After hitting a one-year high of $57.34 in October, the stock hit a one-year low of $32.84 in January. TIF opened this morning at $45.91. So far today the stock has hit a low of $45.29 and a high of $48.95. As of 12:00, TIF is trading at $48.00, up 2.15 (4.7%). The chart for TIF looks bullish 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 an August bull-put credit spread below the $35 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 three months as long as TIF is above $35 at August expiration. Tiffany would have to fall by more than 27% before we would start to lose money. Learn more about this type of trade here.
TIF hasn't been below $35 except for a couple days in the past year and has shown support around $41 recently. This trade could be risky if the US economy tanks some more in the coming months, but even if that happens, that position could be protected by support the stock might find just around $36, where it bottomed out in March.
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 TIF.
MOST NOTEWORTHY: Spirit Aerosystems, Genpact and SEI Investments were today's noteworthy initiations:
Friedman Billings believes Spirit Aerosystems (NYSE: SPR) is well-positioned on key aircraft platforms and has significant revenue visibility. The firm started shares with an Outperform rating and $33 target.
Baird is positive on Genpact's (NYSE: G) recurring, non-discretionary revenue, strong growth in Global Client revenue, market leading position; shares were assumed with an Outperform rating and $16 target.
SEI Investments (NASDAQ: SEIC) was initiated with a Market Perform rating and $27 target at Keefe Bruyette, as they are cautious in the near-term due to industry headwinds.
MOST NOTEWORTHY: Bed Bath & Beyond, DSW Inc and Oplink Comm were today's noteworthy downgrades:
JP Morgan downgraded Bed Bath & Beyond (NASDAQ: BBBY) to Underweight from Neutral citing recent sales commentary from competitors and the difficult macro environment.
Oppenheimer cut DSW Inc (NYSE: DSW) to Perform from Outperform following the company's Q1 miss and lower than expected guidance, as they see little visibility in the coming quarters.
Piper downgraded shares of Oplink Communications (NASDAQ: OPLK) to Sell from Neutral following the company's negative earnings preannouncement and lowered their target to $9.00 from $14.
OTHER DOWNGRADES:
Tiffany (NYSE: TIF) was downgraded to Sell from Neutral at Merrill.
Tiffany & Co. (NYSE: TIF) is engaged in the design, manufacture, and retailing of fine jewelry, timepieces, sterling silverware, china, crystal, stationery, fragrances and personal accessories. The firm sells its goods exclusively through some 150 stores worldwide, a Web site and catalogs.
The company pleased investors earlier in the week, when it reported Q4 EPS of $1.27 and revenues of $1.05 billion. Analysts had been expecting $1.21 and $1.05 billion. Management also guided FY09 EPS to $2.75-$2.85 ($2.49 consensus) and FY09 revenues to about $3.23 billion ($3.18B consensus). Cowan and JMP Securities subsequently issued favorable comments about the company and Trian Fund Management revealed it had boosted its stake in the stock from 7.9% (1/16) to 8.44%.
eBay believes that it is Tiffany's responsibility to police the site for infringement of its trademarks, and the company's policy is that it will respond to claims by companies flagging possibly counterfeit merchandise. But eBay itself does not devote substantial resources to policing for counterfeiters. Rolex and Louis Vuitton have sued eBay on similar grounds.
According to the Wall Street Journal, "Tiffany argues that eBay knew it had a problem with counterfeit items being listed on its Web site and did little to clean it up."
In the "risk factors" section of its latest 10-K, eBay touches on the Tiffany lawsuit, saying that "Litigation and negative publicity has increased as our websites gain prominence in markets outside of the U.S., where the laws may be unsettled or less favorable to us. Such litigation is costly for us, could result in damage awards, injunctive relief, or increased costs of doing business through adverse judgment or settlement, could require us to change our business practices in expensive ways, or could otherwise harm our business."
It stands to reason that if eBay could take responsibility for counterfeit listings in a cost effective way, it would have avoided this litigation. eBay's business model could be in some pretty serious trouble if a judge rules that the company is responsible for copyright infringement by third party sellers -- it might have to just stop selling luxury goods altogether.
This will be an important case for any eBay investors to follow.
We recently acquired shares of Tiffany & Co. (NYSE: TIF) at $36.00 ahead of its earnings report. We have been watching it for about 16 months and I thought there was increasing value as the stock started dropping from its 52 week high of $57.34. I had previously brought it to readers' attention in Serious Money: Pondering Home Depot, Tiffany & Wells Fargo. After we put TIF on our watch list, that seemed like all we could do, just watch as it continued to move up farther away from our perceived value. So we just decided to let this train leave the station without us. Then the train came back and rewarded our patience.
Tiffany is a brand name of historic magnitude, pays a dividend, has a business that is easy to understand and is expanding internationally. Yesterday, the stock closed at $43.56 as the company raised its outlook for the year. The stock price is now just above where it was when we started watching it, but long term there might still be value here. I should note that we will not add to our position at this level, but if it drops again we will.
The following ten year chart indicates a highly erratic stock that can swing wildly, as much as $20 in any given year. From 1999 to 2004, there was no appreciation. Interestingly, I would have thought these 20 point swings might be appealing to one of my colleagues who uses charts and is a trader, but it was not. He hated this chart and sees no upward momentum. I on the other hand see plenty to like.
MOST NOTEWORTHY: Credit Suisse, Bank of America and Bear Stearns were today's noteworthy downgrades:
UBS downgraded Credit Suisse (NYSE: CS) to Neutral from Buy to reflect the company's higher-than-expected write-downs in Q1.
Merrill cut Bank of America (NYSE: BAC) to Sell from Neutral and lowered their estimates to reflect a higher credit loss outlook as they now estimate Bank of America's loan provision will rise to $15B in 2008 from $8.4B in 2007.
Sandler O'Neil downgraded Bear Stearns (NYSE: BSC) to Sell from Hold citing share premium to deal value of $10.00.
OTHER DOWNGRADES:
Citigroup lowered Gap (NYSE: GPS) to Hold from Buy.
Tiffany & Co (NYSE: TIF) was downgraded to Perform from Outperform at Oppenheimer.
3Com (NYSE: COMS) shares were up 7% in after-hours trading Monday as the network-equipment maker, whose $2.2 billion acquisition by Bain Capital LLC was said last week to be pulled off due to the government's security concerns, reported third- quarter sales of $336.4 million and 8 cents earnings per share (excluding one-time items), beating estimates.
Valero Energy (NYSE: VLO) shares are down over 3% in premarket trading after the refinery operator forecast significantly lower throughput margins on gasoline and other petroleum products and forecast first-quarter earnings of $0.10 to $0.35 per share below analyst estimates.
Activist investor Carl Icahn rejected an offer from Motorola Inc. (NYSE: MOT) that would have given him two board seats instead of the four Icahn had launched a proxy battle to get. Icahn, who holds 6.3% of the shares in the telecommunications-equipment maker, sued the company for access to crucial board documents. Icahn has been hpushing Motorola to divest the unprofitable handset division for months. While Icahn has been quite vocal with his criticism, Motorola's board and management haven't commented much.
Today's summary of the full day would be highly incomplete without mention of the higher buyout price for Bear Stearns Co. (NYSE: BSC). The $2.00 all-stock bid from JPMorgan Chase Co. (NYSE: JPM) has finally been boosted to $10.00 per share, and the target shares rose some 88% to $11.25 on the day. There were many reasons that this price was going to have to be raised, but the question was by how much? Shares traded up even higher than that $10.00 threshold on hopes for better share conversion rates and perhaps even on hopes of a higher price. Below are the unofficial closing levels for US stock markets:
DJIA 12,548.64 (+187.32; +1.52%)
S&P500 1,349.88 (+20.37; +1.53%)
NASDAQ 2,326.75 (+68.64; +3.04%)
10YR-TBond 3.522% (+0.194%)
Despite Blue-Horseshoe loving everything, there were still many 52-week lows.
It appears that Visa, Inc. (NYSE: V) isn't going to just rise indefinitely after its IPO, or so it seems today as shares fell by 7% to $59.73.
Apple Inc. (NYSE: AAPL) was one of the key standouts today in tech, yet its news today was more strategic than groundbreaking. Its web browser Safari may be going after Windows, but even for Steve Jobs this may be a long hard journey. Shares closed up 4.7% to $139.53.
For the quarter, the company said that its profit slipped 16% to $118.3 million, or 89 cents per share, due to bad loans. These numbers are down from $140.5 million, or $1.02 per share, reported in the same period a year earlier. Included in the company's earnings figures were 22 cents per share related to a charge for loans made to Tahera Diamond Corp. Excluding that, Tiffany earnings numbers would have come to $1.27 a share. Analysts, on average, expected the company to show quarterly earnings of $1.21 per share.
The jewelry retailer posted growth of 10% for its fourth-quarter revenue, which climbed to $1.05 billion from $958.9 million a year earlier. Sales matched analysts' forecasts, according to Thomson Financial. U.S. retail sales showed a gain of only 4% to $527.9 million, following slowing same-store sales, while international sales surged 21% to $422.6 million.
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.
Leading drug store chain Walgreen Co. (NYSE: WAG) and upscale specialty retailer Tiffany & Co. (NYSE: TIF) are scheduled to report earnings tomorrow. Here's a quick peek at them ahead of results.
Walgreen has beat earnings estimates in four of the past five quarters. When the company reported first-quarter results back in November, earnings came to 46 cents per share, two cents less than the consensus forecast of analysts polled by Thomson Financial, and up from the 43 cents in the same period of the previous year. For the current quarter, analysts expect 67 cents per share, compared to 65 cents in the year-ago quarter.
The company's earnings per share growth forecast for this year is 9.42%, which is better than the industry average but less than the 30.68% of rival CVS Caremark Corp. (NYSE: CVS). The analysts' consensus recommendation is to hold Walgreen, and has been for the past three months. Shares have risen since hitting a 52-week low of $32.50 in January, and closed Friday at $36.78.
For news about Walgreens that could influence the earnings results, see BloggingStocks' Walgreen coverage.
The currency of our realm, the US Dollar, has been losing value for many years, but lately the results of this sad state of affairs have become increasingly more evident. Concerns are mounting on a global basis not just in the United States. The euro, once pegged at a buck, is now trading at $1.55, while gold has passed $1,000 and oil has continued its charge, breaking through the $110 per barrel mark.
While a good deal of this problem is home grown, the pain is being felt all around the world. We have read many stories about how the American economy is a smaller part of the global economy and becoming somewhat detached. This is nonsense. What has happened is that the global economy has become infinitely more integrated and like any integrated structure (the architect speaking), what occurs in one place is felt everywhere.
The Federal Reserve Board, led by Chairman Ben Bernanke, has been watching the economy in an extremely measured fashion, bordering on casual. To those who see beyond Bernanke's calm demeanor, one should imagine a stock trader of old, holding the ticker tape up to his eyes and monitoring every change, every blip in the market as the ticker tape machine clicks away, spewing out the latest market activity.
Tiffany & Co. (NYSE: TIF) shares are trading higher today after the company said it now expects to top its first-quarter earnings forecast of 39 cents per share. TIF also raised its dividend by 2 cents. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on TIF..gif){kind=logo}
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The currency of our realm, the US Dollar, has been losing value for many years, but lately the results of this sad state of affairs have become increasingly more evident. Concerns are mounting on a global basis not just in the United States. The euro, once pegged at a buck, is now trading at $1.55, while 
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Oil hits record $127.43 on supply concerns, raised Goldman forecast
