Jim Cramer Blog

Stocks surged higher in trading, as an infusion of cash into Citigroup (NYSE: C - News) helped ease Wall Street fears concerning the financial sector. For the day, the Dow gained 215 points to end at 12,958. Meanwhile, the Nasdaq rose 1.6% to finish at 2,581, and the S&P ended 1.5% higher to close at 1,428. Light, sweet crude prices fell -$3.28 to settle at $94.22 for January delivery. Treasury and gold prices both tumbled on the day, while the dollar inched higher against the euro but fell versus the yen.
In economic news, a reading of the November Consumer Confidence report came in weaker than predicted, as confidence fell to 87.3 in the month, down from 95.6 in October. Analysts were looking for a reading of 91.5. The report marks a four-month slide in consumer confidence, and was the lowest reading since October 2005.
On the earnings front, Staples (Nasdaq: SPLS - News) reported a third-quarter profit dip, but still posted earnings above Wall Street expectations. For the quarter, the company reported net income of $274.5 million, or 38 cents per share, versus net income of $289.9 million, or 39 cents per share, last year. Excluding a settlement charge, Staples would have posted a profit of 42 cents per share. Quarterly revenue rose to $5.17 billion, up 9% from $4.76 billion a year earlier. On average, analysts were looking for earnings of 40 cents per share on revenue of $5.19 billion. Staples' stock was up 10.6% at the bell.
Retailer American Eagle Outfitters (NYSE: AEO - News) posted a dip in third-quarter profit as net income fell to $99.4 million, or 45 cents per share, from $100.9 million, or 44 cents per share, last year. EPS was higher due to a lower share count. Revenue for the quarter climbed to $744.4 million, up 7% from 696.3 million a year earlier. Earnings per share were in line with expectations although analysts, on average, were expecting revenue of $750.1 million. Shares of American Eagle were down -0.7% in trading.
In corporate news, Citigroup announced that the Abu Dhabi Investment Authority will invest $7.5 billion in the bank in order to obtain a stake not to exceed 4.9%. The cash infusion calls for the Investment Authority to receive equity units that pay an 11% annual yield and can be converted into common shares between March 15th, 2010 and September 15th, 2011 at a price up to $37.24 per share. Citigroup's stock was up 1.7% on the day. Subscribers can read our take on Citigroup in today's edition.
Shares of Activision (Nasdaq: ATVI - News) surged 13.8% after the video-game maker upped its third-quarter and fiscal-year guidance. For the quarter, Activision expects to earn 66 cents per share on revenue of $1.23 billion, up from previous estimates of 51 cents per share on revenue of $1.05 billion. Excluding items, the company is expecting a profit of 70 cents per share, up from 55 cents per share. On average, analysts were calling for earnings of 56 cents per share on sales of $1.04 billion. Subscribers can read our take on Activision in today's edition.
In M&A news, health insurer Cigna (NYSE: CI - News) announced that it will acquire the healthcare unit of Great-West Life in a cash deal worth approximately $1.5 billion. The takeover is expected to increase Cigna's expansion efforts in the Western United States. Analysts said the deal further signals consolidation within the healthcare sector. Shares of Cigna were up 2.3% in trading.
By the BullMarket.com Staff

Labels: Abu Dhabi, AEO, ATVI, C, CI, SPLS

It was a roller-coaster ride for stocks to end the trading week, as Wall Street weighed a solid jobs report with soaring oil prices and a troubled financial sector that continues to battle credit concerns. The Dow bounced off its lows to close higher for the day finishing at 13,595. Meanwhile, the Nasdaq and S&P each rebounded from earlier lows to close at 2,810 and 1,510, respectively. Oil prices rose on the session to close the week at $95.58 a barrel for December delivery. Treasury prices and gold both gained in trading, with gold ending at $808.50 on the day. The dollar fell against the euro, but rose against the yen.
On the economic front, a report from the U.S. labor department showed that employers increased payrolls by a surprisingly strong 166,000 jobs in October, the biggest jump in five months, and nearly double what analysts were expecting. The improved labor report did little to boost Wall Street confidence, however, as investors continued to struggle with rising commodity costs, a weak financial sector, and news that the Fed may pause its rate cutting trend on inflation concerns.
In earnings news, Chevron (NYSE: CVX - News) reported a drop in third-quarter profit as tighter U.S. refining margins took a toll. The nation's second-largest oil company said net income fell in the quarter to $3.72 billion, or $1.75 per share, versus $5.02 billion, or $2.29 per share, last year. Quarterly revenue also declined to $55.17 billion from $54.21 billion a year ago. On average, analysts were expecting earnings of $2.07 per share on revenue of $58.29 billion. Chevron's stock was down -0.6% in trading.
Health insurer Cigna (NYSE: CI - News) said third-quarter net income increased to $365 million, or $1.28 per share, up 22% from $298 million, or 92 cents per share, a year ago. Adjusted income excluding special items was $323 million, or $1.14 per share, versus $268 million, or 83 cents per share, last year. Total revenue in the quarter was $4.41 billion, up from $4.14 billion in the 2006 period. Analysts were looking for EPS of 94 cents on revenue of $4.41 billion. Shares of Cigna were down -3.5% for the day, however, as the company predicted full-year 2008 earnings per share of $4.00-$4.20, missing analyst expectations of $4.23 per share.
NYSE Euronext (NYSE: NYX - News) reported a 279% increase in profit for the third quarter. The company announced Q3 net income of $258 million, or 97 cents per share, up from $68 million, or 43 cents per share, last year. Excluding one-time costs, the company said it earned $202 million, or 76 cents per share. Revenue in the quarter jumped to $1.2 billion from $602 million in the prior year. Analysts had predicted a profit of 73 cents per share on revenue of $823.5 million. The stock fell -0.5% on the day.
In other corporate news, several media sources reported that Citigroup's (NYSE: C - News) board of directors has called an emergency meeting for this weekend. Although the meeting's agenda was not immediately clear, it is widely speculated that the topic of future write-downs may be discussed as well as the future of CEO Chuck Prince.
By the BullMarket.com Staff

Labels: C, CI, CVX, NYX

Here are 7 stocks for traders for Monday from TradingMarkets.com:
Chipotle Mexican Grill, Inc. (NYSE:CMG - News) beat earnings estimates after Tuesday's close. The company reported $0.60 EPS versus estimates of $0.44 EPS. CMG's PowerRating is 5.
Whole Foods Markets Inc. (NasdaqGS:WFMI - News) reported $0.35 EPS versus estimates of $0.33 EPS after the close on Tuesday. WFMI's PowerRating is 5.
Arcelor Mittal (NYSE:MT - News) is expected to announce $1.82 EPS on Wednesday morning. MT's PowerRating is 6.
Cigna Corp. (NYSE:CI - News) is looking to report $0.88 EPS when the company announces earnings on Wednesday morning. CI's PowerRating is 6.
Mastercard Inc. (NYSE:MA - News) should report $1.32 EPS early Wednesday. MA's PowerRating is 6.
Time Warner (NYSE:TWX - News) is looking to have EPS of $0.20 on Wednesday before the market opens. TWX's PowerRating is 5.
Teva Pharmaceutical Industries (NasdaqGS:TEVA - News) should report $0.55 earnings per share early Wednesday. TEVA's PowerRating is 6.
PowerRatings (for Traders) are courtesy of TradingMarkets.com

Labels: CI, CMG, Hot Stocks, MA, MT, TEVA, TWX, WFMI

Buy Back Stock, Get Taken Over: Cigna (NYSE: CI), Sonic (NasdaqGS: SONC), United Stationers (NasdaqGS: USTR)
Cramer observed an interesting fact about takeovers; out of 14 companies which bought back a minimum of 17% of their stock last year, four were taken over. Although four out of 14 may not be an impressive figure at first glance, Cramer comments finding a takeover is like winning the lottery. Companies who buy back stock agressively are keen to increase their own value; "Any company buying back 17% or more of its shares doesn't need to be public." Cramer devoted the program to discussing potential takeover targets with generous buybacks. He gave a passing mention to CI, which is repurchasing stock, although he has covered the company already, and SONC, which he did not discuss because he is concerned about consumer spending. His first featured stock was office products wholesaler USTR, which has a buyback level of 20% and is a "primo" takeover target. He adds the company has a "good margin expansion story" and is currently covered by only three analysts.
On the Brinks (NYSE: BCO)
Brinks bought back 21% of its stock in 2006, and Cramer comments companies like BCO don't "just shrink the float -- they devour it." One segment of the company produces armored cars and the other manufactures security alarms, and BCO could split itself in two or could be bought. Cramer notes BCO is paying off its debts as aggressively as it is buying back stock.

The Skinny on Weight Watchers (NYSE: WTW)
Cramer's favorite stock on Monday was WTW, not only because obesity is a hot issue, but because it has among the most "voracious" buybacks he has ever seen along with a generous cash flow. He adds WTW is a "tremendous" brand, has a good business model, strong licensing and online businesses, and a satisfying quarterly report. Cramer predicts if WTW doesn't get bought, it could take itself private; "takeover or no takeover, Weight Watchers is a buy," Cramer said.
CEO Interview: Peter Georgiopoulos, CEO and Chairman of General Maritime (NYSE: GMR), Chairman of Genco Shipping & Trading (NYSE: GNK), and Chairman of Aegean Marine Petroleum (NYSE: ANW)
When Cramer asked why Peter Georgiopoulos wears so many hats, he replied that while it would be simpler to consolidate the three companies, shareholders prefer to be invested in a specific market; "we think we'll get a better valuation for a pure play." Georgiopoulos notes GMR is up 40% since December and has a fixed $2 dividend in the works. Cramer said Georgiopoulos " is the guy I'm sticking with."
Published By SeekingAlpha

Labels: ANW, BCO, CI, GMR, GNK, Jim Cramer, Mad Money, SONC, USTR, WTW

Here are 7 stocks for traders for Wednesday from TradingMarkets.com:
Getty Images (NYSE:GYI - News) beat earnings on Tuesday after the close, announcing $0.68 EPS over an expected $0.62 EPS. GYI's PowerRating is 5.

Molina Healthcare (NYSE:MOH - News) beat earnings on Tuesday, with $0.34 EPS over a consensus of $0.31 EPS. MOH's PowerRating is 6.
Beckman Coulter (NYSE:BEC - News) announces earnings on Wednesday before the bell; watch for $0.59 EPS. BEC's PowerRating is 4.
CIGNA (NYSE:CI - News) reports earnings on Wednesday morning, with analysts looking for $2.51 EPS. CI's PowerRating is 5.
When Dominion (NYSE:D - News) reports earnings before the market opens on Wednesday, look for $1.48 EPS. D's PowerRating is 5.
Pride International (NYSE:PDE - News) should report $0.58 EPS before the bell Wednesday. PDE's PowerRating is 5.
Analysts will be watching for Sprint Nextel (NYSE:S - News) to announce $0.24 EPS tomorrow morning. S's PowerRating is 6.
PowerRatings are courtesy of PowerRatings.net

Labels: BEC, CI, D, Hot Stocks, MOH, PDE, S

A Second Look at Cigna (NYSE: CI - News)
Although Cramer has not liked Cigna in the past, he is taking another look at the non-pharma health care company because of its serious buyback plan. "Nothing is more reassuring than a company that believes in itself," said Cramer, noting that Cigna bought back 20% of the company since 2004 and is shrinking its number of shares so rapidly, it is "practically going private." Cramer declared, "The single biggest bull market is in the nonpharmaceutical health care sector," and he would buy Cigna.

Volcano (NasdaqGM: VOLC), Boston Scientific (NYSE: BSX - News), Johnson & Johnson (NYSE: JNJ - News), and General Electric (NYSE: GE - News)
A great way to play fears over drug-coated stents is to buy Volcano, a company that makes intravascular ultrasound catheters which examine the inside of arteries, according to Cramer. Although this technology is not new, it has been underused until the recent stent controversy. Volcano's largest rival is BSX, which Cramer calls "the Citigroup of healthcare" and Volcano has partnerships with JNJ and GE.

Beware of Tech: Oracle (NasdaqGS: ORCL), Microsoft (NasdaqGS: MSFT), EMC (NYSE: EMC - News), SanDisk (NasdaqGS: SNDK), Seagate (NYSE: STX - News), Western Digital (NYSE: WDC - News), Komag (NasdaqGS: KOMG), IBM (NYSE: IBM - News), Micron's (NYSE: MU - News), Texas Instruments (NYSE: TXN - News), Intel (NasdaqGS: INTC), Advanced Micro Devices (NYSE: AMD - News), Garmin (NasdaqGS: GRMN), Qualcomm (NasdaqGS: QCOM), Cisco (NasdaqGS: CSCO), Hewlett-Packard (NYSE: HPQ - News), eBay (NasdaqGS: EBAY), Apple (NasdaqGS: AAPL), Yahoo! (NasdaqGS: YHOO) and IAC/InterActive (NasdaqGS: IACI)
Cramer devoted his Sell Block segment to warning investors not to touch tech until summer, with a few notable exceptions. "Don't be bamboozled by hopeful analysts," he said, and added ORCL, MSFT, EMC, SNDK, STX, WDC, and KOMG are not buys right now. Cramer said IBM should not be bought until it has some "breakthrough earnings releases" and urged investors to ignore MU's upgrade and to avoid TXN, INTC and AMD. However, the few tech stocks worth buying now include GRMN, QCOM, CSCO and HPQ, EBAY, AAPL and YHOO. Cramer is removing IACI from his list of buys.
CEO Interview: David Snow, Medco Health Solutions (NYSE: MHS - News)
When Cramer asked David Snow how his company makes money off of drugs that go generic, he replied, "In the case of generics, $50 billion of branded drugs are going off patent between now and 2011. We are going to work very hard to appropriately move people from branded drugs to generic drugs, and we make money doing that." On the topic of Medco's cash flow, David Snow said the %5.5 billion buyback program is up and running, and the company might make a future acquisition. Cramer said Medco is the definition of a buy in the current environment.

Labels: AMD, BSX, CI, CSCO, EMC, GE, HPQ, IACI, IBM, Jim Cramer, JNJ, KOMG, Mad Money, MSFT, QCOM, STX, VOLC, WDC, YHOO

Stocks traded mixed, with the Dow Jones Industrial Average ending the day flat. The broader market averages posted modest gains, while technology stocks showed strength today. After initially spiking higher, crude oil prices retreated to slip below $58 a barrel. Bonds moved higher with the yield on the 10-year Treasury note dipping to 4.75%.
The day's economic news was mostly positive. The Labor Department reported that U.S. productivity grew during the final three months of last year. Non-farm productivity grew at a 3.0% rate in Q4, which reversed a revised -0.1% decline in the previous quarter. The National Association of Realtors, meanwhile, said it believes the housing market bottomed out in the fourth quarter and that sales of existing homes will grow over the course of the current year. New home sales are forecasted to slide again during the current quarter before the trend gradually turns positive.
In business news, Cisco Systems (Nasdaq: CSCO - News) paced technology stocks today after posting better-than-expected fiscal Q2 results after last night's market close. Cisco also guided higher for the current quarter, calling increased use of video-downloading services the driver behind growth of its Internet equipment business. Semiconductor stocks were also strong. Market leader Intel (Nasdaq: INTC - News) was up modestly, while smaller players recorded sharp gains. Infineon Technologies (NYSE: IFX - News) gained 10% after announcing that it had won a contract to supply chips to mobile phone maker Nokia (NYSE: NOK - News). Broadcom (Nasdaq: BRCM - News) added 5% on the eve of its earnings announcement, which is scheduled for tomorrow night. The company was also upgraded to "overweight" by Morgan Stanley.
Health insurer Cigna (NYSE: CI - News), whose shares have risen sharply since the middle of last year when concerns over costs sent the stock into a brief tailspin, reported record Q4 profits. The market cap of the Philadelphia-based insurer rose 2% today and reached a new 52-week high in intraday action. Strong enrollment in its medical plans powered earnings of $232 million, or $2.28 a share, which was up 10% from $210 million, or $1.67 a share, a year earlier. Analysts also noted the company's attention to cost discipline, as Cigna's medical cost ratio beat analyst expectations in the quarter. Another major health insurer, Aetna (NYSE: AET - News), will report its earnings tomorrow before the opening bell. An unexpected spike in Aetna's medical cost ratio last year also caused a sharp sell-off from which the stock has partly recovered. Aetna ended up 1% today.
Rupert Murdoch's News Corp. (NYSE: NWS - News) posted a bottom-line earnings decline of -24% in its fiscal Q2, but the previous year's quarterly results contained a gain from the sale of assets. The company reported profits of $822 million, or 26 cents a share, down from $1.1 billion, or 33 cents a share, a year earlier, but 1 cent better than expected. Revenue rose 18% to $7.8 billion. Profits at appliance maker Whirlpool (NYSE: WHR - News) declined -13%. The company said costs from discontinued operations, higher raw material costs, and reduced demand for home appliances contributed to the weak results. Whirlpool earned $109 million, or $1.37 a share, down from $126 million, or $1.83 a share, a year earlier. The loss from discontinued operations in the quarter was -30 cents per share. Revenue was sharply higher, rising to $5.0 billion from $4.0 billion, aided in part by its acquisition of Maytag.
By the BullMarket.com Staff

Labels: AET, BRCM, CI, CSCO, IFX, INTC, NOK, NWS, WHR

Here are 7 options to watch for today. This list comes directly from the TradingMarkets Options Indicators page. The list is created using OptionVue options analysis software.
Most Under Priced Calls: These are the most under priced calls of all stocks in our database. While the Equities Explosion List finds groups of calls for individual equities that are under priced, this list finds the most under priced individual calls. Thus, the options listed here will tend to be more severely under priced.
Cigna Jan 135 Calls (NYSE:CI - News) . CI's PowerRating is 5.
Most Under Priced Puts: These are the most under priced puts of all stocks in our database. While the Equities Explosion List finds groups of puts for individual equities that are under priced, this list finds the most under priced individual puts. Thus, the options listed here will tend to be more severely under priced.
Intuitive Surgical Jan 95 Puts (NASDAQ:ISRG - News). ISRG's PowerRating is 5.
Most Overpriced Calls: These are the most overpriced calls of all stocks in our database. While the Equities Implosion List finds groups of calls for individual equities that are overpriced, this list finds the most overpriced individual calls. Thus, the options listed here will tend to be more severely overpriced.
Baidu.com Jan 125 Calls (NASDAQ:BIDU - News). BIDU's PowerRating is 6.
Most Overpriced Puts: These are the most overpriced puts of all stocks in our database. While the Equities Implosion List finds groups of puts for individual equities that are overpriced, this list finds the most overpriced individual puts. Thus, the options listed here will tend to be more severely overpriced.
NutriSystem Mar 60 Puts (NASDAQ:NTRI - News). NTRI's PowerRating is 6.
Stocks with Abnormal Call Volume: These are stocks which showed unusual call option volume not easily explained by arbitrage operations. The appearance of a stock on the Call Volume Alerts list suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.
Immunomedics (NASDAQ:IMMU - News). IMMU's PowerRating is 5.
Stocks with Abnormal Put Volume: These are stocks which showed unusual put option volume not easily explained by arbitrage operations. The appearance of a stock on the Put Volume Alerts list suggestsan extraordinarily negative earnings report, or other news which may negatively affect the stock.
None Today
Abnormal Put/Call $ Volume: These stocks have the highest dollar put volume in relation to their call volume. These high ratios are indicative of extreme bearish sentiment in the underlying stock.
CIT Group. CIT's PowerRating is 4.
PowerRatings are courtesy of PowerRatings.net

Labels: BIDU, CI, IMMU, ISRG, NTRI, stock options