary Stent System this morning. This stock is so far down from prior highs that any good news is welcome.
General Electric Co. (NYSE: GE) managed to gain 4% to $25.60 right before the close despite its earnings warning hitting the stock early today. This was already factored in and should have been anticipated. It is keeping its AAA debt rating, keeping its dividend, and suspending buybacks to preserve liquidity.
Northwest Airlines Corporation (NYSE: NWA) and soon to be parent Delta Air Lines (NYSE: DAL) approved their merger today with something around 98% to 99% of the votes combined in favor of the deal. Unfortunately it had no bearing on the stocks, as Northwest shares were actually down 1% at the close.
AngioDynamics (NASDAQ: ANGO) provides medical devices used by interventional radiologists and surgeons for the minimally invasive treatment of cancer and peripheral vascular disease. The firm's oncology product line includes image-guided radiofrequency ablation devices, used to kill cancer cells by heating and destroying them. The peripheral vascular line includes a variety of instruments to clear and drain non-cardiac arteries. The company's products are sold in more than thirty countries. Competitors include Johnson & Johnson (NYSE: JNJ) and Boston Scientific (NYSE: BSX).
The firm pleased investors late last month, when it reported fiscal Q4 EPS of 41 cents and revenues of $46.8 million. Analysts had been looking for 17 cents and $45.6 million. Management also guided FY09 EPS to 68 cents (64 cent consensus) and FY09 revenues to $205-$210 million ($201.32M consensus).
St. Jude Medical (NYSE: STJ) designs, manufactures, and distributes medical devices for heart-related and neurological conditions. The firm's Cardiac Rhythm Management segment makes pacemakers and implantable cardioverter defibrillators, to regulate heart rhythm. The Neuromodulation unit develops pacemaker-like implantable systems to treat chronic, intractable pain, and other nervous system disorders. The Cardiovascular division offers therapies and technologies for treating people with cardiovascular and peripheral vascular disease. The Atrial Fibrillation segment develops products to diagnose, treat, and seek a cure for atrial fibrillation. Boston Scientific (NYSE: BSX) is a major competitor.
The company pleased investors last week, when it reported Q2 EPS of 60 cents and revenues of $1.14 billion. Analysts had been expecting 55 cents and $1.06 billion. The CEO noted that revenue exceeded guidance in every business category. Management also guided Q3 EPS to 56-58 cents (53 cent consensus) and FY08 EPS to $2.28-$2.33 ($2.19 consensus).
Merit Medical Systems (NASDAQ: MMSI) develops and manufactures proprietary disposable medical devices used in interventional and diagnostic procedures, particularly in cardiology and radiology. Offerings include the catheters, guide wires, inflation devices, needles, and tubing used in heart stent procedures, pacemaker placements, and angioplasties. As well, Merit makes products for endoscopy, dialysis, and other therapeutic and diagnostic procedures. Boston Scientific (NYSE: BSX) and Johnson & Johnson (NYSE: JNJ) are major competitors.
The firm pleased investors last week, when it guided Q2 EPS to 19-21 cents and Q2 revenues to about $57.4 million. Analysts had been expecting 16 cents and $55.77 million. Gross margins for the quarter were estimated at 42.7%, which would be a 500 basis point improvement from Q2'07. CL King subsequently upgraded the shares to "accumulate".
Abbott Laboratories (NYSE: ABT) got approval for its new drug-coated stent. The products are used to open clogged arteries, often in the place of by-pass surgery. The field has been dominated by deeply troubled medical device company Boston Scientific (NYSE: BSX). It looks that the weakened company is in for much more pain.
According toThe Wall Street Journal, ABT "received regulatory approval for its Xience V drug-coated stent, which is expected to be the top seller in the roughly $2 billion U.S. market because it appears to be more effective than rival devices." Boston Scientific will sell the new Abbott product, but with 40% of the revenue going to its rival, it is hard to see how that is a good deal.
BSX has been beaten by competition at almost every turn. It took on tremendous debt when it bought medical device company Guidant. It faced trouble when some Guidant products hit quality control issues. Boston Scientific stents came under criticism a year ago, when medical research questioned how effective they were.
BSX traded at almost $45 in 2004. It is now at about $12. With new competition and a bad balance sheet, that is not likely to change much.
Douglas A. McIntyre is an editor at 247wallst.com.
Stock Picks for Under $10 There are a lot of once-highflying stocks that have fallen below $10 and look like bargains ripe for the picking. See if CIT Group, Ford, Motorola, Tenet Healthcare, Dynegy and Interpublic. Stock Picks for Under $10 - CNBC 10 Worst Managed Companies in America With the trading year almost half over and results from the first quarter out, 24/7 Wall St. presents its latest installment of its Ten Worst Managed Companies In America list. They include Sun Microsystems, Sears, Boston Scientific, Starbucks, Sprint, Circuit City, Motorola, AMD, AIG and Pfizer. 24/7 Wall St.: The 24/7 Wall St. Ten Worst Managed Companies In America
After hitting a one-year high of $16.67 last June, the stock hit a one-year low of $10.76 in January. BSX opened this morning at $13.20. So far today the stock has hit a low of $13.16 and a high of $13.56. As of 12:45, BSX is trading at $13.36, up$ 0.25 (1.9%). The chart for BSX looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $10 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 an 8.7% return in just six months as long as BSX is above $10 at November expiration. BSX would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.
Medtronic (NYSE: MDT) is a medical technology company, specializing in a variety of implantable biomedical devices. Leading products include pacemakers, stents, catheters, glucose monitoring systems and insulin pumps. The firm's Cardiac Surgery segment offers products for the repair and replacement of heart valves, surgical accessories, and surgical ablation products. A Physio-Control unit provides external defibrillation and emergency response systems. Medtronic sells its products to hospitals, clinics, third party healthcare providers and governmental healthcare programs. Boston Scientific (NYSE: BSX) and Johnson & Johnson (NYSE: JNJ) are major competitors.
Investors were pleased last week, when Medtronic announced fiscal Q4 EPS of 78 cents and revenues of $3.86 billion. Analysts had been expecting 72 cents and $3.72 billion. Management also guided FY09 EPS to $2.94-$3.02 ($2.96 consensus) and FY09 revenues to $15-$15.5 billion ($15.14 consensus). UBS subsequently reiterated its "buy" rating on the shares.
Cognex Corporation (NASDAQ: CGNX) provides machine vision computer systems that automate a range of manufacturing processes. Essentially, the systems link to video cameras and serve as eyes where human vision is insufficient. The firm's Modular Vision Systems automate the manufacture of discrete items (e.g: semiconductor chips) by locating, identifying, inspecting and measuring them during the manufacturing process. Its Surface Inspection Systems monitor the surfaces of materials processed in a continuous fashion (e.g: paper, metal, plastic) for imperfections. Cognex has offices throughout North America, Japan, Europe, Asia and Latin America. Boston Scientific (NYSE: BSX), Ford Motor (NYSE: F) and Sony (NYSE: SNE) are customers.
Cognex pleased investors earlier in the week, when it reported Q1 EPS of 20 cents and revenues of $60.5 million. Analysts had been looking for 17 cents and $59.9 million. Management also guided Q2 EPS to 20-24 cents (20 cent consensus) and Q2 revenues to $65-$68 million ($63.14 million consensus). The firm expects gross margin to remain in the low-70% range.
5 Stocks Insiders Love If corporate managers and directors are buying their company's stock, maybe you should, too. They include Boston Scientific, Hanesbrands, Dow Chemical, McMoRan Exploration and Synaptics. Five Stocks Insiders Love - Kiplinger.com
Best Blue Chips for This Market The best way to boost your long-term returns is to buy when prices are cheap - and here are 5 excellent bargains -- 3M, DuPont, General Electric, Hewlett-Packard and Burlington Northern Santa Fe. The best blue chips for this market - CNNMoney.com
After hitting a one-year low of $49.58 in July, the stock hit a one-year high of $61.09 in January. ABT opened this morning at $53.81. So far today the stock has hit a low of $53.62 and a high of $55.40. As of 1:00, ABT is trading at $55.07, up $2.00 (3.8%). The chart for ABT looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $47.50 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 4.2% return in just 7 weeks as long as ABT is above $47.50 at May expiration. Abbott would have to fall by more than 13% before we would start to lose money. Learn more about this type of trade here.
ABT hasn't been below $49 at all in the past year and has shown support around $51 recently. This trade could be risky if the company's earnings (due out in mid to late May) disappoint, but even if that happens, this position could be protected by the support the stock might find around $50, where it has bottomed out quite a few times in the past two year. Brent Archer is an options analyst and writer at Investors Observer.
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 ABT or BSX.
Some believe the current financial crisis is the most serious since the Great Depression and if so some of the largest companies in the country could be taken over and cease to be independent public corporations. Huge firms with vulnerable businesses, competitive pressures, and weak balance sheets may end up being takeover targets. Here is 24/7 Wall St.'s predictions of possible takeovers that could happen in the near future if the current crisis persists. They include McDonald's buying Wendys, VW acquiring Ford Motor, Wal-Mart getting Sears, Wells Fargo buying out Washington Mutual, J&J nabbing Boston Scientific and more.
LifeCell Corporation (NASDAQ: LIFC) provides surgeons with regenerative and reconstructive tissue matrices for soft tissue repair. Products include AlloDerm, for plastic reconstructive, general surgical, burn and periodontal procedures; Strattice, for plastic reconstructive and general surgical procedures; Graftjacket, for orthopedic applications and lower extremity wounds; Allocraft, for bone grafting procedures; and Repliform, for urogynecologic surgical procedures. The materials are sold in the US and abroad, through a direct sales force and through such distributors as Boston Scientific (NYSE: BSX).
The company pleased investors last week, when it reported Q4 EPS of 19 cents and revenues of $52.6 million. Analysts had been expecting 17 cents and $52.2 million. Management also guided FY08 EPS to $0.98-$1.06 ($1.04 consensus) and FY08 revenues to $233-$243 million ($238.89M consensus). Needham subsequently upgraded the issue to "strong buy" and boosted its price target to $55.
Today was another relief trading day on word that Congress has reached a tentative approval of a bipartisan $700 billion financial bailout package. It definitely wasn't from the slew of bad economic data this morning. That was just ugly. Despite poor economic data, bond yields rose as the bailout package will end the flight to quality we witnessed lately.
Stock picks and pans for troubled times: AAPL, COST, EWBC, IBM, YUM, PG ...
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