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PetSmart (PETM) more than triples its dividend, plans buyback

Posted Jun 24th 2009 1:30PM by Brent Archer (RSS feed)
Filed under: Good news, Options, Technical Analysis

PETM logoPetSmart (NASDAQ: PETM - option chain) shares are rising today after the company boosted its quarterly dividend to 10 cents per share from 3 cents per share. PetSmart also announced it is planning a $350 million stock buyback. 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 PETM.

PETM opened this morning at $21.11. So far today the stock has hit a low of $20.41 and a high of $21.19. As of 11:20, PETM is trading at $20.72 up 0.74 (3.7%). The chart for PETM looks bullish and S&P gives PETM a positive 4 STARS (out of 5) buy ranking.

Continue reading PetSmart (PETM) more than triples its dividend, plans buyback

Option update: Sun Micro (SUNW) volatility up before symbol changes to JAVA

Posted Aug 23rd 2007 2:35PM by Paul Foster (RSS feed)
Filed under: Dell (DELL), Sun Microsystems (JAVA), Options

Sun Microsystems (NASDAQ: SUNW) volatility elevated into 9/5 financial analyst meeting.

SUNW is flat at $4.86. SUNW, which will change its symbol to JAVA on 8/27, will have an analyst meeting in New York on 9/5/07. The company has announced a $3 billion stock buyback on 5/16/07. SUNW recent market cap is $17.3 billion. SUNW over all option implied volatility of 45 is above its 26-week average of 38 according to Track Data, suggesting larger price risk.

Rackable Systems (NASDAQ: RACK) volatility flat on renewed buyout chatter.

RACK, a provider of servers and storage products, is recently up $0.65 to $12.62 on unconfirmed and renewed deal speculation. SUNW & DELL have been frequently chattered as interested in RACK. RACK call option volume of 2,690 contracts compares to put volume of 250 contracts. RACK September option implied volatility is at 47, October is at 51 and December is at 56, above its 26-week average of 55 according to Track Data, suggesting non-directional and less price risk.

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

NVR announces buyback -- stock soars

Posted Jul 31st 2007 2:40PM by Kevin Kelly (RSS feed)
Filed under: Major movement, Press releases, Insiders, Housing

Moments ago, homebuilder NVR (AMEX: NVR) announced a $300 million share buyback plan. According to a news report, the buyback will be performed on the public market as well as through privately negotiated transactions. NVR, like every other homebuilder, has been getting killed in recent months due to the grim housing market.

I love seeing this, especially for a stock like NVR. Although I don't think homebuilders have bottomed for the short term, over the long term I believe most of them are tremendous values. Despite the housing slowdown, NVR still trades for just 15x next year's earnings and 6-7x earnings in a positive housing cycle. I think this buyback shows that management is committed to NVR and strongly believes in the company's long term potential.

Not only is this a logical move financially, but this move has appeased traders who have sent the stock quickly up about 40 points since the announcement. Traders love buybacks because they put a "floor" in a stock's price.

Wendy's bites into shares outstanding to raise 2007 EPS

Posted Apr 1st 2007 11:40AM by Victoria Erhart (RSS feed)
Filed under: Earnings reports, Forecasts, Good news, Wendy's Intl (WEN)

Hamburger chain Wendy's International (NYSE: WEN) recently announced that it has accelerated its stock buyback program, purchasing 9 million shares at an average price per share of $31.33, for a total of $300 million. Due to the decrease in the number of weighted average shares outstanding, Wendy's management has revised 2007 full-year EPS upwards. Previous guidance forecast EPS of $1.17 to $1.23. Now guidance projects 2007 EPS to be in the range of $1.26 to $1.32. This works out to a first quarter 2007 EPS of $0.11 to $0.14, compared to a net loss of $0.05 in first quarter 2006.

The good news regarding a forecast increase in EPS was tempered, however, by several factors that will negatively affect the company. Wendy's will close approximately 75 locations this year, 35 company-owned and 40 franchises. The company will incur closing and lease termination costs of approximately $4 million. Wendy's will spend $1.5 million in franchisee remodeling incentives and be subject to an effective tax rate of approximately 35% in first quarter 2007. Despite these factors, full-year earnings remain on target in the $330 to $340 million range.

Wendy's stock closed Friday, 30 March, at $31.30, up $0.17.

Credit Suisse giving back its riches

Posted Jan 22nd 2007 12:51PM by Tom Taulli (RSS feed)
Filed under: Private equity,

Even for a company the size of Credit Suisse (NYSE: CS) -- which has a market cap of $74 billion -- a $6.4 billion stock buyback is a big deal. But for investors, it was a non-event, as the stock price increased a mere 4 cents to $68.99.

Then again, the buyback is over a period of three years. Besides, buybacks do not necessarily happen.

Currently, Credit Suisse is flush with cash because of its recent sale of Winterthur Group (the deal amounted to about $9.8 billion). Part of this windfall will go to some acquisitions. However, do not expect mega acquisitions.

The focus? It looks like Credit Suisse wants to bolster wealth management , private banking and leverage finance (such as for private equity deals). Actually, the focus may be in overseas markets, such as Asia and even the Middle East.

While other competitors -- such as Goldman Sachs (NYSE: CS) -- have had standout stock performances, Credit Suisse has been a big of a laggard. It looks like the company still does not have much of a strategy to thrill shareholders.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Home Depot -- slowly being taken private

Posted Dec 15th 2006 9:26AM by Eric Buscemi (RSS feed)
Filed under: Home Depot (HD)

The Home Depot Co. (NYSE: HD) is quickly putting to work the $5 billion of cash it raised through a debt offering. Its board has authorized the immediate repurchase of $3 billion of stock through an accelerated share repurchase agreement.

Home Depot has repurchased $6.7 billion of stock, or 173 million shares, this year. Since 2002, it has purchased more than 450 million, or roughly 19%, of outstanding shares.

Taking into account the $5 billion the company recently raised, it will have about $12 billion of debt on its balance sheet. Home Depot is expected to generate about $11 billion in EBITDA, so annual EBITDA covers total balance sheet debt roughly about 1x -- a tremendously conservative capital structure.

Investors need to hear evidence that the worst is over in same-stores sales decline. The most recent figures were simply awful. When better sales figures are announced, Home Depot stock should soar.

Symbol Lookup
IndexesChangePrice
DJIA+44.2910,291.26
NASDAQ+15.822,166.90
S&P 500+5.501,098.51

Last updated: November 11, 2009: 06:35 PM

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