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  • Perrigo - A Prime Buying Opportunity [View article]
    7:58 AM Perrigo Company (PRGO):

    FQ3 EPS of $0.50 beats by $0.05. Revenue of $506M (+5.3%) vs. $527M. Issues upside EPS guidance for FY '09 of $1.80-1.90, vs. previous guidance of $1.75-1.90.

    Shares +4.3% premarket.
    May 7 08:11 AM | 5 Likes Like |Link to Comment
  • ADP: Getting Paid For Walking Away [View article]
    Instead of 'nibbling' trying to make $1.00/share with the June $35 puts why not sell the Jan. 2010 $35's for $3.10 /share or the Jan. 2011 $35's for $5.20.

    The longer the time to expiration the more likely we'll see a rebound in employment figures that will help ADP gain revenues and profits.

    Thus, longer term options look safer than short term ones and they offer much better up-front premiums plus tax deferral into April 2011 or April 2012 if you let these go to expiration dates.
    May 7 05:59 AM | 3 Likes Like |Link to Comment
  • Value Investing Congress: Charles de Vaulx Favors Nestle, SECOM, Japan and Gold [View article]
    As always, after a huge fall in stocks these geniuses tell people to avoid risk.

    That would have been good advice 18 months ago but has been exactly the wrong advice since either November 20th or March 9th.

    May 7 05:52 AM | 1 Like Like |Link to Comment
  • McDermott International: A Triple Play that Might Score [View article]
    WEDNESDAY, MAY 6, 2009
    WEEKDAY TRADER - Barrons.com

    An Energy Play With a Safety Net
    By NAUREEN S. MALIK

    McDermott International, a leading engineering-and-constr... firm, is a different kind of oil and gas stock.

    IT LOOKS LIKE THE energy sector has entered a new phase, thanks to rising oil and gas prices.

    Still, for those investors reluctant to bet directly on movement in commodity prices, there are energy stocks that are more defensive in nature.

    Take McDermott International (ticker: MDR), a leading engineering-and-constr... company focused on the energy sector.

    McDermott plays a supporting role in the business of drilling for fossil fuels. After an offshore well has been drilled, the company installs drilling platforms and builds pipelines needed to extract and transport oil and natural gas. It also provides utilities with "after-market" maintenance and parts, and is a leader in retrofitting coal-fired plants with cleaner technology.

    At a Glance:
    McDermott International (MDR)

    Stock Price: $17.60
    52-Wk High: $67.14
    52-Wk Low: $5.98
    Market Cap: $4.02 billion
    Est. 2009 EPS: $1.49
    2009 P/E: 11.8x
    Est. Long-Term EPS Growth: * 11%
    Est. ('09/'08) EPS Growth: -20%
    Revenue (trailing 12 months): $6.6 billion
    Dividend Yield: None
    Chief Executive Officer: John A. Fees
    Headquarters: Houston, Texas

    *Based on analyst estimates looking ahead three to five years.
    Sources: Thomson Reuters, Barrons.com
    The company also manages the U.S. government's nuclear labs and clean-up sites, backed by federal stimulus funding.

    While growth has slowed, McDermott is sustaining a backlog near record levels, thanks to steady demand from its customers, including major integrated and national oil companies, large U.S. utilities and Uncle Sam.

    McDermott "is one of my top picks; you have a very well-positioned diversified infrastructure play, and [its] financial health is very strong," says Lazard Capital Markets analyst Graham Mattison.

    But the thorn in McDermott's side has been a Middle East pipeline project the company is involved in. High inflation in Qatar and unfavorable weather conditions that delayed construction have caused costs to run up and have compressed margins for this fixed-price contract.

    McDermott has "been punished by investors and it is trying to rebuild its credibility," says Broadpoint AmTech analyst Will Gabrielski. As the company addresses the pipeline problem, he says the stock looks "very attractive and it will be an outperformer over the next year or two."

    The stock has rebounded from a low of $5.68 in November 2008 to close at $17.60 Wednesday after taking a hefty charge in the fourth quarter and issuing a favorable progress report for the Qatar pipeline in March. But shares are still down 68% over the past 12 months.

    Trading at 11.8 times 2009 and 9.4 times 2010 earnings estimates, the valuation looks attractive for investors seeking to play an aggressive build-out in energy infrastructure.

    The International Energy Agency estimates that more than $26 trillion will be needed to be invested in energy infrastructure through 2030 to meet rising global demand.

    Roughly half of the company's revenues come from its oil-and-gas unit, 40% from the power-generation division and the rest from government contracts, the fastest-growing segment. International projects made up more than half of revenues.

    Unlike other engineering-and-constr... companies, McDermott is well entrenched in major offshore energy projects and is one of the few global contractors that can provide services from the design phase through construction.

    McDermott is involved in long-term projects where well-funded customers are racing to replace depleting reserves. Plus the offshore work is tied to wells that have been drilled years ago and is already accounted for in spending budgets.

    Earnings and backlog growth is expected to be flat or slightly positive this year, but a recovery in margins will be the lead story for this unit. The Qatar pipeline project, with break-even operating margins, caused the oil-and-gas unit's margins to fall from 10%-12% earlier in 2008 to 1.8% by the end of the year. An uptick to 2% and improved execution could help the stock recover when the company reports first-quarter results on May 11, says UBS analyst Steven Fisher.

    Readers can get intraday updates on the performance of Barron's and Barrons.com's stocks picks and pans on this Website barrons.com/stockpicks
    Overall, contract-award activity is showing signs of improvement, and will likely pick up later this year or in early 2010 amid stabilizing commodity prices and optimism about the economy, says Andy Kaplowitz, director of equity research at Barclays Capital.

    McDermott won an offshore Saudi gas project, estimated at $1.2 billion, in the first quarter. It could boost the contract backlog to $10 billion, from $9.8 billion at the end of 2008, and go a long way in reassuring investors, Kaplowitz says.

    As a leader in providing carbon-capturing and nuclear technology, McDermott is also a longer-term play on carbon legislation and the anticipated increase in new power plants, once Washington sets the rules. McDermott is also pursuing more international projects.

    Meanwhile, half of the power-generation unit's revenues come from providing utilities with maintenance parts and services.

    This steady revenue stream, plus regular fees earned from government contracts, creates a "valuation floor" for the stock in the low teens, Kaplowitz says.

    There's some comfort in that.
    May 7 05:48 AM | 3 Likes Like |Link to Comment
  • Riding Coach for First Class Returns [View article]
    You recommend MO everyday, everywhere and under multiple names. I've never seen you put out a sell on MO ever.
    May 6 06:25 PM | 2 Likes Like |Link to Comment
  • Riding Coach for First Class Returns [View article]
    Dividend Day-Trader,

    Just for apples to apples I looked up the historical prices for your favorite stock MO and COH for the period Jan 1, 2008 through May 5, 2009.

    Here are the results [as per Yahoo Finance historical prices]:


    ..........Jan. 1, 2008............May 5, 2009 ......... % Change

    MO .... $21.32 ................... $16.06 ................(-24.67%)

    COH ..$30.55 .................... $25.42 ................(-16.79%)


    What's was your poiint?
    May 6 04:27 PM | 2 Likes Like |Link to Comment
  • Riding Coach for First Class Returns [View article]
    Dividend Day-trader,

    I am eagerly awaiting your first officially santioned published article here on SA.

    Don't you have anything substantial to contribute?
    May 6 04:00 PM | 2 Likes Like |Link to Comment
  • How I'm Trading V.F. Corporation Given Negative Quarters Likely Ahead [View article]
    Howard,

    I almost always try to select underlying securities that are trading well below their historical normal multiples already.

    I often do assume a partial rebound to more typical P/Es but I never count on going back to the peak levels of 2000 - 2007.

    May 2 01:09 PM | 2 Likes Like |Link to Comment
  • Varian Medical: Outstanding Results at a Bargain Price [View article]
    VAR has experienced many tradable dips in the past 5 years.
    Each time when they sold off people thought there was no 'near term catalyst' yet here are the high-low-high cycles...

    Year..........High....... Low..... Next High...... Change
    2004 .......$46.50 ..........$29.60 ..............$52.90 .......... +78.7%
    2005 .......$52.90 ..........$41.10 ..............$61.70 .......... +16.6%
    2006 .......$61.70 ..........$37.30 ..............$65.84 .......... + 99.0%
    2009 .......$27.10............ N/A ..................TBD ...............????

    If you wait for the 'good news' you'll miss the best buying opportunities.
    May 1 09:29 AM | 3 Likes Like |Link to Comment
  • Possible NYSE Euronext Options Trade [View article]
    NYSE GROUP (NYX): Q1 EPS of $0.43 beats by $0.04. Revenue of $1.1B (+0.2%) in-line. (PR)
    Apr 30 08:31 AM | 1 Like Like |Link to Comment
  • Possible NYSE Euronext Options Trade [View article]
    SJD,

    Very true, and if the shares go way up you make the best-case return which is pretty spectacular.
    Apr 29 11:55 AM | 1 Like Like |Link to Comment
  • State Street: A Bankable Proposition [View article]
    Owen,

    Is a best case scenario profit of 393% not enough upside for you?

    Apr 28 03:27 PM | 2 Likes Like |Link to Comment
  • State Street: A Bankable Proposition [View article]
    If you believe State Street is going to zero you shouldn't buy the shares or sell the puts.

    I noted clearly this play is strictly for those who believe in the long term survival and health of STT.
    Apr 28 09:28 AM | 2 Likes Like |Link to Comment
  • Warren Buffett gets many things right, but Andy Kern of Berkshire Ruminations says his stance on the U.S. debt bubble - that "we'll be fine in the long run" - is wrong. "How will we be living when 75% of our GDP is committed to simply servicing our national debt?"  [View news story]
    The public pension - medicare/social security issues are the things that will bring down America.

    Government workers of all types- teachers, cops , firefighters, military and especially civil servants are almost the on ly people earning full lifetime pensions and benefits these days.

    They are the most OVERPAID segment of society and feed at the taxpayer trough.


    Apr 26 04:45 PM | 3 Likes Like |Link to Comment
  • Apollo Group Inc. – Profit from a ‘For Profit’ [View article]
    As with any position, you can close out options and/or sell shares whenever you think you no longer want to be involved.

    To do that you just buy back the options you no longer want to be short.

    You can also close out shares and options when thigns go so well so fast that it isn't worth waiting for the expiration date. That frees up your capital for other opportunities.

    Apr 25 06:04 PM | 3 Likes Like |Link to Comment
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