Beacon Power, RadioShack, and Saks
CINCINNATI--(BUSINESS WIRE)--Aug. 8, 2005
Among the stocks featured in the August 8 edition of
Schaeffer's Market Blog are McDonald's (NYSE:MCD), Alcan (NYSE:AL),
Beacon Power (NASDAQ:BCON), RadioShack (NYSE:RSH), and Saks
(NYSE:SKS). Schaeffer's Market Blog is just one of the many free
market commentaries written everyday at www.SchaeffersResearch.com -
the home of Bernie Schaeffer and Schaeffer's Investment Research. The
Market Blog is written throughout every trading day by Schaeffer's
financial analysts and traders. They are quick insights to the day's
most notable market activity from an options perspective. For
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Schaeffer's Market Blog for Monday, August 8, 2005:
Below are just a few of today's Market Blog entries. Click here to
read all of today's Market Blog.
12:24 PM McDonald's Trades Higher on Positive Same-Store Sales
Shares of McDonald's (NYSE:MCD) are trading higher today after the
company reported an increase in July same-store sales of 4.9 percent.
Technically speaking, MCD has recently broken above its declining
short-term moving averages. The stock had been in a steady decline
from mid-March through early July. MCD is now trading above its short-and intermediate-term moving averages, a positive sign from a
A check on sentiment indicators reveals mostly optimistic feelings
from investors. Short sellers have not made big bets against the
stock, as MCD sports a short-interest ratio of 1.39 days to cover.
Financial analysts hold the shares in high regard, as there are 12
"buy" ratings, seven "hold" ratings and no "sell" ratings on MCD.
Option players are a bit more skeptical, as they hold 38,700 open puts
compared with 40,700 open calls in the near term. As contrarians, we
like to see more signs of skepticism in a security's sentiment
backdrop to ensure there is still money remaining on the sideline that
can flow into the stock and push its price level higher. Today, MCD is
trading 90 cents higher to $32.20.
3:17 PM Alcan Soars on Strong Earnings
Alcan (NYSE:AL) has rallied nearly three percent this afternoon
following its earnings report. The company posted second-quarter
earnings of $208 million, or 56 cents per share, down 77 cents per
share for the same period a year ago. On an operating basis, excluding
foreign currency balance sheet translation and other items, the
company earned $286 million, or 77 cents per share, in the latest
quarter. Sales for the quarter tumbled to $5.21 billion from $6.21
billion in the same period a year earlier. The Street had predicted a
gain of 61 cents per share on revenue of $5.18 billion. Acting CFO
Michael Hanley attributes the company's better-than-expected results
to bauxite and alumina business, as well as engineered products
business. The firm supplies aluminum products to Airbus. Technically
speaking, the shares have pulled back from their intraday high of
34.82, but continue to hold above former resistance at the 34 level.
3:29 PM A Beacon of Hope
In skimming the list of stocks seeing the heaviest trading volume
on the Nasdaq, I saw the usual list of suspects: Microsoft (MSFT),
Cisco Systems (CSCO), and the Nasdaq-100 Trust (QQQQ). But Beacon
Power (NASDAQ:BCON) has slipped into the top five. A quick search
revealed that the firm makes technology aimed at preventing power
disruptions on electrical grids. The firm's flywheel energy storage
systems provide uninterruptible electric power for communications
networks, computers, industrial manufacturing, and other generation
applications. The stock notched a multi-year high this afternoon,
soaring more than 32 percent. BCON and several other power companies
are enjoying a boost today on speculation that the legislation that
President Bush signed today regarding the nation's energy problems
could prove to be a boon to several members of the sector.
3:51 PM Pop Go Some Retailers
Fitch Ratings decided to revise its outlook on RadioShack
(NYSE:RSH) to "negative" from "stable." Fitch made this move after the
retailer repurchased 20 million shares for roughly $500 million, which
was financed with $300 million in short-term borrowing and $200
million in cash. Fitch stated that the negative outlook considers the
magnitude of the share repurchases, projected to total $625 million in
2005. This amount represents a significant acceleration in the pace of
share buybacks. The brokerage's lowered outlook also takes RSH's
weakened operating results, primarily in the wireless business, into
consideration. Furthermore, there may be store disruption from the
transition to Cingular from Verizon (VZ) at the end of 2005. RSH has
gained more than 2.5 percent thus far in today's trading.
RSH was joined on the upside in the retail sector by Saks
(NYSE:SKS), which saw shares jump as much as 15 percent but have
backed off to a gain of more than nine percent. The news propelling
SKS higher is a report in Women's Wear Daily that Bon-Ton Stores and
Cerberus Capital Management are combining for a possible bid in the
range of $28 to $30 per share. A bid that size represents a
38-to-48-percent premium above Friday's close of $20.25. Gap (GPS) has
also increased thanks to September option activity that came in higher
The above are just a few of today's Daily Market Blog entries.
Click here to read all of today's Daily Market Blog.
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