Day one of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Management Advisory Committees meeting: Purdue Pharma's NDA for Oxycontin.
Anadarko Petroleum (NYSE:APC) to report Q1 earnings; conference call Tuesday at 10:00am.
Tuesday, May 6
Day two of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Mgmt Advisory Committees meeting: Cephalon's (NASDAQ:CEPH) sNDA for Fentora.
Molson Coors (NYSE:TAP) to report Q1 earnings; conference call at 12:00pm.
The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Sotheby's.
Sotheby's (NYSE: BID) is the world's second-largest auctioneer of fine arts, antiques and collectibles, offering property in numerous collecting categories, including paintings, jewelry, decorative arts, and books.
Analysts expect Sotheby's to register strong revenue growth in 2008, with an improving financial position, and modest debt. Furthermore, costs remain reasonable. The Reuters F2008/F2009 EPS consensus estimates for the company are $2.82/$3.14.
MOST NOTEWORTHY: The Restaurant Sector, Blockbuster and Plexus were today's noteworthy upgrades:
Bear Stearns upgraded the Restaurant Sector to Market Weight from Underweight citing better investor sentiment following Fed rate cuts and the economic stimulus plan; upgraded shares include Brinker International (NYSE: EAT), Cheesecake Factory (NASDAQ: CAKE) and Darden Restaurants (NYSE: DRI).
JP Morgan upgraded shares of Blockbuster (NYSE: BBI) to Overweight from Neutral ahead of the company's Q4 results on March 6, as they believe the quarter will be at least in-line and 2008 guidance will be above Street expectations.
Plexus (NASDAQ: PLXS) was raised to Outperform from Neutral at Credit Suisse as they believe current quarter sales and bookings are tracking ahead.
OTHER UPGRADES:
Maxwell Technologies (NASDAQ: MXWL) was upgraded to Market Perform from Market Underperform at JMP Securities.
The firm also raised Sotheby's (NYSE: BID) to Market Outperform from Market Perform.
Goldman Sachs added Allianz AG (NYSE: AZ) to its Conviction Buy List.
The Tales of Beedle the Bard, a book of fairy tales created, hand-written and illustrated by Harry Potter author J.K. Rowling, sold for nearly $4 million at a Sotheby's (NYSE: BID) auction on Thursday.
The book is one of seven copies Rowling made, and she gave the other six away to people involved with the Harry Potter collection. The book had only been expected to fetch about $100,000, but soared far beyond that and was eventually sold to a London art agent for $4 million.
The proceeds will benefit The Children's Voice, which campaigns for rights of children who grow up in institutions, particularly in Eastern Europe. To learn more about the charity, or perhaps make it part of your holiday giving plan, visit its website.
It's impressive to see that the first thing that Rowling released upon the completion of the Harry Potter series was not another book to cash in on her name. In fact, Rowling, who is already a billionaire, won't be making any money from this book.
J.K. Rowling has conducted herself with unbelievable class, and her good works and wariness of diving right into another book should only help build anticipation for her next project.
Harry Potter fans looking for a peak of what the book consists of should head over to Amazon.com, which has a terrific series of photos and a video about the book. More photos and reviews of the stories will be uploaded.
Following a disappointing auction, Sotheby's (NYSE: BID) lost over a third of its value in trading last week. Despite the downfall, Richard Moroney sees an opportunity to "bid" on the shares of the art auction firm.
The editor of Dow Theory Forecasts explains, "Sotheby's plunged in price after disappointing results for a major art auction triggered several brokerage downgrades. Following the drop, the company posted better-than-expected sales for the September quarter.
"However, because of losses on guarantees that Sotheby's provided to sellers in the disappointing auction, earnings were slightly worse than consensus estimates. For the quarter, the company lost $0.33 per share, an improvement from the per-share loss of $0.49 in the year-earlier period.
"Because of the seasonal nature of the art business, Sotheby's typically loses money in the September quarter. The company says it remains optimistic on the outlook for the art market for the remainder of 2007, and it seems Wall Street has overreacted to a single disappointing auction.
"While worries regarding the guarantees that Sotheby's provides and the general health of the art market could keep the stock under pressure in the near term, we view the sell-off as a buying opportunity.
"Trading at 12 times expected 2007 earnings, the stock seems undervalued considering the company's track record and outlook. Sotheby's remains a Best Buy."
Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.
Sotheby's (NYSE: BID) reported operating revenues of $85.1 million for the third quarter on Friday, a 48% increase from the prior period. Operating losses fell to $20.9 million, a 31% improvement. The Q3 gains were primarily the result of higher auction commission revenues and private sales commissions. However, the stock fell on Friday due to worries about recent losses on underperforming auctions. Today, the stock is rebounding strongly as investors had time to digest the overall rosy picture printed in the earnings release. If you think that the company 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 BID.
After hitting a one-year high of $61.40 in October, the stock has fallen considerably this month. BID opened this morning at $34.25. So far today the stock has hit a low of $33.76 and a high of $34.81. As of 11:10, BID is trading at $34.68, up $1.93 (5.9%). The chart for BID looks neutral and deteriorating.
Sotheby's (NYSE: BID), an auctioneer of authentic fine arts and collectibles, is recently down $14.62 to $35.50. Bank of America says, "reducing to Neutral on possible slowdown, heighten risk. Tepid results for major sale suggests cloudier macro outlook for the art market." BID call option volume of 4,735 contracts compares to put volume of 7,837 contracts. BID November 34 straddle is priced at $5.75. BID December option implied volatility of 84 is above its 26-week average of 49 according to Track Data, suggesting larger risk.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Troubled Sprint Nextel Corporation (NYSE: S) is searching for a replacement for CEO Gary Forsee, and expects to have a new person in place by December, reported the Wall Street Journal.
Two Bear Stearns Companies (NYSE: BSC) collapsed mortgage related hedge funds, that lost $1.6B, have drawn an investigation from the U.S. attorney in Brooklyn, NY, reported the Wall Street Journal.
The Financial Times reported that the U.K. economy will be affected by the global credit crisis, according to Chancellor of the exchequer Alistair Darling, who said that while the U.K. economy is in a strong position to ride out the impact, growth projections will be lowered from the current 2.5%-3%.
Sotheby's (NYSE: BID) has benefited from Wall Street's equity market gains, with high-end investors piling money into art, and Rommel Dionisio of Wedbush Morgan Securities sees the stock going to $60 in a year.
Amid concern that it might miss the Street's Q3 forecast, is Polycom (NYSE: PLCM) oversold at $26? Yes, says Greg MacArthur, president of investment outfit Viewpoint2000.
Stereotaxis (NASDAQ: STXS) makes a computerized magnetically controlled navigation system that guides devices used in minimally invasive cardiac arrhythmia surgery, and Standard & Poor's rates the stock a Buy, in part because of its order backlog of $55 million.
Launched on July 30th, Claymore/Robb Report Global Luxury (NYSE: ROB) is an exchange-traded fund that, according to Paul Trach, targets the upper crust of the consumer discretionary sector.
The editor of The ETF Authority notes that the fund is designed to track the performance of the world's premium luxury companies, with a portfolio that looks like a who's who of luxury brands.
The specialty index tracked by the fund, he notes, was constructed by Robb Media, which manages a number of publications aimed at the ultra-affluent. Tracy says, "Robb has its finger on the pulse of the world's wealthiest individuals."
And with stakes in countries like France, Switzerland, Italy, and Germany and holdings in such companies as Hermes, Porsche, and Harry Winston, he notes, "ROB offers global exposure to some of the world's most iconic companies."
The Journal reports: "The sheer volume of works planned for sale is fueling the nervous buzz. Christie's has estimated the works it will have on the block at its major London sales in October at $154 million -- compared with the $83 million it made at those sales last year and $33 million in 2005. Sotheby's is selling 387 works at its London auctions next month, compared with 254 last year and 206 the year before."
Subprime woes and reduced Wall Street bonuses may have reverberations in the art market. Last week I wrote that hedge fund honchos are getting cheap -- no longer shelling out for the pricey real estate like they once did.
It looks like the art market could get very weak. The combination of hedge fund/private equity bosses becoming suddenly tight-fisted, and the potential for a supply glut could spell trouble.
But so far, the stock market doesn't appear to be worried. Shares of Sotheby's (NYSE: BID) are pretty close to an all-time high, but have exhibited great volatility during past periods of economic weakness. After reaching into the $40s in 1999, shares of the auctioneer sank into the single digits in 2002, perhaps aided by a price-fixing scandal.
The market rallied strongly on the Fed's announcement today and shot up about 2.5%. The Fed, chaired by Bernanke, cut rates by one half point surprising Wall Street which only expected a quarter point cut.
To excerpt the Feds announcement: "Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time."
The NYSE had volume of 3.6 billion shares with 3,013 shares advancing while 345 declined for a gain of 301.28 points to close at 9,909.03. On the NASDAQ, 2.1 billion shares traded, 2,359 advanced and 657 declined for a gain of 70.00 to 2,651.66.
While the market plummeted 311 points today on loan worries; it is easy for people to forget the market is still up. Last week when the Dow broke 14,000; it was up 12.3% for the year. Now the market is up 8.1%. But are we really in a crisis? Market corrections are a normal part of the action and we will live through it. People celebrate when their favorite retail stores have a sale and drop prices; but when the stock market has a sale they panic.
The NYSE had volume of 4.2 billion shares with 313 shares advancing while 3,036 declined for a loss of 275.98 points to close at 9,654.38. On the NASDAQ, 3.5 billion shares traded, 553 advanced and 2,583 declined for a loss of 48.83 to 2599.34.
The options market saw about two and have time normal activity with 11.3 million puts and 8.6 million calls for a put call ratio of 1.3. A lot of this volume was on the indexes we usually ignore index option volume because it isn't that interesting by the PowerShares QQQ Trust ETF (NASDAQ: QQQQ) saw heavy volume on the August 50 calls (QQQHX) with over 109,815 options trading and the 49 calls (QQQHW) moved over 84,000 contracts. On the put side of things there were a lot of people buying insurance with the August 48 puts (QQQTV) moving 147,000 options trading and the August 49 puts (QQQTW) counted over 122,000 options traded. Apple Computer (NASDAQ: AAPL) saw heavy volume on the August 150 calls (APVHJ) with over 74,816 options trading as the stock moved up 6% today. General Motors (NYSE: GM) saw heavy volume on the January 40 calls (GMAH) with over 33,000 options trading.
Kevin Kersten is an Options Analyst with InvestorsObserver.com. Mr. Kersten does own Office Depot Stock.
The markets pulled in more gains today as the Dow again pushed for a record close. Bausch & Lomb Inc. (NYSE: BOL) jumped $6.00 (10%) to $67.50 on news of a buyout. Citigroup (NYSE: C) rose $2.12 (4%) to $54.91 after news that Lapert –a hedge fund manager- was building a large stake in the company is expected to push for changes. Sotheby's (NYSE: BID) fell $2.62 (-5%) to $45.13 on a downgrade.
The NYSE had volume of 2.8 billion shares with 2,058 shares advancing while 1,213 declined for a gain of 60.7 points to close at 9,825.43. On the NASDAQ, 2.1 billion shares traded, 1,790 advanced and 1,234 declined for a gain of 22.13 to 2,547.42.
ConocoPhillips (NYSE: COP) pays a dividend tomorrow and saw a ton of dividend arbitrage today. The May 65 calls (COPEM) moved over 776,000 contracts while the May 70 calls (COPEN) with over 326,000 options trading. Even the ConocoPhillips May 60 calls (COPEL) tallied 193,000 options contracts. There were 7 million calls traded today so those three strikes on COP represents about 18% of the total equity call volume. Other stocks with active options include United Parcel Service (NYSE: UPS) saw heavy volume on the May 70 calls (UPSEN) with over 80,000 options trading. Citigroup Inc. (NYSE: C) saw heavy volume on the May 55 calls (CEK) with over 31,000 options trading. In options there were 5.3 million puts and 7 million calls traded for a put/call open interest ratio of 0.75
Disclosure note: Mr. Kersten owns and or controls a diversified portfolios of long and short positions that may include holdings in companies he writes about.
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Monday, May 5
The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Sotheby's.
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The Tales of Beedle the Bard, a book of fairy tales created, hand-written and illustrated by Harry Potter author J.K. Rowling, 
Sotheby's
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Launched on July 30th, 
While the market plummeted 311 points today on loan worries; it is easy for people to forget the market is still up. Last week when the Dow broke 14,000; it was up 12.3% for the year. Now the market is up 8.1%. But are we really in a crisis? Market corrections are a normal part of the action and we will live through it. People celebrate when their favorite retail stores have a sale and drop prices; but when the stock market has a sale they panic. 
The markets pulled in more gains today as the Dow again pushed for a record close. 
Naked Truth Investing: You should be in or out of the markets, but never on the sidelines
Comfort Zone Investing: Sifting for winners in the financials
For blue chip buyers: 'This too shall pass'
