Buffalo Wild Wings (NASDAQ:BWLD), an operator and franchisor of 510 restaurants, is expected to report Q2 EPS in late July. BWLD is recently down $2.32 to $27.41. BWLD call option volume of 955 contracts compares to put volume of 4,570 contracts. BWLD July option implied volatility is at 65, August is at 76; above its 26-week average of 56 according to Track Data, suggesting larger price movement into late July EPS.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Some investors shy away from small stocks, thinking they are too volatile and risky. But BusinessWeek takes a look at such stocks and finds some that could offer a lot of potential for growth.
It can be hard to find small companies that have great growth potential. Since most Wall Street analysts ignore smaller companies, it is often tough for investors to find the research that they need in their selection process, so they have to rely on their own research in order to find that perfect small cap stock.
One thing to look for when examining small cap stocks is a long and established track record. The downside to this approach is that these stocks are not going to be the next "big thing" and bring you huge profits in the short run. These stocks are the ones that typically serve a niche market, and perform that service successfully. While these will not make you rich overnight, they are fairly reliable companies you can look to for nice and steady returns. If you are the type of investor who likes to buy and hold, these are the small cap stocks for you.
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.
MOST NOTEWORTHY: NuVasive, Buffalo Wild Wings and Invesco were today's noteworthy initiations:
Merriman believes NuVasive's (NASDAQ:NUVA) expanding product and distribution should continue to drive growth and feels the recent pullback provides a good entry point into shares. Merriman started NuVasive with a Buy rating.
Buffalo Wild Wings (NASDAQ:BWLD) was initiated at Jefferies with a Hold rating and $30 target as they believe consensus estimates are aggressive and that shares are approaching fair valuation.
William Blair believes Invesco's (NYSE:IVZ) investment capabilities and diversified client base are key differentiators that will drive superior relative growth over the long term; shares were assumed with an Outperform rating.
OTHER INITIATIONS:
Baird initiated XenoPort (NASDAQ:XNPT) with an Outperform rating and $74 target.
KeyBanc assumed Felcor Lodging (NYSE:FCH) with a Buy rating and $14 target.
Trimble Navigation (NASDAQ:TRMB) was initiated at Thomas Weisel with a Market Weight rating and $30 target.
MOST NOTEWORTHY: AsiaInfo Holdings, Western Alliance Bancorp and Gladstone Capital were today's noteworthy initiations:
Kaufman Bros. believes AsiaInfo Holdings (NASDAQ: ASIA) is the leading provider of software to Chinese telecommunications firms, which they note are in the midst of a spending increase to upgrade legacy billing and CRM software systems. The firm initiated shares with a Buy rating and $15 target.
Keefe Bruyette resumed coverage of Western Alliance Bancorp (NYSE: WAL) with a Market Perform rating and $14 target and sees the potential for short-term real estate headline risk.
Gladstone Capital (NASDAQ: GLAD) was assumed with a Perform rating at Oppenheimer. The firm believes the increasingly challenging macroeconomic environment raises the risk of deteriorating credit quality and finds shares fairly priced at current levels.
OTHER INITIATIONS:
JMP Securities initiated TheStreet.com (NASDAQ: TSCM) with an Outperform rating and $13 target.
Baird initiated Buffalo Wild Wings (NASDAQ: BWLD) with a Neutral rating and $26 target.
Informatica (NASDAQ: INFA) was initiated with a Buy rating at Broadpoint.
Buffalo Wild Wings(NASDAQ:BWLD) owns, operates and franchises 495 restaurants featuring chicken wings. BWLD is expected to report Q4 EPS on February 12. BWLD is recently down 61c to $24.74. BWLD call option volume of 740 contracts compares to put volume of 2,847 contracts. BWLD February 25 straddle is priced at $5.40. BWLD March option implied volatility of 80 is above its 26-week average of 56 according to Track Data, suggesting hedging for downside price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
MOST NOTEWORTHY: Buffalo Wild Wings (BWLD), Pepsi Bottling (PBG), Brinker International (EAT), Northwest Airlines (NWA) and Spectrum Brands (SPC) were today's noteworthy upgrades:
Merriman upgraded shares of Buffalo Wild Wings (NASDAQ: BWLD) to Buy from Neutral on valuation as they believe the 25% sell-off post in-line earnings is overdone.
Banc of America upgraded shares of Pepsi Bottling (NYSE: PBG) to Buy from Neutral to reflect the company's earnings power in 2008, ongoing cost controls and more robust product pipeline.
SMH Capital upgraded shares of Brinker Int'l (NYSE: EAT) as they believe expectations are too low for Q4 and FY08.
Northwest Airlines (NYSE: NWA) was upgraded to Overweight from Equal Weight at Morgan Stanley on valuation.
Spectrum Brands (NYSE: SPC) was upgraded to Neutral from Underperform at Buckingham on valuation...
OTHER UPGRADES:
Gap (NYSE: GPS) was upgraded to Neutral from Underperform at CL King & Associates.
Raymond James upgraded Ruby Tuesday (NYSE: RT) to Market Perform from Underperform.
Burger King (NYSE: BKC) was raised to Buy from Hold at Citigroup.
MetLife (NYSE: MET) was added to Goldman Sachs' Conviction Buy List.
Buffalo Wild Wings-(NYSE: BWLD) August volatility Elevated at 98 into 7/31 EPS. The company owns, operates and franchises 445 restaurants featuring chicken wings. BWLD is recently up .28 to $39.54. It will report EPS after the close on July 31st. BWLD August option implied volatility of 98 is above its 26-week average of 42 according to Track Data, suggesting larger risk.
Indymac Bancorp-(NYSE: IMB) August volatility Elevated at 110 into 7/31 EPS. Indymac, the 7th largest savings and loan and the 9th largest mortgage originator in the nation, will report EPS on July 31. Shares are recently down .48 to $22.61 on subprime mortgage concerns. IMB call option volume of 4,261 contracts compares to put volume of 13,489 contracts. IMB August option implied volatility of 110 is above its 26-week average of 44 according to Track Data, suggesting larger risk.
Disney-(NYSE: DIS) August volatilities up as expected into 8/1 EPS. Disney is expected to report EPS of .55 cents after the close on 8/1 according to Thomson First Call. CIBC has a $40 price target on DIS. DIS August option implied volatility of 27 is above its 26-week average of 21 according to Track Data, suggesting larger price fluctuations.
Time Warner-(NYSE: TWX) August volatility Elevated at 31 into EPS & Outlook. TWX is expected to report EPS of .21 cents on 8/1. TWX August option implied volatility of 31 is above its 26-week average of 21 according to Track Data, suggesting larger price fluctuations.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Buffalo Wild Wings (NASDAQ: BWLD) was hit with another downgrade today, as shares continue a'blazin' three-year climb northward, up as much as 61% since the start of this year. Sanders Morris Harris downgraded Buffalo Wild Wings to Sell from Buy, telling investors to take profits this morning, despite still being favorable on the restaurant's long-term outlook.
This isn't the only recent Buffalo Wild Wings downgrade. Last Thursday, Merriman downgraded shares to Neutral from Buy, suggesting the company's potential second quarter upside was already reflected in the stock's valuation. They recommended investors to wait on the sidelines for a better entry point.
Despite the favorable long-term outlook of the company and what BB&T called Buffalo Wild Wings' third-straight "blowout quarter," according to the Chicago Tribune, the short position of the company has grown to nearly 25%. This suggests many investors believe shares may be getting ahead of themselves.
When looking at the company's $700 million in cash and zero debt, along with the solid fundamentals and goal to have 1,000 restaurants by 2012, one could see the long-term potential of Buffalo Wild Wings. With shares up nearly 61% since January, a recent 2-for-1 stock split and a 25% short position pressuring shares, investors must take Merriman and Sanders Morris' recommendations seriously.
Shares of Buffalo Wild Wings were down -1.38%, to $42.15, in mid-day trading.
MOST NOTEWORTHY: AVX Corp (AVX), Vishay Intertechnology Inc (VSH), Buffalo Wild Wings (BWLD) and three car-rental companies were today's noteworthy downgrades:
American Technology downgraded both AVX Corp (NYSE: AVX) and Vishay Intertechnology Inc (NYSE: VSH) to Sell from Buy after channel checks suggested weaker than expected demand for the June quarter from Europe, EMS, and distribution.
Sanders Morris believes investors should take profits in Buffalo Wild Wings Inc (NASDAQ: BWLD), cutting shares to Sell from Buy, and sees limited catalysts on the horizon that could drive shares higher.
MOST NOTEWORTHY: Cheesecake Factory (CAKE), Buffalo Wild Wings (BWLD), Alltel (AT), Home Depot (HD) and Nokia (NOK) were today's more noteworthy downgrades:
Cheesecake Factory (NASDAQ: CAKE) was downgraded to Sector Perform from Outperform at CIBC, to Outperform from Strong Buy at Raymond James and to Peer Perform from Outperform at Bear Stearns after the company reduced its second quarter guidance.
Lehman downgraded Alltel Corp (NYSE: AT) to Equal Weight from Overweight as the firm doesn't expect a competing bid for the company.
Home Depot (NYSE: HD) was cut to Market Perform from Outperform following yesterday's rally and feels that with the HD sale out of the way, the focus will now turn to Home Depot's ability to grow in the challenging do-it-yourself retail market. Goldman cut Nokia to Neutral from Buy on valuation...
OTHER DOWNGRADES:
JP Morgan cut Headwaters (NYSE: HW) to Underweight from Neutral.
On today's Stop Trading! on CNBC, Jim Cramer came out discussing Buffalo Wild Wings Inc. (NASDAQ: BWLD) after the stock rose more than 14% to a new 52-week and all-time high when the company beat earnings estimates. The company makes one-third of its money from beer and buffalo sauce, and he can't imagine why 1/3 of the float was short. But Chipotle Mexican Grill, Inc. (NYSE:CMG) is the one he said is the stock of the day, and may be a multi-year grower. Chipotle shares are up 19% after yesterday's earnings to a new all time high as well.
Cramer called Liz Claiborne (NYSE: LIZ) as the worst retail conference call of the quarter, which is the same as I noted yesterday. He also said the market is remarkable and we all came in too bearish at the start of the year. Cramer still thinks the market is decelerating inside the U.S. and the rest of the world is rising while we are not.
MOST NOTEWORTHY: Newmont Mining Corp (NEM), Qwest Communications International Inc (Q), Sirius Satellite Radio Inc (SIRI), Chipotle Mexican Grill, Inc (CMG) and American Eagle Outfitters (AEO) were today's noteworthy upgrades:
Prudential upgraded shares of Newmont Mining Corp (NYSE: NEM) to Neutral from Underweight citing valuation, higher gold and copper prices and specific mine factors that should lead to an operational turnaround.
Credit Suisse raised shares of Qwest Communications International Inc (NYSE: Q) to Neutral from Underperform as the firm believes management is less likely to engage in a fiber video build and cites the increase in the company's NOL carry-forwards.
Sirius Satellite Radio (NASDAQ: SIRI) was upgraded to Outperform from Market Perform at Barrington Research.
Raymond James upgraded Chipotle Mexican Grill (NYSE: CMG) to Outperform from Market Perform. Morgan Keegan also raised shares to Outperform from Market Perform, citing better-than-projected operating fundamentals and growth prospects.
American Eagle Outfitters (NYSE: AEO) was upgraded to Strong Buy from Buy at Matrix USA to reflect the company's impressive SSS growth...
OTHER UPGRADES:
Arris Group, Inc (NASDAQ: ARRS) was upgraded to Sector Performer from Underperformer.
MORE NOTEWORTHY: The aluminum sector, National City Corp (NCC), MGM Mirage (MGM) and Domtar Corp (UFS) were some of today's notable downgrades:
Prudential downgraded the aluminum industry to Unfavorable from Favorable, cutting cut Alcoa Inc (NYSE: AA) to Neutral from Overweight and Alcan Inc (NYSE: AL) to Underweight from Overweight. Prudential cited the increased Chinese output growth and slowing U.S. demand for aluminum for the downgrades.
Keefe Bruyette cut National CityCorp (NASDAQ: NCC) to Underperform from Market Perform based on higher credit costs and near-term capital requirements.
MGM Mirage (NYSE: MGM) was downgraded to Sell from Hold at Matrix USA citing valuation.
Citigroup cut Domtar Corp (NYSE: UFS) to Sell from Hold with a $9 target based on valuation.
OTHER DOWNGRADES:
Dow Chemical Co (NYSE: DOW) was removed from Credit Suisse's U.S. Focus List.
Prudential cut Dean Foods Co (NYSE: DF) to Neutral from Buy based on valuation and volatile short-term raw milk prices.
Barrington downgraded Cintas Corp (NASDAQ: CTAS) to Market Perform from Outperform with a $40 target based on poor Q3 earnings and lower revised guidance.
Methanex Corp (NASDAQ: MEOH) was cut to Underperform from Market Perform at BMO Capital.
Buffalo Wild Wings (NASDAQ: BWLD) was downgraded to Hold from Buy with a $67 target at Jefferies based on valuation.
Buffalo Wild Wings (NASDAQ:BWLD), an operator and franchisor of 510 restaurants, is expected to report Q2 EPS in late July. BWLD is recently down $2.32 to $27.41. BWLD call option volume of 955 contracts compares to put volume of 4,570 contracts. BWLD July option implied volatility is at 65, August is at 76; above its 26-week average of 56 according to Track Data, suggesting larger price movement into late July EPS.
Some investors shy away from small stocks, thinking they are too volatile and risky. But BusinessWeek takes a look at 
Here are some highlights from this past week's 
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Buffalo Wild Wings
Buffalo Wild Wings
On today's Stop Trading! on CNBC, Jim Cramer came out discussing 
The week in preview: New quarter earnings kick-off
Comfort Zone Investing: Keep your recovery expectations real
Will Americans have to slim down to fit into their cars?
