Many of us would be happy to benefit from a quiet retirement without facing concerns of losing all of our hard earned money. Fortune 40 gives us a helping hand by suggesting some big names to invest in that could offer us the results that we are looking for.
One such company is Abbott Laboratories (NYSE: ABT), whose earnings surged 35% during its last quarter, helped by its famous anti-inflammatory drug Humira and HIV treatment Kaletra. Looking ahead to the company's performance, CEO Miles White is planing to keep his main attention on its medical devices unit which is seen as a key element against strong competition.
Fortune 40 also looks at beverage maker The Coca-Cola Company (NYSE: KO), which benefits from strong international gains able to beat recent weakness in U.S. In addition, it looks like the company's acquisition of Glacéau and its VitaminWater brand offer it a good support to outperform on the market.
Abbott Laboratories (NYSE: ABT) shares are trading higher after the Food and Drug Administration denied regulatory approval for Merck & Co.'s (NYSE: MRK) cholesterol drug Cordaptive. The Merck drug would have directly competed with ABT's own cholesterol drug. 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 ABT.
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 $53.32. So far today the stock has hit a low of $52.97 and a high of $53.73. As of 12:10, ABT is trading at $53.24, up $1.63 (3.2%). 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 June bull-put credit spread below the $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 13.6% return in just seven weeks as long as ABT is above $50 at June expiration. Abbott would have to fall by more than 6% before we would start to lose money. Learn more about this type of trade here.
Shares of drug company Abbott Laboratories Inc. (NYSE: ABT) were trading higher this morning after the company reported that its first-quarter profit jumped 35%, helped by strong international demand for its rheumatoid arthritis medication Humira. However, the stock is down 1% just before noon.
For the quarter, Abbott Laboratories reported that its profit climbed to $938 million, or 60 cents per share, boosted by higher sales of its prescription drugs and medical devices that benefited from favorable foreign exchange rates. Excluding special items, the company's earnings came in at 63 cents a share, beating analysts' estimations for quarterly earnings of 62 cents a share.
The pharmaceutical company also announced a 14% growth in revenues, to $6.77 billion, up from $5.95 billion a year earlier. Revenue during the period was helped by a 54% increase in its drug Humira sales which surged to $878 million in the first quarter. Analysts, on average, were expecting the company show $6.53 billion in revenue, according to Thomson Financial.
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.
Abbott Laboratories (NYSE: ABT) is scheduled to announce its Q3 earnings before the market opens tomorrow. The company's last three earnings announcements have narrowly beaten analyst expectations, and its year-ago quarter was in-line with expectations. The company is predicting earnings between 64 and 66 cents per share while analysts are forecasting earnings of 66 cents per share. 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 ABT.
After hitting a one-year high of $59.50 in May, the stock has struggled against resistance around $56 over the past few months, and has dropped sharply in recent weeks. This morning, ABT opened at $52.11. So far today the stock has hit a low of $51.66 and a high of $52.18. As of 10:45, ABT is trading at $51.99, up 7 cents (0.13%). The chart for ABT looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a January 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 5.3% return in 3 months as long as ABT is below $60 at January expiration. Abbott would have to rise by more than 15% before we would start to lose money.
ABT has not been above $60 ever and has shown some resistance around $56 recently. This trade could be risky if the company's earnings tomorrow morning are a positive surprise, but even if that happens, this position could be protected by the resistance the stock formed when it topped around $59 back in April and May.
Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: At publication time, Brent currently controls a bullish hedged positions in ABT. Both this trade and the one above can expire profitably at the same time.
Abbott Laboratories (NYSE: ABT) opened at $54.00. So far today the stock has hit a low of $53.15 and a high of $54.97. As of 10:45, ABT is trading at $54.00, up $0.61 (1.1%).
After hitting a one-year high of $59.50 in May, the stock has dipped down to previous support levels right around $54. Shares are gaining today after the company's Q2 earnings of 0.69 per share surpassed expectations of 0.68. Technical indicators for ABT are 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 an November 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 and leverage returns. For this particular trade, we will make a 8.7% return in just 4 months as long as ABT is above $47.50 at November expiration. ABT would have to fall by more than 12% before we would start to lose money.
ABT hasn't been below $47.50 November and has shown support around $53 recently. This trade could be risky if the company's next earnings (due out in mid-October) are not as well-received. Even if that happens, it looks like this position could be protected the strong support the stock found just around $53, plus its 200 day moving average, which is currently at $52 and rising.
Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: At publication time, Brent neither owns nor controls positions in ABT.
Abbott Laboratories (NYSE: ABT) will not sell its primary in-vitro and point-of-care diagnostics businesses to General Electric (NYSE: GE) as planned, both companies say, due to a disagreement on the final terms of the $8.13 billion proposal.
Despite being approved by regulators in the U.S. and Europe, GE says that it was in both of their best interests to terminate it. The move would have given GE its first entry into the laboratory testing space.
The Wall Street Journal believes that the breakup may have been related to the continued regulatory problems at Abbott's Irving, TX, manufacturing facility. The unit has been problematic for Abbott, with $100 million in fines back in 1999. The FDA called Abbott's devices "adulterated" and "misbranded," which could have made GE nervous about taking on regulatory issues.
Some analysts say the deal's failure is a good thing because they think GE was overpaying. "Health care," says JP Morgan's Stephen Tusa in the Journal, "is still a place that we want to see them invest."
Abbott said the decision to cancel the contract would have no impact on their previously issued second-quarter or full-year guidance, excluding specified items. JP Morgan told investors this morning to buy shares of Abbott on the weakness from the news, saying that while the break-up is a setback, the company's broader plan is still intact.
Abbott Laboratories (NYSE: ABT) opened at $53.10. So far the stock has hit a low of $52.90 and a high of $53.50. ABT is now trading at $53.04, down 0.51 (-.09%).
After hitting a one-year low of $40.55 on April 25, 2006 the stock worked its way up to a one year high of $53.85 yesterday. Abbott reported a big fourth-quarter loss on Wednesday, as a charge related to its $3.7 billion purchase of Kos Pharmaceuticals offset higher sales of medical devices and drugs.The technicals for the stock have been nicely improving and S&P gives ABT a 4 STAR Accumulate rating.
For a conservative bullish hedged play on this stock, I might consider a May covered call around the $50 area. ABT also pays a dividend to the tune of 2.2% annual yield.
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.
Many of us would be happy to benefit from a quiet retirement without facing concerns of losing all of our hard earned money. Fortune 40 gives us a helping hand by suggesting some big names to invest in that could offer us the results that we are looking for. 
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