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Super Bowl XLIII:
Pittsburgh Steelers 27, Arizona Cardinals 23The Super Bowl is over and the Pittsburgh Steelers are the new World Champions. In one of the most exciting Super Bowls ever, the Steelers came from behind to win with an amazing last-minute, touchdown catch by Santonio Holmes.
But you already knew that. However, you may not have noticed that the Steelers weren’t the only champs from Sunday night. Take a look at these other “big game” winners:
- 98.7 million viewers watched the game on Sunday — the most-watched Super Bowl ever — keeping the NFL’s premier event at the top of the TV ratings.
- Advertising time went for $3 million for a 30-second spot — a new Super Bowl record and bonanza for NBC.
- Monster.com and Doritos were declared the big “advertising” winners.
- The creators of the Doritos “shot to the crotch” ad won $1 million.
- Bruce Springsteen rocked out at halftime in front of a big audience, something sure to boost his new album and upcoming concert tour sales.
- And Tampa was a winner, picking up a windfall of $150 million in spending when other big cities across the country are in a deep recession.
You, too, can be a Super Bowl winner. In case you missed it, our OptionsZone experts put together 12 “Super Bowl Smash-It-Up” Trades for you. From “sure” winners to a couple of long shots, here are 12 smart trades to play for profits in the coming days and weeks ahead.
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Super Bowl Trade I: Buy Wal-Mart (WMT)
Consumers rollback spending and WMT wins
By Nick Atkeson and Andrew Houghton
With the weakest economy, we’ve never been more inclined to stay at home to watch the big game. Watching the Super Bowl at home is essentially free, but grabbing all those party supplies for your hungry, stay-too-long friends isn’t.
What is a fan to do? Go to Wal-Mart (WMT) to get those party supplies at the best possible price.
Wal-Mart started the year with a disappointing earnings and guidance report on Jan. 8, and its shares are on sale, like many items in its stores. The stock is down this year from about $58 per share to about $48.
Despite having pulled back almost 20%, the company continues to grow earnings. Trading at about a 14 P/E, earnings are expected to be $3.35 for this fiscal year ending January and $3.59 for next year.
The trends are in Wal-Mart’s favor. Management has done an excellent job of refocusing the company on fundamentals. And as shoppers watch every penny, they will spend more of their disposable income at discount retail stores rather than high-end retailers
Buy Wal-Mart (WMT). For those experienced option traders, we recommend selling the WMT Feb 47.50 Puts (WMTNW) for $1.65 or better.
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Super Bowl Trade II: Short Best Buy (BBY)
Circuit City’s loss is not their gain
By Michael Shulman
I’ll be watching on my 6-year-old big screen — the one thing I’ll have in common with most of the NFL’s 1,590 players. I did go to Best Buy (BBY) last week to check out the Super Bowl sales, and I got lots of attention because no one else seemed to be shopping. Analysts have bid up Best Buy since competitor Circuit City announced it was liquidating, and man, are they wrong. There are no complicated products that people can afford requiring sales people to help — so you can get the Sony flat panels at discount stores.
And even Costco and Wal-Mart say they are having troubles selling big-ticket items. Best Buy is up 40% in the past few weeks but it’s time for the shares to go back down again.
Short Best Buy. (BBY). And if you go short BBY, only buy puts.
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Super Bowl Trade III: Buy General Electric (GE)
Is it Immelt, or is it Memorex?
By Bryan Perry
The slogan goes “GE, We Bring Good Things To Life.” If only GE could bring to life its common shares, now trading at $12 and sporting a 10.3% dividend yield. Holy Mackerel! CEO Jeff Immelt pulled out his sword recently to declare war on the short sellers of his company’s stock. After all, GE is a triple-A rated company … right?
A double-digit yield on GE? Here is the quote of the year, and it’s only late January. “The first-quarter dividend is done, and we are committed to our plan for $1.24 per share for the year. We believe the GE dividend provides our investors with a solid return in this uncertain time,” Immelt said.
OK, so here’s the deal. The company ended 2008 with $172 billion of infrastructure equipment and services backlog and $48 billion in cash. I say they make the turn. They operate in industries where big spending will occur. That said, buy the stock for 3-point move to $15 (25%) over the near term on any rally and lock in a 100-watt dividend yield.
Buy General Electric.(GE)
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Super Bowl Trade IV: Buy Apollo Group (APOL)
University of Phoenix parent rises like the mythical bird
By Chris Johnson and Jon Lewis
Phoenix-based Apollo Group (APOL) offers high school, college and graduate educational programs and services through various subsidiaries, including the University of Phoenix (the namesake of the Cardinals’ home turf). It’s a good space to be in these days, as laid-off workers and those fearful of layoffs look to enhance their attractiveness to a dwindling number of employers.
Apollo boasts a strong balance sheet, thanks to solid enrollment growth and expanding margins. The company is also actively expanding through acquisition, especially globally. In short, APOL is doing the right things in the right space at the right time, and that was demonstrated by the company’s recently earnings report that blew out analysts’ expectations.
The price chart bears out Apollo’s recent success. The stock was one of very few winners in 2008, gaining around 9%. Currently, the shares are pulling back to solid technical support, which makes for an ideal entry point.
Buy Apollo Group. (APOL)
7 Reasons to Make Options Trading Part of Your Portfolio–By Chris Johnson and Jon Lewis
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Super Bowl Trade V: Buy Google (GOOG)
Missed the highlights? Google, then catch ’em on YouTube
By Nick Atkeson and Andrew Houghton
It is no surprise that we will see beer and car ads dominate commercial time during the Super Bowl. What may be of more interest is that of the list of total Super Bowl advertisers, about 30% of them are dot-com type companies. Maybe even more interesting, those dot-com advertisers do not include Yahoo, Google, Microsoft, or any of the other really dominant dot-com players. The list is made up of companies like E*Trade Financial and GoDaddy.com
The point is this: A decade after the dot-com boom, the Internet keeps growing up. The best-positioned and most-exposed company to current and future Internet activity is Google. Google just reported a better-than-expected quarter and continues to grow at a crazy pace.
During the past year, the company’s revenues grew more than 30%, and by the end of 2010, their revenues are expected to be another 30% higher. In this down market, you have an opportunity to buy this earnings-beating company for a 16 P/E. (If you pull the cash out, the P/E drops to about 14.) The stock is down more than 50% from the highs.
The final point to make on Google and the Super Bowl is that many viewers, like us, will miss many of the commercials. Bathroom breaks, sloppy friends, loud children are among a few of the distractions. On Monday, when we go to work, we will be Googling all those crazy ads we just missed and watching them on YouTube — which is owned by Google.
Buy Google. (GOOG)
Read Nine Winning Trades for 2009 by Nick Atkeson and Andrew Houghton
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Super Bowl Trade VI: Buy H.J. Heinz (HNZ)
‘Anticipation’ is the word for company shareholders
By Chris Johnson and Jon Lewis
Playing the “hometown favorites” for Steelers fans can be as easy as taking the lead from one of the city’s landmarks. Let’s start with the most obvious — Heinz Field.
Whether it’s the power of its location — the confluence of the mighty Three Rivers – or the intimidation of the yellow seats inside, Heinz Field represents strength. There must be some connection to Heinz (HNZ) the company, because the stock gained 17% in the three months following the Steelers’ last Super Bowl victory in 2006 (the market went up only 2%).
It’s worth noting, especially now, that Heinz and other consumer staples companies are less likely to be punished by a declining economy. We’re anticipating (a shameless attempt at ripping off the company’s famous “Anticipation” ad campaign) some good things from HNZ after the Steelers play in the big game.
Buy H.J. Heinz. (HNZ)
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Super Bowl Trade VII: Buy H&R Block (HRB)
Fire the High-Priced CPA, because ‘You got People’ at H&R Block
By Bryan Perry
During the current downturn, investors everywhere are cutting back on high-priced services, instead seeking out full-service deals at discounted prices. Enter H&R Block (HRB) for the current tax season.
I think these guys are going to print money this year as taxpayers flock to inexpensive professional tax services. It’s all part of the fallout and some businesses see an upswing because of tough times, discount tax professions being one of them.
New tax laws affecting dozens of tax-deductible categories have taxpayers wanting outside help to maximize all eligible write-offs, not wanting to miss out on meaningful deductions that more than pay for the services rendered.
Buy H&R Block. (HRB).
What does Bryan Perry have to say about a simple mistake when trading LEAPS?
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Super Bowl Trade VIII: Short MGM Mirage (MGM)
Plenty of rooms to fill — but no takers
By Michael Shulman
In an economy like this, is anyone going to the game? Yes — but Pittsburgh people will stay in their cars (hotels are too expensive) and the Arizona people will stay in foreclosed houses (so they should feel right at home).
Speaking of hotels — short ’em. I received an e-mail from the Mirage in Las Vegas to come out to watch the Super Bowl for $69 a night. Last time I was there for the Super Bowl, maybe 15 years ago, it was about $400 a night. The Mirage is owned by MGM Mirage (MGM), which is hovering at a technical support price. Once it breaks through, look out.
I am not traveling to Tampa or Las Vegas — I am staying at home for the big game. And I’m shorting MGM.
Short MGM Mirage.(MGM)
FREE Report–Learn how Micheal Shulman makes money in this market!
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Super Bowl Trade IX: Denny’s (DENN)
The shares are priced like Grand Slam Breakfast
By Bryan Perry
When shares of Denny’s (DENN) are trading at half the price of a Grand Slam Breakfast, I gotta jump in my car and get down to Denny’s and see what’s gone wrong. Problem is, nothing has gone wrong. They are just as crowded as ever, especially during this recession. They represent a full sit-down meal destination at fast-food prices. And the portions are big.
Look, the company has totally restructured, selling off franchises and keeping all the best locations for its own portfolio, and the results are pouring in. On Jan. 15, 2009, the company said it expects to meet or exceed its previous guidance for full-year 2008, thanks to the success of the Franchise Growth Initiative (FGI) and other cost-saving actions that protect margins and cash flow. With the stock trading at $1.50 per share, it’s time to consider whether Denny’s (DENN) is some low-hanging fruit ready for the picking.
Buy Denny’s. (DENN).
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Super Bowl Trade X: Buy Grupo Televisa S.A. (TV)
Capturing the passion of the world’s most-popular sport … futbol
By Nick Atkeson and Andrew Houghton
One billion people will be watching the Super Bowl but 5.7 billion others couldn’t care less. In the United States, we love football — the rest of the world, loves futbol (soccer).
Grupo Televisa produces television channels that reach subscribers in 60 countries throughout Latin America, the United States (via Univision), Canada, Europe and Asia Pacific.
This company won’t be blinded by the Super Bowl hype. Last year, TV yanked NFL games, including the Super Bowl, off the air in Mexico for the whole season after a 35-year run because they felt they were overpaying for the broadcast rights. The NFL felt the Latin heat and entered into new deal terms for the season that began in September 2008.
TV has shown steady revenue and earnings growth during the past several years and is expected to keep growing through 2010. With its advantageous market position and growth characteristics, it is trading at a P/E of about 12. Ay, caramba!
Buy Grupo Televisa (TV). For the experienced option trader, buy the TV April 15 Calls (TVDC) for $2.
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Super Bowl Trade XI: United States Steel (X)
Pittsburgh company forged by fire in 2008, looks for better 2009
By Chris Johnson and Jon Lewis
You can’t talk about the Steelers and the stock market without thinking about U.S. Steel (X). The company’s headquarters pierces the Pittsburgh skyline like the Steelers’ defense pierces opposing offensive lines.
The U.S. steel industry has been dramatically affected by the global economic slowdown, as demand for autos, buildings and other steel-based products has declined rapidly. As a result, X is now trading at $30 after hitting a high of almost $200 in June 2008. That’s an 85% decline in seven months.
But X has been trying to root out a bottom around $25 for the past three months. From our perspective, the long-term potential for X is becoming more positive. And for what it’s worth, X gained 25% in the three months following the Steelers’ last Super Bowl victory.
Buy U.S. Steel.(X)
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Super Bowl Trade XII: Short Allergan (AGN)
Cosmetic procedures deflate with economy
By Michael Shulman
What would a Super Bowl be without scantily clad, all-American cheerleaders patrolling the sidelines? Well, the Pittsburgh Steelers don’t have cheerleaders — neither did my New York Giants — but Arizona does.
When I look at all these wholesome moms, students and lovers of world peace, I think of a crowded and declining market — cosmetic surgery. Take a look at Allergan (AGN). It’s a great company with diverse product lines, but it generates a lot of profit providing a new look for aspiring cheerleaders and other women looking to project themselves in a different way. The stock bottomed, popped and could go back to its bottom in 2009.
Short Allergan. (AGN)
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12 “Smash-It-Up” Winning Super Bowl Trades
There you go. 12 “Smash-it-up” Super Bowl trades for you to play from our optionszone.com experts.
Feel better? You could’ve gone off and blown your money betting on one team to win or points scored or who wins the coin flip . . . the side bets go on and on.
Or, can you can get ready to play it smart and trade the “Super Bowl” trades for profits. Good luck.
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