MOST NOTEWORTHY: Cleveland Cliffs, Synthesis Energy and Bookham Tech were today's noteworthy initiations:
KeyBanc believes the pullback in Cleveland Cliffs (NYSE: CLF) shares is an attractive entry point given acceleration of North American Iron Ore pellet contract pricing and increased pellet production into 2009. Shares were assumed with a Buy rating and $180 target.
Stanford believes the Synthesis Energy's (NASDAQ: SYMX) U-GAS technology offers several advantages, including the ability to use waste/low grade coal and operational cost savings and intitiated shares with a Buy rating and $12 target.
Morgan Keegan started Bookham Tech (NASDAQ: BKHM) with an Outperform rating and said the company continues to benefit from a expanding customer base, timing of new product introductions, and new products.
OTHER INITIATIONS:
Arris (NASDAQ: ARRS), Garmin (NASDAQ: GRMN) and Harmonic (NASDAQ: HLIT) were initiated at RBC Capital with Sector Perform ratings.
Citigroup assumed Delphi Financial (NYSE: DFG) with a Hold rating and $23 target.
VanceInfo (NYSE: VIT) was initiated with an Outperform rating and $12 target at Oppenheimer.
You would think that companies making standalone GPS devices would be making bank right now. The devices that never let you get lost when driving are important to many travelers, especially when you don't want to fumble with maps, let alone get lost and waste a bunch of expensive gas getting back on track. Garmin Ltd. (NASDAQ: GRMN), one of the leading GPS makers, though, has seen tough times recently. Its shares have declined 56% recently. Why I'm not sure. I do know that it has nothing to do with Apple, Inc. (NASDAQ: AAPL)'s iPhone that's about to be released in a few weeks.
Apple's new 3G iPhone will have embedded GPS, which will make the gadget all the more useful. Regardless, though, will consumers be using their iPhones as replacements for full GPS devices in all those vehicles? Unless there is a decent vehicle mount kit available, it's hard to believe so. The iPhone does have the best chance at displacing more units from Garmin and other GPS makers like TomTom in the car navigation arena, but the entire GPS experience is what some folks probably forget about.
If you've ever used a GPS navigation program installed on a normal cellphone or smartphone, does it works seamlessly like a standalone product? Can you take and make calls while the GPS continues working in the background, giving you all those voice directions? What makes standalone GPS devices so valuable is that they work even when we're multitasking with phone calls. That's the kicker: the first time you miss a direction by voice because you're busy chatting on the phone, a GPS solution on top of a cellphone -- at least for driving purposes -- would become useless to the average consumer. I doubt Apple's upcoming solution will be this drab, but I continue to see a bright future for standalone GPS device manufacturers (although profits will continue to dwindle). Apple, as always, is not the only game in town. It will still be big for non-driving GPS uses, though.
After hitting a one-year high of $9.70 last June, the stock hit a one-year low of $4.95 in March. This morning, F opened at $5.07. So far today the stock has hit a low of $4.94 and a high of $5.16. As of 12:30, F is trading at $5.03, down $0.22 (-4.2%). The chart for F looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $6 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. For this particular trade, we will make a 9.9% return in three months as long as F is below $6 at September expiration. Ford would have to rise by more than 20% before we would start to lose money. Learn more about this type of trade here.
Garmin (NASDAQ: GRMN) is recently trading up $1.60 to $54.47.
Oppenheimer says: "There is a chance GRMN will elect to only slightly tweak 2008 revenue estimates on its next conference call, which would be a positive."
GRMN July call option implied volatility is at 47, puts are at 54; below its 26-week average of 58 according to Track Data, suggesting decreasing price movement. GRMN puts are more expensive than calls because GRMN is difficult to borrow.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
After hitting a one-year high of $125.68 in October, the stock fell to make its one-year low of $39.75 in April. This morning, GRMN opened at $49.32. So far today the stock has hit a low of $48.17 and a high of $49.33. As of 1:30, GRMN is trading at $48.68, down 1.34 (-2.68%). The chart for GRMN looks neutral but improving while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating
For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $70 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. For this particular trade, we will make a 6.4% return in five months as long as GRMN is below $70 at October expiration. Garmin would have to rise by more than 34% before we would start to lose money. Learn more about this type of trade here.
GRMN hasn't been above $70 since January and has shown resistance around $55 recently. This trade could be risky if the company's earnings (due out in late July or early August) are a positive surprise, but even if that happens, this position could be protected by resistance GRMN might find around $62 where it formed a top back in March. 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 GRMN.
Gas Crunch Hits Home The record-high price of gasoline is putting a strain on American motorists - and spurring some to shift their habits. Here are their stories. America's Money: Gas crunch hits home - CNNMoney.com
12 Ways to Make Your House a Cash Cow Want to earn some extra cash? Turn your home into a money-making machine. As times get tighter, many are looking for ways to save. Here are offbeat ways to bring in cash without leaving home. These include take in renters, have yard sales, throw party sales or share your garage. 12 ways to make your house a cash cow - Bankrate.com
While researching GPS maker Garmin Ltd (NASDAQ: GRMN) -- whose stock has lost two-thirds of its value in the last six months -- I can't help but pity those long-term shareholders who reject trend following and technical analysis in favor of investing for the long term. To them, it seemed like only yesterday that GPS was one of the hottest technologies around and this industry leader could do no wrong.
Well, that's usually the time to sell, just as I posted on Apple Inc (NASDAQ: AAPL) in January this year and on Google Inc (NASDAQ: GOOG) in November last year, both before they each dropped 40% in just a few months. Because the truth is these popular technology stocks are all expectations. We're not talking Berkshire Hathaway (NYSE: BRK.A)-type value investing here.
Sure, GPS is still hot, somewhat, but due to intense competition, margins have been evaporating, forcing analysts to lower their earnings estimates. In their latest quarter, Garmin further strengthened the bear case with spiking inventories and accounts receivable. None of that looks to change anytime soon, and even though it's got a P/E of 10, book value is all the way down near $11 per share!
Merrill Lynch downgraded Garmin (NASDAQ:GRMN) to "neutral" from "buy" according toBriefing.com. The news service also reports that Oppenheimer downgraded First Solar (NASDAQ:FSLR) to "perform" from "out perform."
Jefferies & Co reaffirmed its "buy" rating on Las Vegas Sands (NYSE:LVS) after the company posted earnings according to the AP.
Douglas A. McIntyre is an editor at 247wallst.com.
If you thought the news going to be the actual FOMC cut was the key today, it wasn't. The bias and tone for more rate cuts was the most important, and the tone was not hawkish enough. Traders wanted to see a signal of the end of rate cuts, at least for now, so that oil and gold would tank and that the dollar would recover.
GDP came out and showed a +0.6% gain, meaning the official recession isn't technically here yet. Warren Buffett said it is, and he might be good enough of a judge over anyone. Regardless, this is the first positive month for the S&P after it just missed a positive month in March.
Below are the unofficial closing levels for key US index levels:
Buffalo Wild Wings (NASDAQ: BWLD) was upgraded by KeyBanc Capital Markets to Buy and by Cowen & Co. to Outperform. Yesterday, Buffalo Wild Wings reported strong quarter results with a 22% revenue boost and earnings meeting street expectations. Shares were up 18% to $30.74 in the final minutes of the day.
Next week is sure to be filled with fun and volatile market conditions. The highlight will be the Fed decision on key rates, due on Wednesday, April 30, following a two-day meeting. Anytime the Fed has the floor, the markets listen. Tuesday and Wednesday will be filled with speculation up until the time of the announcement of a cut or pause.
There are many possible outcomes for this meeting, as we have seen a substantial change in investor sentiment regarding the potential need for further rate cuts. The buzz on the street is for a cut of 25 basis points and then a wait-and-see attitude from there. I think that is the most likely direction.
There has been a great deal of concern that all the recent rate cuts have not provided the benefit to consumers the economy needs. Clearly, there is a fatty clog within our financial circulatory system. Traditionally, the Fed likes to see how its actions trickle into the economy before it continues too far down one path, which would argue for a pause now. Plus, the Fed does not want to run out of ammunition by cutting rates too far too fast. But there is no question that we are dealing with a more aggressive Fed than we have seen in decades, so I think we will see another small rate cut.
After hitting a one-year high of $125.68 in October, the stock hit a one-year low of $42.01 in April. This morning, GRMN opened at $44.89. So far today the stock has hit a low of $43.72 and a high of $44.90. As of 2:05, GRMN is trading at $43.65, down $1.46 (-3.2%). The chart for GRMN looks bearish and steady, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.
For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $60 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. For this particular trade, we will make a 4.2% return in two months as long as GRMN is below $60 at June expiration. Garmin would have to rise by more than 37% before we would start to lose money. Learn more about this type of trade here.
MOST NOTEWORTHY: Garmin, Thomson Reuters and Heritage-Crystal Clean were today's noteworthy initiations:
Garmin (NASDAQ: GRMN) was initiated with a Neutral rating at JP Morgan. The firm sees risk to 2008 Street estimates given the consumer slowdown in the U.S. and potential ASP and margin pressure as channel inventory is worked down.
Morgan Stanley assumed Thomson Reuters (NASDAQ: TRIN) with an Underweight rating and expects revenue growth in the company's financial business to slow sharply into 2009.
William Blair believes Heritage-Crystal Clean (NASDAQ: HCCI) has the opportunity to gain market share over the next several years as a result of its differentiated parts-cleaning programs, strong sales organization, and experienced management team. Shares were assumed with an Outperform rating.
OTHER INITIATIONS:
Lehman initiated Dell (NASDAQ: DELL) and Sun Microsystems (NASDAQ: JAVA) with Equal Weight ratings and targets of $20 and $17 and Apple (NASDAQ: AAPL), IBM Corp (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ) with Overweight ratings and targets of $195, $144 and $59, respectively.
Pacific Growth started Spectranetics (NASDAQ: SPNC) with a Neutral rating.
Merrill reinstated Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM) and Hess Corp (NYSE: HES) with Buy ratings and price targets of $110, $105 and $125, respectively.
MOST NOTEWORTHY: Diana Shipping, Avanex and Fushi International were today's noteworthy initiations:
Stephens believes Diana Shipping's (NYSE: DSX) current share price represents an attractive entry point for investors. Shares were started with an Overweight rating and $40 target.
Avanex (NASDAQ: AVNX) was initiated with a Buy rating at Merriman. The firm believes the recovery in optical that began in late 2005 is in a relatively early stage and that new product introductions and strong optical trends will drive growth and leverage.
Jefferies assumed coverage of Fushi International (NASDAQ: FSIN) with a Buy rating and $20 target and believes the telecom infrastructure build-out in emerging markets, particularly China, and high copper prices continue to create opportunities for the company.
OTHER INITIATIONS:
Mattel (NYSE: MAT) was assumed at Caris with an Above Average rating and $25 target.
Lehman initiated Garmin (NASDAQ: GRMN) with an Equal Weight rating.
Keefe Bruyette initiated Invesco (NYSE: IVZ) with an Outperform ratin gand $28 target.
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MOST NOTEWORTHY: Cleveland Cliffs, Synthesis Energy and Bookham Tech were today's noteworthy initiations:
You would think that companies making standalone GPS devices would be making bank right now. The devices that never let you get lost when driving are important to many travelers, especially when you don't want to fumble with maps, let alone get lost and waste a bunch of expensive gas getting back on track. 
Garmin
While researching GPS maker 
Here are some highlights from this past week's 
Next week is sure to be filled with fun and volatile market conditions. The highlight will be the Fed decision on key rates, due on Wednesday, April 30, following a two-day meeting. Anytime the Fed has the floor, the markets listen. Tuesday and Wednesday will be filled with speculation up until the time of the announcement of a cut or pause..gif){kind=logo}
Comfort Zone Investing: Exploit volatility with constant dollar investing
Merck earnings preview: No miracles expected
Apple reports Monday -- buy AAPL before earnings?
