Bristol-Myers Squibb (NYSE: BMY) shares are trading higher today after a Bernstein analyst wrote that BMY might be a takeover candidate, one day after the company announced it has completed its $234.6 million acquisition of Kosan Biosciences. 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 BMY.

After hitting a one-year high of $32.35 in July, the stock hit a one-year low of $19.43 last week. BMY opened this morning at $20.06. So far today the stock has hit a low of $20.00 and a high of $20.60. As of 12:50, BMY is trading at $20.45, up 78 cents (4.0%). The chart for BMY 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 September bull-put credit spread below the $17.50 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 an 11.1% return in just three months as long as BMY is above $17.50 at September expiration. BMY would have to fall by more than 14% before we would start to lose money. Learn more about this type of trade here.

BMY hasn't been below $19.40 at all in the past year and has shown support around $19.50 recently. This trade could be risky if the company's earnings (due out on 7/24) disappoint, but even if that happens, this position could be protected by the support the stock might find from bargain hunters looking for defensive stocks.

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 BMY.

MAJOR PAPERS:

• Once thought to be extremely safe, action rate securities have proved difficult to sell in this credit crisis. Tech companies are big holders of them and are taking charges left and right, including MetroPCS Communications Inc (NYSE: PCS), Palm Inc (NASDAQ: PALM) and Earthlink Inc (NASDAQ: ELNK), according to the Wall Street Journal.
• Electronic Arts Inc (NASDAQ: ERTS) is again urging Take-Two Interactive Software Inc (NASDAQ: TTWO) to negotiate after it recommended that its stockholders not sell any of its shares to EA and help its $2B takeover bid, the Financial Times reported.

OTHER PAPERS:

• NYSE Euronext Inc (NYSE: NYX) will look to increase its stakes in India's National Stock Exchange and the country's Multi Commodity Exchange, the Business Standard reported, once foreign ownership rules are eased. NYSE Euronext also intends to partner with the two Indian exchanges in order to help them develop their business.

WEB SITES:

• Business Week reported that Brian Marckx of Zacks Investment Research said Bristol Myers Squibb Company (NYSE: BMY) may be an attractive takeover candidate for a larger pharma such as Pfizer Inc (NYSE: PFE) or France's Sanofi-Aventis SA (NYSE: SNY), both of which have been partners with Bristol on some of its products.

MAJOR PAPERS:

• The Wall Street Journal reported that Siemens AG (NYSE: SI) estimated that its earnings this quarter would be dragged down by about $1.4B on weaker-than-expected performance in major business prospects.
• According to the Financial Times, Bristol-Myers Squibb Company (NYSE: BMY) has reportedly made informal approaches to several potential bidders for its baby formula business, Mead Johnson, which is believed to be worth between $7B and $9B.

OTHER PAPERS:

• The Telegraph reported that The Goldman Sachs Group Inc (NYSE: GS) is expected to announce a $3B writedown this week, part of which is attributable to their stake in Industrial & Commercial Bank of China. Goldman will also have writedowns of about $1.6B in its leveraged loan business.
• Several union leaders are accusing General Motors Corporation (NYSE: GM) of trying to lower the wages of more positions than the company and union had agreed to under their labor contract, the Detroit News reported.

Monday October 1

* Beijing Med-Pharm Corporation (NASDAQ: BJGP) to hold a conference on the acquisition with Sunstone Pharma at 9am.

Tuesday October 2

* Ford Motor Company (NYSE: F) to report monthly sales at 1pm, General Motors Corporation (NYSE: GM) to report monthly sales at 2pm.
* PDUFA date for Biovail Corporation (NYSE: BVF)/Depomed Inc (NASDAQ: DEPO)/King Pharmaceutical Inc's (NYSE: KG) Glumetza for glycemic control in diabetic adults.

Wednesday October 3

* Threshold Pharmaceuticals (NASDAQ: THLD) to discuss Glufosfamide results from Phase III Clinical Trial at 4:30pm.

Thursday October 4

* Constellation Brands (NYSE: STZ) to report Q2 earnings; conference call at 10am.
* Lawson Software (NASDAQ: LWSN) to report Q1 earnings; conference call at 4:30pm.
* Research In Motion (NASDAQ: RIMM) to report Q2 earnings; conference call at 5pm.

Friday October 5

* PDUFA date for Bristol Myers Squibb's (NYSE: BMY) Abilify for the treatment of schizophrenia and manic episodes associated with Bipolar I Disorder.

Since December 2000, Bristol Myers Squibb Co's (NYSE: BMY) stock price has disappointed even the most loyal of shareholders. However, this Big Pharma stalwart is finally poised for some serious growth and to provide some joy to those who have weathered the ski slope downward followed by years of flat line stock movement.

Revenues haven't grown since 2004, and many of the company's patents have expired, leaving them open to generic drug competitors. There have been some questions about accounting as well as some improprieties that have cost BMY significant money to settle government investigations.

But the company has been plowing money into R&D, and now has several drugs in the pipeline that promise to send this stock up in the coming year. These new products treat a range of ailments from hypertension to HIV to cancer to arthritis, and I think they'll be enough to send the stock price over $30 for the first time in more than four years.

To be sure, BMY still has a few things to worry about. The Democrats have already passed a bill in the House that would allow the government to negotiate pharmaceutical prices for Medicare. The bill has yet to pass the Senate and the president has threatened a veto, but if it passes, it will hurt revenues for BMY and other drug companies. The Democrats also have bipartisan support for a bill that would prevent big companies like BMY from paying generic manufacturers to keep their products off the market for a few years. This too could put a damper on revenues.

BMY also faces a more specific threat from Apotex, a Canadian generic manufacturer that has an anti-clotting drug that would compete with Plavix, a major seller for BMY. There is an injunction against this generic drug right now and the companies have gone to court to determine whether the generic drug can be sold. If BMY loses, it will take a serious hit.

One or more of these potential problems may never come to pass. Regardless, I think BMY is turning a corner and its new portfolio of products will be enough to make this a good bet for 2007.

Type of stock: One of the largest pharmaceutical companies that is on the verge of releasing a number of important revenue-driving drugs.

Price target: BMY has been gaining ground recently and is near the top of its 52-week range. I'd grab it now and ride it above $30 by year-end. There is a nice little dividend to boost your profits even more.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

Bristol-Myers Squibb (NYSE:BMY)'s CEO, Peter R. Dolan and General Counsel, Richard K. Willard, will be fired if the company's board of directors agrees with recommendations from an independent monitor. The Wall Street Journal made the unusual move of posting a "breaking news" notice on its web site in advance of the full story.

While Dolan's self-importance is such that the company's "about us" web page features his name, under "CEO:" as the first (and only managerial) Very Important Detail, he's made such gigantic missteps that a recent article said he had "precious little credibility." His attempts to delay generic competition for Plavix are being investigated by the Justice Department, and he's been responsible for "major financial scandals."

Today's Forbes asks, "Who Could Replace Peter Dolan?" and offers up names such as CFO Andrew Bonfield, Chief Scientific Officer Elliot Sigal (a "dark horse") and Karen Katen, Vice Chairman of Pfizer. We'll provide more details as we see them.