Bristol-Myers Squibb (BMY) is likely to get to a return to normalcy in stock trading again as it is now past the December options expiration where it had over 900,000 contracts in the DEC $30 Calls and Puts still in the open interest. This was based upon traders making bets around the Mead Johnson Nutrition (MJN) spin-off and due to index rebalance changes.
Jabil Circuit Inc. (JBL) reports earnings after the close on Monday and Thomson Reuters has estimates at $0.29 EPS and $3.11 billion in revenues. The electronics manufacturing services company trades with a forward multiple of 12.6 times blended earnings, but EMS stocks usually trade with cheap multiples and the stock is both well exponentially above 2009 lows and close to 52-week highs.
OSI Pharmaceuticals, Inc. (OSIP) fell four days in a row last week to end up with a cumulative 12% loss after an FDA panel recommended against Tarceva as a first-line maintenance program for certain lung cancer patients. Thomson Reuters estimates for 2010 only came down to $1.62 EPS from $1.66 EPS a week before, so with this one closer to 52-week lows it will be worth taking a closer look on Tuesday after the rest of the analysts have trimmed earnings estimates..
Red Hat Inc. (RHT) reports earnings on Tuesday and is trading right at fresh highs. Thomson Reuters has estimates pegged at $0.16 EPS and $188.49 million in revenues, and while this used to be a takeover target the valuations are now very high and this one almost certainly has to really beat estimates and raise guidance to keep everyone happy.
Sequenom Inc. (SQNM) will have an interesting week ahead of itself. The allegations last week that it had used fraud in its controversial and widely questioned test results will make this an outright avoid. The $57+ million in liquidity here should probably be considered “all restricted cash” now… at best. Rather than taking unlimited risk by being short the stock betting against an outright implosion of Sequenom, the best leverage or bang for your buck looks to be the March 2010 $2.00 Puts at $0.10 for purely risk-based capital.
Visa Inc. (V) had a massive run-up last week based on its going into the S&P 500 Index, something which many S&P 500 Index funds (and traders who front-run those index changes) should have easily anticipated considering its $60+ billion market cap. Its cumulative gain of the last week was 9.4% and it had no down days once during the last week. Visa had a volume explosion with over 84 million shares traded hands on Friday’s index change alone. The only day EVER with more volume was its IPO date of March 19, 2008 for over 177 million shares. Generally speaking, stocks back at new highs on record trading volume merely on index chasing trades see a give-back of gains.