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Bank of New York-Mellon earnings don't impress

Brent Archer — Thu, 19 Jul 2007 13:19:00 EST

Filed under: Earnings Reports, Bank of New York (BK), Mellon Financial (MEL), Options, Technical Analysis

The Bank of New York Mellon Corporation (NYSE: BK) opened at $46.47. So far today the stock has hit a low of $45.49 and a high of $46.57. As of 11:15, BK is trading at $45.75, down $0.38 (-0.8%).

Following a strong surge over the past six weeks, the stock hit a new 52-week high yesterday at $46.93. The company announced earnings of 63 cents per share, just beating Wall Street expectations of 61 cents per share, but profit slipped a hair due to costs stemming from the company's purchase of Mellon Financial Corp. Recent technical indicators for the stock have been bullish and steady, while S&P gives BK a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk and leverage returns. For this particular trade, we will make an 11.1% return in just 2 months as long as BK is below $50 at September expiration. BK would have to rise by 9% before we would start to lose money.

BK hasn't been above $50 at all this year but has been rising sharply recently. This trade could be risky if it turns out that the only reason earnings were down was due to the acquisition.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: At publication time, Brent neither owns nor controls positions in BK.

Bank of New York-Mellon earnings don't impress originally appeared on BloggingStocks on Thu, 19 Jul 2007 13:19:00 EST. Please see our terms for use of feeds.

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Before the bell 7-19-07: Earnings help lift stocks

Melly Alazraki — Thu, 19 Jul 2007 07:45:00 EST

Filed under: Before the Bell, Major Movement, International Markets, Google (GOOG), Microsoft (MSFT), eBay (EBAY), International Business Machines (IBM), Bank of America (BAC), Bank of New York (BK), Mellon Financial (MEL), Economic Data, Oil

Stock futures are indicating U.S. stock markets may start the day higher, continuing the recovery from yesterday's slide as concerns about the economy are replaced with focus on earnings and the strong showing from IBM, SAP and eBay.

Yesterday, subprime woes hit the market again following the admission by Bear Stearns that its two hedge funds backed by subprime mortgage securities were essentially worthless. Concerns about inflation Federal Reserve Chairman Ben Bernanke voiced on Capitol Hill caused more jitters.

Today, Bernanke is headed for another day of testimony in front of congress. In addition, at 2 p.m., the June 28 FOMC meeting minutes will be released and investors will sink their teeth in that.
Not much economic data will be released today:
At 8:30 a.m., weekly initial claims number is set to be released. At 10:00 a.m., June Leading Indicators is due and at noon, the Philadelphia Fed index will be reported.

As oil prices continue their climb and now stand above $75 a barrel following the unexpected decline in U.S. gasoline inventories, the US dollar remains near record low against the euro.

Overseas, China's economic growth accelerated to 11.9% in the most recent quarter, rapid even by Chinese standards. The question is whether authorities will move to rein in the economy.
Asian stocks traded mostly higher, as did European markets, rising for the first time in three days.

Corporate news:

According to The Wall Street Journal, Nestle and PepsiCo (NYSE: PEP) held merger talks earlier this year, but the due to a number of complications the talks ended and none appear to be happening now..

Earnings yesterday:

IBM (NYSE: IBM) shares are up 3.4% in premarket trading after the tech bellwether reported after the close yesterday, posting a 12% jump in quarterly earnings and improved its outlook for the rest of the year.

eBay Inc. (NASDAQ: EBAY) announced a 50% surge in second quarter earnings. While eBay's strategy is working as apparent by the strong financial results, listings have declined in the quarter, unnerving investors. Shares are declining 1% in premarket trading (7:08 a.m.).

Earnings today:

This morning Bank of America (NYSE: BAC) reported results as did, Bank of New York (NYSE: BK) and Mellon Financial (NYSE: MEL) -- results.
SAP (NYSE: SAP) shares are up over 5.5% in premarket trading after the company reported that its second-quarter profit grew 8%.

After the close today, Microsoft Corp. (NYSE: MSFT) and Google Inc. (NYSE: GOOG) are set to report their quarterly results.

In major corporate news, PepsiCo (Charts, Fortune 500) and Swiss food giant Nestle explored merger talks earlier this year, although a number of complications got in the way of any deal, according to a report in the Wall Street Journal.

Before the bell 7-19-07: Earnings help lift stocks originally appeared on BloggingStocks on Thu, 19 Jul 2007 07:45:00 EST. Please see our terms for use of feeds.

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CEOs' $1 billion golden boot mark

Peter Cohan — Mon, 09 Apr 2007 15:05:00 EST

Filed under: Pfizer (PFE), Bristol-Myers Squibb (BMY), Wendy's Intl (WEN), Mellon Financial (MEL), RadioShack Corp (RSH)

In 2006, boards paid CEOs $1 billion while kicking them out the door. That is according to an article in the New York Times (registration required) which totaled up the amount of severance paid to 36 CEOs who departed in less than glorious fashion from their publicly-traded employers last year.

I don't mind CEOs getting paid a lot of money if they make money for shareholders. As I posted last October, I think it makes sense to look for companies led by bargain CEOs -- who get paid the smallest percentage of the shareholder value they create.

But it really gets me riled up when CEOs get big bucks for destroying shareholder value. And the Times article presents a rogues gallery of value destroyers. The 12 failed CEOs mentioned got $654 million as a parting gift after destroying $161 billion in shareholder value -- a 30% decline during their tenure.

Overall, canning these CEOs may have been a bad idea, since the 12 companies lost an additional $4.5 billion in market value, or 1%, since the failed CEOs departed. However, this average decline masks big differences among them -- in retrospect seven of the 12 CEO departures look smart and five look dumb.

Continue reading CEOs' $1 billion golden boot mark

CEOs' $1 billion golden boot mark originally appeared on BloggingStocks on Mon, 09 Apr 2007 15:05:00 EST. Please see our terms for use of feeds.

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Cramer still likes financials

Jon Ogg — Wed, 18 Oct 2006 15:34:00 EST

Filed under: Analyst Reports

ON CNBC's Stop Trading segment today, around 2:40 PM EST, Jim Cramer weighed in light sweet crude. He doesn't know where you would put a tanker now and thinks oil is still going to $56 before interest comes in. He would have puts on Oil Service Holders (AMEX: OIH). In fact, Cramer said he would be worried if he was in the oil names and also said that the DJIA is oil-light, so it would go up more if oil drops.

Staying on the DJIA, Cramer thought that today's rapid profit taking when the Dow reached 12K+, was a little too fast.

As for JPMorgan Chase & Co (NYSE: JPM) quarterly results, Cramer said they were better than they got credit for, and he said the financials are all "1-down, 4-up," meaning he thinks there is $1 downside and $4 upside.

On Mellon Financial Corp (NYSE: MEL), Cramer thinks the company had an unbelievable earnings number with headcount flat. Mellon and Goldman Sachs Group Inc. (NYSE: GS) are buys, he said, while GS is ready for an earnings multiple expansion.

Parker-Hannifin Corp (NYSE: PH) stock is cheap, Cramer said.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

Cramer still likes financials originally appeared on BloggingStocks on Wed, 18 Oct 2006 15:34:00 EST. Please see our terms for use of feeds.

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