Children's Place Retail Stores, Inc. (Nasdaq: PLCE) has been in the news recently because it hasn't been able to maximize the value of the licensing agreement it made with The Walt Disney Company (NYSE: DIS) for its Disney Store chain a few years ago. In fact, it looks like Disney will be taking a lot of the stores back (I don't think Disney should do this, though). Well, Children's Place got some more bad news Monday in the form of an earnings cut from an analyst. John Zolidis, of Buckingham Research Group, believes Children's Place will achieve $0.40 per share for Q1, a number that is $0.09 lower than his previous earnings expectation. For the year, he thinks the retailer can do $1.44 per share; his previous estimate was $1.55 per share.

Of course, an analyst is not doing his job if he doesn't send something of a mixed message. He's cutting his expectations for earnings while at the same time saying that the valuation might be attractive at the moment for Children's Place's stock. Well, I sort of understand what he is saying, but let me say this: I don't like Children's Place right now and won't be buying shares, good valuation or not. This is one of those stocks and companies that just doesn't inspire confidence; the retailer plays in a tough niche, the stock is well off its highs, it couldn't properly grow Disney's retail operations, and, perhaps most importantly, there simply might be better ideas out there. If one wants to play retail, why not a Wal-Mart Stores, Inc. (NYSE: WMT) or a Target Corporation (NYSE: TGT)?

Nope, I'm not interested in Children's Place. With this earnings cut, and with stronger retailers up for consideration, I think investors might do better buying something else. Yes, the stock and/or company will probably rebound, but I'm just not in the mood to speculate with this brand.

Disclosure: I own shares in Disney; positions can change at any time.

UST (NYSE: UST) volatility Flat; UST down 6%; Altria Group (NYSE: MO) testing Marlboro Moist Smokeless tobacco. UST, a leading producer and marketer of moist smokeless tobacco products (Skoal, Copenhagen), is recently down $3.06 to $48.91. MO announced the introduction of Marlboro Moist Smokeless tobacco into test market. MO had been frequently mentioned as possibly interested in UST. UST has a market cap of $7.7 billion with quarterly March 2007 total revenue of $447 million. UST September option implied volatility of 26 is near its 26-week average of 23 according to Track Data, suggesting non-directional price risk.

Forest Labs (NYSE: FRX) volatility Elevated on patent challenge Appeal. FRX, a U.S. based pharmaceutical company, is recently down .48 to $37.74. FRX's Lexapro, an antidepressant accounting for 66% of FRX total revenue, is facing a patent challenge appeal.Buckingham Research says "LXP patent challenge appeal which we would expect to be resolved from an appellate decision over the next few months (we expect FRX to prevail in this case)." FRX call option volume of 9,195 contracts compares to put volume of 4,571 contracts. FRX September option implied volatility of 70 is above its 26-week average of 33 according to Track Data, suggesting larger price risks.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.