With the NYSE trading almost 1.5% higher Monday, it's no surprise that there were 21 breakout stocks on big volume that made my post. As always, the first thing I do is scan the list for familiar names, such as stocks which have appeared on similar scans multiple times in the past week or two (most of these names are unfamiliar so it saves a lot of time, especially with larger lists). This indicates there may be some real momentum behind the stock, and that it could trade higher in following sessions as well. Then (if and when any of the stocks I find are familiar to me), I take a look at the chart(s) to see if I can structure a potential option trade. As stated, in this post I will name 21 stocks, but only write about one in detail and outline an option trade I may look at opening in the near future.

This method is just one of the ways I use to find stocks for potential option trades. The first part of this post will show the list of stocks which traded higher on above average volume. The second part of this post requires the knowledge of stock options. To learn more about the option strategies outlined in this post, risks, pricing, calculations, other strategies, and options in general, click here.

End of October short interest figures were recently released by both the NYSE and Nasdaq, and below we highlight the stocks in the Russell 1,000 with the highest and lowest short interest as a percentage of float. For the major indices as a whole, short interest is at two-year lows, but there are still plenty of individual stocks that are heavily shorted.

As shown below, Barnes & Noble (BKS) is the Russell 1,000 stock with the highest percentage of its float sold short (45.4%). Chipotle Mexican Grill (CMG) ranks second with 40.61% of its float sold short, followed by DIRECTV (DTV) (29.29%), Alliance Data (ADS) (25.98%), and KB Home (KBH) (25.1%). Other notables on the list of heavily shorted stocks include First Solar (FSLR), NetFlix (NFLX), SunPower (SPWRA), and AIG. With the markets up significantly this year, it's not surprising to see that most of the highly shorted stocks are up big as well. Unless you've just taken a short position on these names, it has likely been a rough ride over the past few months.

• U.S. AAA rating not guaranteed. The U.S. could lose its AAA rating if it fails to reduce its deficit over the next 3-4 years, Moody's says. Steven Hess, Moody's lead analyst for the U.S., acknowledges reducing the gap won't be easy: "Raising taxes is never popular and difficult politically, so we have to see if the government can do that or cut expenditures." Earlier this year, markets were spooked after S&P cut its outlook on Britain to Negative from Stable. Meanwhile, Moody's said today European countries' rising debt won't trigger across-the-board downgrades.
• Deep pay cuts coming to TARP recipients. In a plan to be made public within the next few days, the government will order deep pay cuts at the biggest bailout recipients - Citigroup (C), Bank of America (BAC), AIG (AIG), GM, Chrysler, GMAC and Chrysler Financial. The plan targets the 25 top earners at each company, who will see their compensation decline this year by about 50%, while bonus payments will be slashed by up to 90%, to be replaced by stock that they'll be restricted from immediately selling. The plan does not address firms that didn't receive bailout funds, or that have already repaid their loans.
• South Korea's $3.9B oil buy. State-owned Korea National Oil Corp. agreed to buy Canada's Harvest Energy (HTE) for $3.9B - $1.7B for its outstanding shares and the assumption of $2.2B in debt. Shareholders will receive $9.52/share - a 37% premium to Wednesday's close. The deal is South Korea's biggest outbound cross-border deal ever in the Oil & Gas sector, and ranks seventh in global Oil & Gas sector M&A transactions in 2009. Harvest produced 53K b/d in Q2, 70% of which was crude oil and 30% was natural gas. Shares +29.1% premarket to $9.05.
• Bove drops a bomb. Rochdale Securities analyst Richard Bove sent stocks into a tailspin late Wednesday after he downgraded shares of Wells Fargo (WFC) to Sell, despite a consensus-beating Q3. Bove is concerned by the positive impact mortgage hedges have had on Wells' recent results, which "keep coming through for the company whenever it needs to bolster earnings," but are a nightmare for investors who shouldn't look at such activity as generating predictable or repeatable profits. Bove also called the portfolio Wells acquired from Wachovia 'cancerous.' WFC -5.1% yesterday.
• eBay falters on gloomy outlook. eBay (EBAY) posted Q3 earnings that exceeded expectations, but shares traded lower after-hours after its guidance gave a gloomier vision of the near future than many expected (read eBay's Q3 earnings call transcript). eBay has struggled as online shopping habits have shifted away from auctions to fixed-price purchases on sites such as Amazon.com (AMZN).
• Beige Book sees signs of growth. The Fed said most regional economies are on the mend, as home sales rebound and manufacturers restart idled operations. "Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered," the Fed said in its beige book tally. The report also highlighted how heavily businesses are relying on government spending: "There were several reports that the only 'sure' business will come from government stimulus projects, although funding for such projects has been slow to materialize," it said.
• Microsoft's big day. Microsoft's much-anticipated OS upgrade, Windows 7, goes on sale today. The company hopes Windows 7 will gain more traction among retail and corporate clients than its most predecessor, Vista, which was seen as slow and clunky. Analysts say the new OS isn't likely to cause a sudden spike in PC sales, a point conceded by Microsoft CEO Steve Ballmer, who said recently IT budgets "aren't going to rise just because we shipped a new version."
• Twin deals for Twitter. Twitter inked deals to sell the rights to mine its pipeline of 'tweets' with both Google (GOOG) and Microsoft (MSFT) Wednesday, underscoring the growing importance of real time search. Neither would say how much it's paying for the rights to index the millions of daily tweets, considered to be Twitter's most valuable asset. The deals could be the first meaningful revenue for Twitter since its 2006 inception, and begin to answer the much-explored question of "where's the beef?"
• A strong Q3 for China. China's Q3 GDP came in at 8.9%, just below the 9% economists forecast. Separate reports showed industrial production and retail sales also accelerated. China's return to robust growth continues to raise the question of when policy makers will withdraw record fiscal and monetary stimulus in order to avoid another bubble.
• Galleon wind down begins. Managers of Galleon Group's $500M Asia fund are considering buying the unit, sources say. On Wednesday, Galleon told employees and investors it would wind down the firm after its founder was charged with insider trading. Unless the government intervenes, investors likely won't get their money back until Jan. 1, 2010.

Earnings: Thur. Before Open

• 3M Company (MMM): Q3 EPS of $1.37 beats by $0.20. Revenue of $6.19B (-5.6%) vs. $5.77B. Shares +1.2% premarket. (PR)
• AT&T (T): Q3 EPS of $0.54 beats by $0.04. Revenue of $30.9B (-1.3%) in-line. Wireless subscribers +2M to 81.6M. Shares +2% premarket. (PR)
• AU Optronics (AUO): Q3 EPS of $0.26 beats by $0.01. Revenue of $3.5B (+8.4%) vs. $3.21B. Operating margin 6.8%. Shares -2.3% in Taiwan. (PR)
• Black & Decker (BDK): Q3 EPS of $0.91 beats by $0.09. Revenue of $1.21B (-23%) in-line. Sees Q4 EPS of $0.68-0.78 vs. $0.50 consensus. Shares +2.2% premarket. (PR)
• Bristol-Myers (BMY): Q3 EPS of $0.52 beats by $0.01. Revenue of $5.49B (+4.4%) in-line. (PR)
• Bunge (BG): Q3 EPS of $1.62 beats by $0.15. Revenue of $11.3B (-23.6%) vs. $12B. Sees full-year EPS of $3.10-$3.50 vs. consensus of $4.69. Says fertilizer business continues to be pressured by high-cost inventory and a weak pricing environment. (PR)
• Celgene (CELG): Q3 EPS of $0.56 beats by $0.02. Revenue of $692M (+16.8%) vs. $671M. Shares +5.4% premarket. (PR)
• Check Point Software (CHKP): Q3 EPS of $0.52 beats by $0.03. Revenue of $234M (+17%) vs. $231M. (PR)
• CONSOL Energy (CNX): Q3 EPS of $0.48 misses by $0.18. Revenue of $1.09B (-6.7%) in-line. Shares -3.1% premarket. (PR)
• Cooper Industries (CBE): Q3 EPS of $0.70 beats by $0.06. Revenue of $1.29B (-25.6%) in-line. "Revenue and orders for maintenance and repair items and product lines that declined rapidly at the beginning of the economic downturn are beginning to improve, while the longer cycle products appear to have now bottomed." Shares -0.3% premarket. (PR)
• Danaher (DHR): Q3 EPS of $0.89 beats by $0.03. Revenue of $2.75B (-14.2%) in-line. (PR)
• Delta Air Lines (DAL): Q3 EPS of $0.06 beats by $0.11. Revenue of $7.57B (+32.4%) in-line. (PR)
• Diamond Offshore Drilling (DO): Q3 EPS of $2.62 beats by $0.32. Revenue of $908M (+0.9%) vs. $874M. Declares special dividend of $1.875/share. (PR)
• Dow Chemical (DOW): Q3 EPS of $0.24 beats by $0.14. Revenue of $12.05B (+6.4%) vs. $11.85B. "The economic outlook for the rest of 2009 appears to be stabilizing with strong growth in Asia Pacific, especially China, and other emerging geographies. The global economy is now on firmer footing, and, in our view, the U.S. economy is beginning a slow and tenuous recovery, with unemployment continuing to be a drag on consumer spending." (PR)
• EMC (EMC): Q3 EPS of $0.23 beats by $0.02. Revenue of $3.52B (-5.3%) vs. $3.45B. Says customers are signaling more comfort spending their IT budgets. Shares +1.5% premarket. (PR)
• Ensco International (ESV): Q3 EPS of $1.05 beats by $0.01. Revenue of $425M (-31.3%) vs. $439M. (PR)
• Entergy (ETR): Q3 EPS of $2.40 misses by $0.08. Revenue of $2.94B (-25.9%) vs. $3.9B. "We continue to experience the negative effects of the slowed economic recovery." (PR)
• Ericsson (ERIC): Q3 EPS of 0.25kr misses by 0.61kr. Revenue of 46.4Bkr (-5.7%) vs. 49.46Bkr. "Sales of network equipment declined due to lower demand in the current tougher market environment. Despite lower volumes, Network margins remain stable." Shares -8.9% premarket. (PR)
• Fifth Third Bancorp (FITB): Q3 EPS of -$0.20 beats by $0.03. Revenue of $M in-line. "The credit environment remains challenging, and we continue to aggressively work to manage risk in the portfolio." Shares -2.1% premarket. (PR)
• Goodrich (GR): Q3 EPS of $1.12 beats by $0.09. Revenue of $1.65B (-7%) in-line. (PR)
• Hershey Foods (HSY): Q3 EPS of $0.73 beats by $0.06. Revenue of $1.48B (-0.3%) vs. $1.54B. "As we look to 2010, we assume the economic environment for consumers in the U.S. and international markets will continue to be challenging." Shares +2.5% premarket. (PR)
• Huntington Bancshares (HBAN): Q3 EPS of -$0.33 misses by $0.05. Revenue of $M in-line. Shares -2.1% premarket. (PR)
• IMS Health (RX): Q3 EPS of $0.40 beats by $0.04. Revenue of $541M (-5.7%) vs. $522M. (PR)
• Janus Capital Group (JNS): Q3 EPS of $0.05 misses by $0.10. Revenue of $228M (-17.4%) vs. $225M. (PR)
• JetBlue Airways (JBLU): Q3 EPS of $0.04 misses by $0.01. Revenue of $854M (-5.3%) vs. $847M. Shares +1.2% premarket. (PR)
• Kimberly-Clark (KMB): Q3 EPS of $1.40 beats by $0.27. Revenue of $4.91B (-1.7%) in-line. Sees full-year EPS of $4.50-$4.60 vs. consensus of $4.26, citing increased cost savings, better organic sales growth and a further recovery in currency exchange rates. Shares +5.5% premarket. (PR)
• Laboratory Corp. (LH): Q3 EPS of $1.22 beats by $0.07. Revenue of $1.19B (+4.4%) in-line. (PR)
• Legg Mason (LM): FQ2 EPS of $0.30 beats by $0.11. Revenue of $660M (-31.7%) vs. $652M. (PR)
• Logitech (LOGI): FQ2 EPS of $0.11 beats by $0.06. Revenue of $498M (-25.1%) vs. $474M. Sees FQ3 revenue of $575-595M vs. $623M. Shares +7.2% in Zurich. (PR)
• McDonald's (MCD): Q3 EPS of $1.15 beats by $0.04. Revenue of $6.05B (-3.5%) in-line. Comps +3.8%, with U.S. +2.5%, Europe +5.8% and the rest +2.2%. Shares +1.3% premarket. (PR)
• Mead Johnson (MJN): Q3 EPS of $0.53 misses by $0.02. Revenue of $700M (-5.8%) vs. $737M. Shares -8.4% premarket. (PR)
• Merck (MRK): Q3 EPS of $0.90 beats by $0.08. Revenue of $6.05B (+1.8%) in-line. (PR)
• NCR (NCR): Q3 EPS of $0.19 misses by $0.05. Revenue of $1.14B (-17.7%) vs. $1.22B. Sees full-year EPS of $0.45-0.55 vs. $0.67. "The willingness of customers to invest in Q2... did not spill over into Q3. That said, we were more encouraged by the conversations we were having with our customers about Q4 and 2010." Shares -5.9% premarket. (PR)
• New York Times (NYT): Q3 EPS of $0.16 beats by $0.17. Revenue of $571M (-16.9%) vs. $562M. Shares +2.7% premarket. (PR)
• NII Holdings (NIHD): Q3 EPS of $0.69 beats by $0.14. Revenue of $1.14B (-3.5%) in-line. (PR)
• Nucor (NUE): Q3 EPS of -$0.10 beats by $0.05. Revenue of $3.12B (-58.1%) vs. $2.98B. "Our view remains that there has been little improvement in real demand and the uncertainty in our economy is still very high. We also continue to believe that real demand is in for a long, slow recovery." Shares -0.6% premarket. (PR)
• Occidental Petroleum (OXY): Q3 EPS of $1.14 beats by $0.06. Revenue of $4.1B (-41.9%) in-line. Shares +1.2% premarket. (PR)
• Old Republic International (ORI): Q3 EPS of -$0.283 misses by $0.11. Revenue of $959M (+2.4%) vs. $910M. (PR)
• Philip Morris (PM): Q3 EPS of $0.93 beats by $0.02. Revenue of $6.59B (-5.3%) vs. $6.71B. "While we experienced lower organic volume in the quarter, this was largely anticipated given our pricing actions and the on-going impact of the economic crisis on total consumption levels." Shares +0.75% premarket. (PR)
• PNC Financial Services (PNC): Q3 EPS of $1.00 beats by $0.69. Revenue of $4.05B (+144.7%) vs. $3.8B. (PR)
• Potash (POT): Q3 EPS of $0.82 beats by $0.01. Revenue of $1.1B (-64.1%) in-line. Sees Q4 EPS of $0.65-0.85 vs. consensus of $1.18. "The uncertainty among fertilizer buyers has lasted far longer than we anticipated, but cannot continue indefinitely." Shares -2.9% premarket. (PR)
• ProLogis (PLD): Q3 EPS of $0.21 beats by $0.02. Revenue of $274M (-72.3%) vs. $228M. Shares +2.4% premarket. (PR)
• Raytheon (RTN): Q3 EPS of $1.25 beats by $0.09. Revenue of $6.21B (+5.8%) in-line. Shares +0.7% premarket. (PR)
• Reliance Steel & Aluminum (RS): Q3 EPS of $0.57 beats by $0.11. Revenue of $1.24B (-57.1%) vs. $1.34B. Declines Q4 guidance. "We believe that demand is fairly stable at low levels." (PR)
• Reynolds American (RAI): Q3 EPS of $1.24 beats by $0.07. Revenue of $2.15B (-5.3%) in-line. Shares -0.1% premarket. (PR)
• Ryder System (R): Q3 EPS of $0.50 beats by $0.05. Revenue of $1.26B (-20.3%) in-line. Anticipates the weak overall economic environment and protracted freight recession will continue to impact its performance. (PR)
• Schering-Plough (SGP): Q3 EPS of $0.40 in-line. Revenue of $4.5B (-1.7%) in-line. (PR)
• Starwood Hotels (HOT): Q3 EPS of $0.14 beats by $0.04. Revenue of $1.22B (-20.7%) vs. $1.16B. "It is very difficult at this time to provide any definitive point of view on 2010. While business conditions have clearly stabilized, it is very hard to forecast the pace of recovery, especially rate." (PR)
• SunTrust Banks (STI): Q3 EPS of -$0.60 misses by $0.05. Revenue of $1.94B (-21%) vs. $2.11B. Earnings include $131M writedown on debt. Allowance for loan losses +128M to $3.02B. (PR)
• Sybase (SY): Q3 EPS of $0.63 beats by $0.06. Revenue of $293M (+3.3%) vs. $281M. Shares +2.2% premarket. (PR)
• TASER International (TASR): Q3 EPS of -$0.05 misses by $0.02. Revenue of $26.8M vs. $20.9M. Shares -1.2% premarket. (PR)
• Temple-Inland (TIN): Q3 EPS of $0.24 beats by $0.06. Revenue of $885M (-9.3%) vs. $876M. "As we look forward, economic conditions, while still uncertain, have stabilized and appear to be on a slow path to recovery." (PR)
• Terra Industries (TRA): Q3 EPS of $0.45 misses by $0.07. Revenue of $347M (-56.1%) vs. $356M. Shares +0.8% premarket. (PR)
• Thermo Fisher (TMO): Q3 EPS of $0.78 beats by $0.02. Revenue of $2.53B (-2%) in-line. (PR)
• Travellers (TRV): Q3 EPS of $1.61 beats by $0.30. Revenue of $6.3B vs. $6B. Sees full-year EPS of $5.30-5.50 vs. consensus of $5.28. Raises quarterly dividend to $0.33 from $0.30. Authorizes an additional $6B share buyback. "We remain cautious about the magnitude of rate gains that are achievable in the near term given general economic conditions." (PR)
• Union Pacific (UNP): Q3 EPS of $1.02 beats by $0.02. Revenue of $3.67B (-24.2%) in-line. "Business volumes seem to have stabilized, but at very low levels." (PR)
• UPS (UPS): Q3 EPS of $0.55 beats by $0.03. Revenue of $11.15B in-line. Volume of 927M packages, -2.4%. "I'm encouraged by the signs of economic recovery that are becoming apparent, although we still have a long way to go," CEO Scott Davis said. Shares -1% premarket. (PR)
• US Airways (LCC): Q3 EPS of -$0.83 beats by $0.11. Revenue of $2.72B, including $110 from a la carte revenue initiatives, in-line. Shares +3.4% premarket. (PR)
• Xerox (XRX): Q3 EPS of $0.14 beats by $0.02. Revenue of $3.67B (-15.9%) in-line. Sees full-year EPS of $0.55-0.57 vs. consensus of $0.53. (8-K)
• Zimmer (ZMH): Q3 EPS of $0.88 beats by $0.02. Revenue of $976M (+2.5%) vs. $954M. Shares +1.8% premarket. (PR)

Earnings: Wed. After Close

• Alliance Data Systems (ADS): Q3 EPS of $0.83 misses by $0.51. Revenue of $483M (-5%) vs. $500M. Expects 2010 EPS of $6.00 vs. $6.10. Shares -6.3% AH. (PR)
• Amgen (AMGN): Q3 EPS of $1.49 beats by $0.22. Revenue of $3.8B (-2%) in-line. Raises full-year EPS guidance to $4.90-5.05 from $4.80-4.95, vs. $4.88. Shares -3% AH. (PR)
• Ameriprise Financial (AMP): Q3 EPS of $1.03 beats by $0.39. Revenue of $2B (+20%) vs. $2.1B. Debt-to-total-capital ratio of 18.7%. Shares +1.6% AH. (PR)
• Citrix Systems (CTXS): Q3 EPS of $0.43 beats by $0.02. Revenue of $401M (+1%) vs. $400M. Sees full-year revenue up 8-9% sequentially to $1.73B. Shares -3.6% AH. (PR)
• Covanta (CVA): Q3 EPS of $0.28 beats by $0.04. Revenue of $409M (-7%) vs. $388M. Shares +0.3% AH. (PR)
• eBay (EBAY): Q3 EPS of $0.38 beats by $0.01. Revenue of $2.2B (+6%) vs. $2.1B. Shares -4.9% AH. (PR)
• Equifax (EFX): Q3 EPS of $0.57 beats by $0.02. Revenue of $452M (-7%) in-line. Shares -3.2% AH. (PR)
• F5 Networks (FFIV): FQ4 EPS of $0.50 beats by $0.09. Revenue of $175M (+2%) vs. $164M. Shares +8.1% AH. (PR)
• Fidelity National Information Services (FIS): Q3 EPS of $0.46 misses by $0.01. Revenue of $851M (-4%) vs. $870M. Shares -0.4% AH. (PR)
• Fidelity National Financial (FNF): Q3 EPS of $0.32 misses by $0.02. Revenue of $1.5B (+52%) in-line. Shares +0.2% AH. (PR)
• Intersil (ISIL): Q3 EPS of $0.10 in-line. Revenue of $168M (-23%) vs. $162M. Sees Q4 EPS of $0.14-0.17 vs. $0.13. Shares -2.8% AH. (PR)
• Knight Transportation (KNX): Q3 EPS of $0.16 in-line. Revenue of $173M (-17%) vs. $165M. Shares +1.2% AH. (PR)
• Lam Research (LRCX): FQ1 EPS of $0.03 beats by $0.11. Revenue of $319M (+46%) vs. $288M. Shares +3.2% AH. (PR)
• Newfield Exploration (NFX): Q3 EPS of $1.58 beats by $0.24. Revenue of $375M (-45%) vs. $536M. Shares -0.1% AH. (PR)
• Noble (NE): Q3 EPS of $1.63 beats by $0.10. Revenue of $906M (+5%) in-line. Shares +1.1% AH. (PR)
• Novellus Systems (NVLS): Q3 EPS of -$0.03 beats by $0.01. Revenue of $177M (-29%) vs. $172M. Shares +0.9% AH. (PR)
• OSI Pharmaceuticals (OSIP): Q3 EPS of $0.81 beats by $0.49. Revenue of $111M (+18%) vs. $106M. Shares -1% AH. (PR)
• Pactiv (PTV): Q3 EPS of $0.54 beats by $0.03. Revenue of $839M (-9%) vs. $858M. Shares -0.2% AH. (PR)
• QLogic (QLGC): FQ2 EPS of $0.21 beats by $0.03. Revenue of $132M (-23%) vs. $126M. Shares -2.6% AH. (PR)
• Range Resources (RRC): Q3 EPS of $0.26 beats by $0.04. Revenue of $204M (-67%) vs. $261M. Shares -0.2% AH. (PR)
• Skechers (SKX): Q3 EPS of $0.52 beats by $0.17. Revenue of $405M (+1%) vs. $385M. Shares +5.2% AH. (PR)
• Terex (TEX): Q3 EPS of -$0.95 misses by $0.61. Revenue of $1.2B (-51%) vs. $1.3B. Shares -10.5% AH. (PR)
• TriQuint Semiconductor (TQNT): Q3 EPS of $0.10 in-line. Revenue of $173M (-7%) vs. $178M. Shares -19.9% AH. (PR)
• VMware (VMW): Q3 EPS of $0.24 beats by $0.04. Revenue of $490M (+4%) vs. $474M. Sees Q4 revenue of v$540M-560M vs. $523M. Shares +1.6% AH. (PR)

Today's Markets

Asian and European markets followed the U.S. into the red Thursday. Stock futures are marginally lower.

Q3 2009 Earnings Call

October 21, 2009; 05:00 pm ET

Sentiment

Stocks opened broadly lower following a round of mostly disappointing stock news Friday. GE (GE) is down 4 percent and weighing down the Dow Jones Industrial Average after the company reported quarterly earnings of 22 cents per share on $37.8 billion in revenues. Analysts were looking for 20 cents on $39.5 billion.

IBM (IBM) is the Dow's biggest loser, falling 4.7 percent after the computer maker reported better-than-expected earnings and revenues, but also made cautious comments about corporate technology spending. Bank of America (BAC) reported a 26-cent per share loss for the quarter, which was a nickel worse than expectations. Revenues also missed estimates and BAC is down 4.2 percent on the news.

The short interest (as measured by Percent Shares Outstanding On Loan) for Alliance Data Systems Corp (ADS) is up 0.74% over the past week and now stands at 37.36%. This is down 4.97% from the 52 week high hit on August 13, 2009. When compared to other North America IT Services companies, the short base is well above the average of 4.70% for the sector.

Over the past week the Negative Sentiment Indicator (DNS) for ADS was unchanged. It remains in the tenth decile, indicating a high amount of negative short sale sentiment for the security. The Price Squeeze Indicator (DIPS) on the other hand saw a small increase to the ninth decile, indicating higher likelihood for a price squeeze.

The NYSE and Nasdaq publish their short interest figures twice a month, and each time the data is released, Bespoke Premium also publishes an in-depth report highlighting historical short interest trends for the entire market all the way down to individual stocks. To view a sample of the report, please click here (pdf).

Below we provide a list of the most and least heavily shorted stocks in the Russell 1,000 as of the end of July. This is based on each stock's short interest as a percentage of its overall equity float. Based on the most up-to-date numbers, Chipotle Mexican Grill (CMG) has the highest short interest as a percentage of float at 43.74%. AIG ranks second at 34.99%, although this number is likely to decrease in the next release after the massive short squeeze that has taken place in the stock this month.

• Goldman is TARP-free at last. Goldman Sachs (GS) became the first major bank to completely shed its bailout ties, paying $1.1B to redeem the government's TARP warrants and calling the Treasury's valuation 'full and fair' given the government's support of the financial system. With the warrant redemption and the $318M Goldman paid in dividends on its $10B TARP aid, taxpayers received a 23% annualized return for the nine-month transaction.
• S&P flip-flops on ratings. Standard & Poor's unexpectedly switched its rating of some bonds backed by commercial mortgages, upgrading the bonds to AAA just days after the same bonds had been sharply downgraded. The unusual move further damaged S&P's credibility and unsettled investors in the $700B market for commercial mortgage-backed securities [CMBS]. The reversal came after S&P realized bonds with a shorter lifespan were less risky than similarly structured bonds with a longer lifespan, a mistake that could reflect a basic misunderstanding of the way cash flows are distributed across CMBS.
• Bristol-Myers buys biotech firm. Bristol-Myers Squibb (BMY) agreed to acquire Medarex (MEDX), the biotech firm it already owns a 2% stake in, for $2.4B in cash. Bristol-Myers said the $16/share deal, which marks a 90% premium to Medarex's closing price on Wednesday, buys it proven antibody discovery technology and rights to an immunotherapy the companies developed. MEDX +89% premarket (7:00 ET).
• Intel fights antitrust fine. Intel (INTC) is fighting back against a record €1.06B ($1.45B) fine levied by EU antitrust regulators in May, saying the fine violates protections granted by European human rights law. Since the EU antitrust body handles both the investigation and judgment of a given case, companies don't have the opportunity to fully defend themselves as they would in a court. However, the appeal is a bit of a long shot as no EU antitrust appeal has ever won on this argument.
• Amazon's shoe-in to online apparel. Amazon (AMZN) will buy online shoe retailer Zappos.com for around $928M, an aggressive expansion into online apparel after Amazon's solo attempts at selling footwear were unsuccessful. Zappos is known for its fiercely loyal customer base, good customer service and free shipping/free returns policy. AMZN +0.6% premarket (7:00 ET).
• Bair wants large firms to pay. FDIC's Sheila Bair is scheduled to testify before the Senate Banking Committee this morning, and will ask lawmakers to impose fees on the country's biggest financial firms. Bair wants Congress to create an industry-supported Financial Company Resolution Fund which will provide working capital and cover unanticipated losses if the government has to wind down a failed firm. In addition to minimizing government outlays, this would also "provide an economic incentive for an institution not to grow too large."
• SEC targets pay-to-play. The SEC voted unanimously to propose rules preventing investment advisers from managing public programs for two years if they make political contributions. The proposal is an attempt to curb pay-to-play practices, in which public contracts are awarded to those who make political contributions.
• Chrysler warns on dealership legislation. Chrysler warned it could face liquidation for a second time if lawmakers move forward with a plan to reinstate terminated dealership agreements. The House of Representatives has already approved a measure to restore contracts with 789 dealerships, but the bill's future in the Senate is less certain.
• Moody's rebuffed in Berkshire sale. Moody's (MCO) fell 10.3% in after-hours trading following a disclosure by Berkshire Hathaway (BRK.A) that it sold 7.99M shares of the ratings company this week. Though Berkshire remains Moody's largest shareholder, the sale reduced its stake by 17%. Moody's has reported a profit decline for seven consecutive quarters.
• Porsche CEO, CFO resign. Porsche's CEO Wendelin Wiedeking and CFO Holger Haerter both resigned from the company with immediate effect, after coming to "the conclusion that the further strategic development of Porsche... is better off, if they are not on board as acting persons," said a company spokesman. The move is expected to facilitate a merger agreement with Volkswagen (VLKAY.PK).
• eBay beats as Paypal, marketplace show signs of life. eBay (EBAY) managed to beat quarterly earnings expectations (see details below), even as profit fell 29% and revenue fell 4%. The company's PayPal online-payments unit continued to grow strongly and a decline in eBay's core marketplace leveled off.
• ING may sell private banking unit. ING Group (ING) reportedly hired JPMorgan Chase (JPM) to advise it on the possible sale of its private banking business in Europe and Asia. A deal could be worth over $1B.
• House prices rise. The FHFA House Price Index was up 0.9% in May vs. -0.2% consensus, after falling 0.3% in April (revised). Nationwide prices are down 5.6% from a year earlier, and 10.7% from the April 2007 peak.

Earnings: Thursday Before Open

• 3M (MMM): Q2 EPS of $1.20 beats by $0.26. Revenue of $5.7B (-15%) vs. $5.4B. Adjusts guidance for FY '09 - sees EPS of $4.10-4.30 vs. prior guidance of $3.90-4.30. Shares +1.3% premarket (7:40 ET). (PR)
• Alexion Pharmaceuticals (ALXN): Q2 EPS of $0.20 beats by $0.04. Revenue of $92M (+55%) vs. $89M. Shares +1.9% premarket (8:00 ET). (PR)
• AT&T (T): Q2 EPS of $0.54 beats by $0.03. Revenue of $30.7B (-0.4%) in-line. Shares +2.9% premarket (7:45 ET). (PR)
• Bristol-Myers Squibb (BMY): Q2 EPS of $0.56 beats by $0.09. Revenue of $5.4B (+3.5%) vs. $5.3B. Issues upside EPS guidance for FY '09 of $1.95-2.05 vs. prior guidance of $1.85-2.00. (PR)
• Bunge (BG): Q2 EPS of $2.28 beats by $1.57. Revenue of $11B (-23.5%) vs. $12B. (PR)
• Celestica (CLS): Q2 EPS of $0.11 beats by $0.01. Revenue of $1.4B (-25%) in-line. (PR)
• Celgene (CELG): Q2 EPS of $0.46 in-line. Revenue of $629M (+10%) vs. $621M. Shares +8.9% premarket (7:45 ET). (PR)
• CME Group (CME): Q2 EPS of $3.37 beats by $0.14. Revenue of $648M (+15%) vs. $652M. (PR)
• Danaher (DHR): Q2 EPS of $0.89 beats by $0.01. Revenue of $2.7B (-19%) vs. $2.8B. (PR)
• Diamond Offshore Drilling (DO): Q2 EPS of $2.79 beats by $0.15. Revenue of $946M (-0.8%) vs. $942M. (PR)
• EMC (EMC): Q2 EPS of $0.18 beats by $0.01. Revenue of $3.3B (-11%) vs. $3.2B. Sees FY '09 EPS of $0.82 vs. &0.78 consensus. Shares +4.8% premarket (7:30 ET). (PR)
• EnCana (ECA): Q2 EPS of $1.22 beats by $0.25. Revenue of $3.8B (-49%) vs. $4.4B. (EnCana news release (.pdf))
• Fifth Third Bancorp (FITB): Q2 EPS of $1.15 vs. consensus of -$0.34 (may not be comparable). Tier 1 ratio of 12.9%. Shares +7% premarket (7:30 ET). (PR)
• FLIR Systems (FLIR): Q2 EPS of $0.35 in-line. Revenue of $278M (+6.5%) vs. $297M. Shares +1.9% premarket (7:50 ET). (PR)
• Ford Motor (F): Q2 EPS of -$0.21 beats by $0.27. Revenue of $27.2B (-34%) vs. $24.8B. (PR)
• Goodrich (GR): Q2 EPS of $1.15 beats by $0.04. Revenue of $1.7B (-8%) in-line. (PR)
• Hershey (HSY): Q2 EPS of $0.43 beats by $0.08. Revenue of $1.2B (+6%) vs. $1.1B. (PR)
• Huntington Bancshares (HBAN): Q2 EPS of -$0.40 misses by $0.22. Increased provision for credit losses 42% from Q1 to $413.7M. Tier 1 capital ratio of 11.86%. Shares -3.1% premarket (7:50 ET). (PR)
• ITT Educational Services (ESI): Q2 EPS of $1.87 beats by $0.14. Revenue of $317M (+29%) vs. $307M. (PR)
• JetBlue Airways (JBLU): Q2 EPS of $0.05 beats by $0.03. Revenue of $807M (-6%) vs. $800M. (PR)
• Kimberly-Clark (KMB): Q2 EPS of $1.16 beats by $0.22. Revenue of $4.7B (-5.6%) vs. $4.6B. Issues upside FY '09 EPS guidance of $4.10-4.25 vs. $4.12 consensus. (PR)
• Newmont Mining (NEM): Q2 EPS of $0.43 misses by $0.04. Revenue of $1.6B (+7%) in-line. (PR)
• NII Holdings (NIHD): Q2 EPS of $0.79 beats by $0.23. Revenue of $1.1B (-4%) vs. $1B. (PR)
• Omnicom Group (OMC): Q2 EPS of $0.75 beats by $0.01. Revenue of $2.9B (-17%) in-line. (PR)
• PNC Financial Services Group (PNC): Q2 EPS of $0.14 vs. consensus of $0.45 (may not be comparable). Revenue of $4B (+95.5%) vs. $3.65B. (PR)
• Potash Corp. (POT): Q2 EPS of $0.62 misses by $0.07. Revenue of $856M (-67%) vs. $981M. Issues downside Q3 EPS guidance of $0.80-1.20 vs. $1.56 consensus. Issues downside FY '09 EPS guidance of $4.00-5.00 vs. $5.24 consensus. Shares -2.3% premarket (6:50 ET). (PR)
• Raytheon (RTN): Q2 EPS of $1.24 beats by $0.11. Revenue of $6.1B (+4%) vs. $6.2B. (PR)
• Starwood Hotels & Resorts Worldwide (HOT): Q2 EPS of $0.22 beats by $0.05. Revenue of $1.2B (-23%) in-line. Issues downside guidance: sees Q3 EPS of $0.06-0.10 vs. $0.21 consensus, FY '09 EPS of $0.65 vs. $0.76 consensus. (PR)
• Terra Industries (TRA): Q2 EPS of $0.81 misses by $0.10. Revenue of $453.5M (-46%) vs. $568M. (PR)
• Thermo Fisher Scientific (TMO): Q2 EPS of $0.74 beats by $0.08. Revenue of $2.5B (-8%) vs. $2.4B. (PR)
• Wyeth (WYE): Q2 EPS of $0.94 beats by $0.09. Revenue of $5.7B (-4%) vs. $5.6B. Issues upside FY '09 EPS guidance of $3.48-3.58 vs. prior guidance of $3.33-3.53. (PR)
• Xerox (XRX): Q2 EPS of $0.16 beats by $0.05. Revenue of $3.7B (-18%) in-line. (PR)

Earnings: Wednesday After Close

• Alliance Data Systems (ADS): Q2 EPS of $0.95 misses by $0.07. Revenue of $460M (-9%) vs. $481M. Sees Q3 EPS of $1.34 in-line. Maintains 2009 EPS guidance of $5.15 vs. $5.00. (PR)
• Amdocs (DOX): Q3 EPS of $0.53 beats by $0.05. Revenue of $690M (-16%) vs. $679M. Sees Q4 EPS of $0.47-0.51 vs. $0.48. Sees Q4 revenue of $670M-690M vs. $668M. (PR)
• Citrix Systems (CTXS): Q2 EPS of $0.39 beats by $0.01. Revenue of $393M (+0%) vs. $387M. Sees Q3, FY09 revenues flat vs. 2008. (PR)
• Covanta Holding Corp. (CVA): Q2 EPS of $0.21 beats by $0.01. Revenue of $376M (-11%) vs. $391M. Reaffirms 2009 EPS $0.65-0.80 vs. $0.71 and adjusted EBITDA of $500M-540M. (PR)
• C.R. Bard (BCR): Q2 EPS of $1.23 beats by $0.02. Revenue of $625M (+1%) vs. $634M. (PR)
• eBay (EBAY): Q2 EPS of $0.37 beats by $0.01. Revenue of $2.1B (-4%) vs. $2B. Sees Q3 EPS of $0.34-0.36 vs. $0.35. Sees Q3 revenue of $2.05B-2.15B vs. $2B. (PR)
• Equifax (EFX): Q2 EPS of $0.57 in-line. Revenue of $455M (-9%) vs. $453M. Sees Q3 EPS of $0.52-0.57 vs. $0.59. (PR)
• Equinix (EQIX): Q2 EPS of $0.44 beats by $0.11. Revenue of $213M (+7%) vs. $209M. Sees Q3 revenue of $221M-225M vs. $220M. Sees FY09 revenue of $860M-$875M vs. $861M. (PR)

• E*TRADE Financial (ETFC): Q2 EPS of -$0.22 beats by $0.09. Total loan loss allowance was flat at $1.2B, or 5% of gross loans receivable. (PR)

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

We'll start our Q1 '09 coverage with Viking Global. Andreas Halvorsen is one of the many 'Tiger Cub' fund managers we cover here on the blog. 'Tiger Cubs' are the progeny of legendary investor and hedge fund manager Julian Robertson of Tiger Management. Many of the critical members of Tiger started their own funds, and Halvorsen is no different. Halvorsen has taken what he learned/used at Tiger and added his own spice to the value-oriented, yet growth at a reasonable price (G.A.R.P.)-tolerable investment style. Viking employs a fundamental strategy, using a bottom-up process to pick stocks. In terms of recent performance, It was +0.99% for March, and +9.27% year to date as of that time. We covered Viking and other hedge funds in our March performance update.

Missed this until this evening. It’s from the Saturday WSJ.

It seems that TALF is providing financing for some securitizations that are a bit out on the curve. Lately they’ve been involved with a $500 million deal for Harley Davidson and a $709 million one for Alliance Data Systems. Now this isn’t to knock either Harley or Alliance but the underlying loans leave a bit to be desired.

For investors looking for potential short squeeze plays on a market rally or stocks disliked the most by investors on a market decline, below we provide a list of the 25 stocks in the Russell 1,00 with the highest short interest as a percentage of float. As shown, Chipotle Mexican Grill ranks highest with 41.7% of its float sold short. Macerich (MAC) ranks second at 35.92%, followed by ADS, PNRA, SOHU, and SPWRA. Other notables on the list include SHLD, PCLN, Citi, ISRG, WYNN, and LVS. As mentioned earlier in this post, these stocks should outperform if the overall market resumes its rally due to short covering. If the market heads decidedly lower, however, the shorts will probably just pile on more.

Subscribe to Bespoke Premium to receive our twice monthly Short Interest report.

• Stress tests may reveal banks' capital needs. As the May 4 reveal date for stress tests draws closer, officials are considering releasing assessments for each of the 19 banks and may require those that need more capital to disclose how they plan to raise additional funds. Under that scenario, lenders would have to specify whether they want to convert government preference shares, issue more stock or rely on an additional bailout. The push for disclosure is meant to help the public better discern between the health of individual banks. Sources say regulators want the banks to have at least 3% tangible common equity.
• Lewis: Fed, Treasury urged Merrill silence. According to a recently obtained copy of CEO Ken Lewis' February testimony to New York's attorney general, Bernanke and then-Treasury chief Paulson pressured Bank of America (BAC) to stay silent on its increasingly troubled deal to acquire Merrill Lynch. Despite an obligation to disclose any material financial hits to shareholders, officials pressed Lewis to keep quiet during government-funding negotiations to ensure important financial institutions wouldn't fail. Publicizing Merrill's losses would have allowed Bank of America's shareholders the opportunity to stop the deal and let Merrill collapse.
• Counter-counter-offer on Chrysler debt. After rejecting a too-rich counter-offer from Chrysler creditors, the Treasury has reportedly raised its own offer in an effort to reach a deal with lenders by the end of the month. The new deal would see lenders get $1.5B of first-lien debt and a 5% equity stake in a restructured Chrysler in exchange for the $6.9B of debt they now hold. The Treasury had previously suggested lenders write off all but $1B of the debt and receive no stock.
• GM to miss debt payment, idle plants. Trying to avoid bankruptcy ahead of the government's June 1 deadline, General Motors (GM) may rush to close dealerships, scrap models and could idle most of its plants for around two months this summer. The moves could help GM break even with annual sales as low as 10M vehicles. Meanwhile, CFO Ray Young said the company doesn't plan to pay off $1B of debt due June 1, and will instead swap the debt for shares or rely on bankruptcy protection. The tougher public stance towards bondholders is meant to lay the groundwork for what promises to be an ugly debt-for-equity swap GM expects to launch by next week.
• Hard times for Hartford. Hartford Financial Services (HIG) is said to be seeking bids from rivals including Travelers Companies (TRV) for its flagship property insurance business. Sources said Hartford has been shopping the unit after losses in its life division led to credit downgrades, and that damage from the financial crisis may ultimately lead to a breakup of the insurer. The property unit is estimated to be worth $4B-$8B.
• Obama meets with credit card chiefs. Obama will meet with executives from the credit card industry today, one day after a congressional panel approved legislation to curb credit card fees and limit consumer penalties. The American Bankers Association is concerned such restrictions will tighten the availability of consumer credit and make it more expensive. Bank of America (BAC), American Express (AXP), Citigroup (C), Wells Fargo (WFC), JPMorgan Chase (JPM), Capital One (COF), Visa (V) and Mastercard (MA) will be among the 13 companies represented.
• NY cracks down on pension agents. New York State's public pension fund will ban the use of middlemen who help private-equity funds and other investors secure its business. The state is investigating whether these middlemen, called placement agents, were involved in a scheme to receive illegal payments from firms trying to win state business. As one of the nation's largest public pension funds, New York's decision could prompt other states to follow suit.
• Morgan mulls TARP repayment. Despite reporting a larger-than-expected quarterly loss, Morgan Stanley (MS) CFO Colm Kelleher said the company will 'consider' repaying $10B to the government. The statement comes less than a month after CEO John Mack told employees 'it's the wrong time' to return the money. Morgan Stanley had a Tier 1 ratio of 16.4% at the end of March, or 12.9% if the bank repays TARP funds. Shares +2.9% premarket (7:00 ET).
• Credit Suisse profit beat. Credit Suisse (CS) posted a better-than-expected Q1 profit, bouncing back from several quarterly losses in 2008. The bank saw a net profit of 2B Swiss francs ($1.72B), more than double analysts' forecasts. Though short on details for its 2009 outlook, the bank said it is "in a position to weather the storms and perform well when market opportunities arise." Shares +10.5% premarket (7:00 ET).
• Apple shines on iPhone sales. Apple's (AAPL) quarterly earnings easily beat consensus estimates (see details below) as strong sales of iPods and iPhones held up despite the weak economy. Profit was also helped by declining commodity prices for key product components like aluminum and memory chips. This was the company's first quarter since CEO Steve Jobs went on medical leave.
• eBay gets okay on Gmarket buy. eBay (EBAY) won regulatory approval from South Korea's antitrust watchdog to proceed with its planned purchase of Gmarket (GMKT). A majority of Gmarket shareholders have already agreed to the cash tender offer.
• Glaxo to release study after long delay. GlaxoSmithKline (GSK) will release the first study comparing its cervical cancer vaccine with Merck's (MRK) blockbuster Gardasil at a May 10 medical meeting. The fact that the results are being released 14 months after the study concluded and at a relatively unknown meeting have left investors and analysts puzzled.
• Freddie CFO takes his own life. Acting CFO of Freddie Mac (FRE) David Kellerman was found dead in his home in what appears to be a suicide. Kellerman had worked at the mortgage giant for 16 years.
• House prices rise slightly (.pdf). FHFA's House Price Index showed U.S. home prices rose 0.7% in February M/M, bringing the twelve-month total to -6.5%. January's previously reported 1.7% gain was revised down to 1.0%.

Earnings: Thursday Before Open

• AmerisourceBergen (ABC): FQ2 EPS of $0.95 beats by $0.06. Revenue of $17.31B (-2.5%) vs. $17.93B. Sees full-year EPS of $3.18-3.30 vs. $3.19. (PR)
• Alexion Pharmaceuticals (ALXN): Q1 EPS of $0.16 beats by $0.02. Revenue of $81M (+78.7%) vs. $82M. (PR)
• AU Optronics (AUO): Q1 EPS of -$0.71 misses by $0.04. Revenue of $1.5B (-66.7%) in-line. Expects utilization rates to improve substantially in Q2. (PR)
• AutoNation (AN): Q1 EPS of $0.23 beats by $0.07. Revenue of $2.47B (-35.6%) vs. $2.74B. Says it reduced debt by $500M in Q1, and remains in compliance with all debt covenants. Sees sales improving in H2. (PR)
• Black & Decker (BDK): Q1 EPS of $0.22 beats by $0.14. Revenue of $1.07B (-28.2%) vs. $1.16B. Sees full-year EPS of $1.50-1.90 vs. consensus of $1.79. (PR)
• Bunge (BG): Q1 EPS of -$1.76 misses by $2.25. Revenue of $9.2B (-26.2%) vs. $11B. (PR)
• Canadian Pacific Railway (CP): Q1 EPS of C$0.39 misses by C$0.09. Revenue of C$1.07B (-6.6%) vs. C$1.04B. "The unprecedented temporary decline in traffic in some of our key markets (as measured by carloads), particularly potash (-70%), Canadian coal (-30%), and automotive (-43%) has resulted in more than 2,400 employee layoffs to date." (PR)
• Celestica (CLS): Q1 EPS of $0.13 beats by $0.04. Revenue of $1.47B (-20%) vs. $1.51B. Q2 guidance in line. (PR)
• CIT Group (CIT): Q1 EPS of -$1.30 misses by $0.84. Tier-1 capital ration 9.3%. (PR)
• CME Group (CME): Q1 EPS of $3.20 in-line. Revenue of $647M (+3.5%) vs. $656M. Average rate per contract increased 12% to $0.83. (PR)
• ConocoPhillips (COP): Q1 EPS of $0.56 beats by $0.14. Revenue of $30.7B (-44.1%) vs. $26.34B. Shares +4.3% premarket. (PR)
• CONSOL Energy (CNX): Q1 EPS of $1.08 beats by $0.15. Revenue of $1.22B (+18.8%) in-line. "Energy companies with less than stellar financial positions could find it very difficult to obtain reasonable financing terms to maintain their operations. We believe that this will impact supply and could set the stage for higher coal and natural gas prices as early as '10." Shares +3.5% premarket. (PR)
• Cooper Industries (CBE): Q1 EPS of $0.47 beats by $0.01. Revenue of $1.26B (-18.7%) vs. $1.32B. Sees Q2 EPS of $0.50-0.60 vs. $0.60 and full-year EPS of $2.30-2.60 vs. $2.40. (PR)
• Danaher (DHR): Q1 EPS of $0.72 misses by $0.01. Revenue of $2.63B (-13.2%) vs. $2.67B. (PR)
• Diamond Offshore Drilling (DO): Q1 EPS of $2.51 beats by $0.29. Revenue of $886M (+12.7%) vs. $878.5M. (PR)
• EMC (EMC): Q1 EPS of $0.16 in-line. Revenue of $3.15B (-9.2%) vs. $3.25B. Sees global IT spending down in the low-double-digits for 2009. Expects $450M in cost reductions, up from a previous estimate of $350M, but says margins will decline due to weaker IT spending. (PR)
• ENSCO International (ESV): Q1 EPS of $1.56 beats by $0.04. Revenue of $514M (-9.6%) in-line. (PR)
• Exelon (EXC): Q1 EPS of $1.20 beats by $0.07. Revenue of $4.75B (+3.6%) vs. $4.62B. Reaffirms full-year EPS guidance. Shares +0.4% premarket. (PR)
• Fifth Third Bancorp (FITB): Q1 EPS of -$0.04 beats by $0.23. Tier 1 capital ratio of 10.9%. Tangible equity ratio of 7.9%. (PR)
• Goodrich (GR): Q1 EPS of $1.35 beats by $0.28. Revenue of $1.7B (-2.8%) in-line. Sees full-year EPS of $4.50-4.75 vs. $4.63, and revenue of $6.9B vs. $7.1B consensus. (PR)
• Hershey Foods (HSY): Q1 EPS of $0.38 beats by $0.03. Revenue of $1.24B (+6.5%) vs. $1.19B. Reaffirms 2009 net sales growth of 2-3%. Sees EPS increasing at less than its long-term objective of 6-8%. (PR)
• JetBlue Airways (JBLU): Q1 EPS of $0.08 beats by $0.05. Revenue of $793M (-2.8%) vs. $810M. Operating margin of 9.3% vs. 2.2% a year ago. First profitable Q1 since 2005. Shares +9.9% premarket. (PR)
• L-3 Communications (LLL): Q1 EPS of $1.66 beats by $0.03. Revenue of $3.64B (+3.7%) in-line. Reaffirms full-year guidance. (PR)
• Logitech (LOGI): FQ4 EPS of -$0.20 misses by $0.26. Revenue of $408M vs. $496M. Gross margin fell to 25% from 35.6% last quarter. "Our sales were negatively impacted by the combination of weak consumer demand and the accelerating reset by our channel partners of their weeks of supply." Shares -11.3% premarket. (PR)
• Marriott International (MAR): Q1 EPS of $0.24 beats by $0.10. Revenue of $2.5B (-14.8%) in-line. Issues downside EPS guidance for Q2 of $0.20-0.23 vs. $0.26 consensus. Maintains guidance for FY '09 of $0.88-1.02 EPS. (PR)
• Marshall & Ilsley (MI): Q1 EPS of -$0.44 misses by $0.11. Revenue of $M in-line. Q1 loan-loss provision of $478M. Shares +5.6% premarket. (PR)
• National-Oilwell Varco (NOV): Q1 EPS of $1.13 beats by $0.07. Revenue of $3.48B (+29.6%) vs. $3.29B. "Though the pace of new capital equipment orders has slowed in the short run, we believe investment in drilling equipment will resume, to enable the industry to explore new oil and gas frontiers. Nevertheless market conditions remain very challenging, and the timing of a recovery is uncertain." Shares -4.4% premarket. (PR)
• NII Holdings (NIHD): Q1 EPS of $0.43 beats by $0.07. Revenue of $M (+961%) in-line. Shares +2.3% premarket. (PR)
• Novartis (NVS): Q1 earnings of $1.96B ($0.87/share) vs. consensus of $1.89B. Sales fell 2% to $9.71B. Sees drug sales up mid-to-high single-digits. Shares +4.7% premarket. (Bloomberg)
• Occidental Petroleum (OXY): Q1 EPS of $0.50 beats by $0.13. Revenue of $3.07B (-49%) vs. $3.18B. Production was up almost 8% in Q1. (PR)
• Philip Morris (PM): Q1 EPS of $0.74 beats by $0.05. Revenue of $5.6B (-5.5%) vs. $5.48B. Reaffirms full-year guidance of $2.85-3.00 vs. consensus of $3.02. (PR)
• PNC Financial Services (PNC): Q1 EPS of $1.03 beats by $0.61. Revenue of $3.9B (+112.6%) vs. $3.5B. (PR)
• Potash (POT): Q1 EPS of $1.02 beats by $0.16. Revenue of $922.5M (-51.2%) vs. $975.5M. Issues downside EPS guidance for Q2 of $1.10-$1.50 vs. $2.21 consensus, and FY '09 EPS of $7.00-$8.00 vs. $9.65. (PR)
• RadioShack (RSH): Q1 EPS of $0.34 beats by $0.12. Revenue of $1B (+5.6%) vs. $0.94B. Comps were up 5% vs. Q1 2008. (PR)
• Raytheon (RTN): Q1 EPS of $1.11 beats by $0.10. Revenue of $5.88B (+9.9%) vs. $5.6B. Full-year guidance in line. Shares +2.4% premarket. (PR)
• Royal Caribbean Cruises (RCL): Q1 EPS of -$0.17 beats by $0.17. Revenue of $1.33B (-7.2%) in-line. Sees full-year EPS of $1.35 vs. consensus of $0.97. Shares +13.5% premarket. (PR)
• Sigma-Aldrich (SIAL): Q1 EPS of $0.68 beats by $0.04. Revenue of $519M (-8.8%) vs. $532M. Full-year guidance in line. (PR)
• Suncor Energy (SU): Q1 EPS of $0.24 beats by $0.12. The decrease in earnings was primarily from lower price realizations, with benchmark commodity prices significantly weaker in Q1 '09 vs. Q1 '08. (PR)
• SunTrust Banks (STI): Q1 EPS of -$0.46 beats by $0.19. Revenue of $2.24B (+16.3%) vs. $2.06B. Majority of loss was due to a $715M goodwill impairment charge. Tier-1 ratio estimated at 11%, up 13 points from last quarter. (PR)
• Supervalu (SVU): FQ4 EPS of $0.87 beats by $0.08. Revenue of $10.82B (+4.2%) in-line. (PR)
• Thermo Fisher (TMO): Q1 EPS of $0.62 misses by $0.08. Revenue of $2.26B vs. $2.42B. Sees full-year EPS of $2.80-3.10 vs. $3.15, and revenue of $9.6-9.9B vs. $10.14B. "Our customers are clearly delaying their capital purchases in the current environment." Shares -7.6% premarket. (PR)
• Union Pacific (UNP): Q1 EPS of $0.72. beats by $0.06. Revenue of $3.42B (-20%) vs. $3.55B. "The difficult economic conditions continue to affect our business volumes. During this challenging time, we are reducing costs across the board..." Shares +2.7% premarket. (PR)
• UPS (UPS): Q1 EPS of $0.52 misses by $0.04. Revenue of $10.94B (-13.7%) vs. $11.44B. Sees Q2 EPS of 0.45-0.55 vs. consensus of $0.65. "Economic indicators tell us recovery in the U.S. might begin late this year, but more likely not until 2010." Shares -3.7% premarket. (PR)
• US Airways (LCC): Q1 EPS of -$2.28 beats by $0.10. Revenue of $2.46B (-13.6%) in-line. "Our first quarter loss reflects the weakness in the global economy that has negatively impacted revenues throughout our industry. The steps we have taken to adapt to this environment are having a significant positive impact, though, as evidenced by our significant improvement in earnings excluding special items and fuel hedges." Shares +6% premarket. (PR)
• Zimmer (ZMH): Q1 EPS of $0.95 beats by $0.01. Revenue of $993M (-6.3%) vs. $1B. Sees full-year EPS of $3.85-4.00 vs. $3.88. (PR)

Earnings: Wednesday After Close

• Apple (AAPL): FQ2 EPS of $1.33 beats by $0.24. Revenue of $8.16B vs. $7.96B. Sees FQ3 EPS of $0.95-1.00 vs. consensus of $1.12, and revenue of $7.7-7.9B vs. $8.28B. Mac sales of 2.22M (-3% Y/Y). iPod sales 11M (+3%). iPhone sales 3.79M (+123%). (PR)
• Alliance Data Systems (ADS): Q1 EPS of $1.19 beats by $0.09. Revenue of $480M (-3.8%) vs. $488M. Sees Q2 EPS of $1.05 vs. $1.22. (PR)
• eBay (EBAY): Q1 EPS of $0.39 beats by $0.05. Revenue of $2.02B (-7.8%) vs. $1.94B. (PR)
• Equifax (EFX): Q1 EPS of $0.58 beats by $0.04. Revenue of $453M (-10%) vs. $448M. (PR)
• F5 Networks (FFIV): FQ2 EPS of $0.38 in-line. Revenue of $154M (-3.1%) in-line. Says Feb. sales were particularly slow, but March improved significantly. (PR)
• Leggett & Platt (LEG): Q1 EPS of $0.06 misses by $0.01. Revenue of $718M (-28.1%) vs. $807M. Sees full-year EPS of $0.60-0.90 vs. $0.72, and revenue of $2.9-3.3B vs. $3.39B. (PR)
• Lam Research (LRCX): FQ3 EPS of -$0.71 misses by $0.05. Revenue of $174.4M (-71.6%) vs. $175.9M. (PR)
• Noble (NE): Q1 EPS of $1.62 beats by $0.16. Revenue of $896M (+4%) in-line. (PR)
• Novellus Systems (NVLS): Q1 EPS of -$0.47 beats by $0.04. Revenue of $98.9M (-68.6%) vs. $101.7M. Says it's cautiously optimistic order activity has stabilized. (PR)
• Pactiv (PTV): Q1 EPS of $0.69 beats by $0.23. Revenue of $766M (-5.2%) vs. $732.5M. Sees Q2 EPS of $0.54-0.58 vs. $0.51 and full-year EPS of $2.15-2.25 vs. $1.89. "Compared with the first quarter of last year, we benefited from lower raw material costs, as well as lower logistics costs, and improved productivity." (PR)
• Robert Half International (RHI): Q1 EPS of $0.06 in-line. Revenue of $823M (-32.8%) vs. $844M. (PR)
• SLM Corp. (SLM): Q1 EPS of -$0.03 vs. consensus of $0.12. Loss was partly the result of ongoing dislocation in the commercial paper market. (PR)
• VMware (VMW): Q1 EPS of $0.25 beats by $0.05. Revenue of $470M vs. $474M. Sees Q2 revenue flat to down vs. a year ago. (PR)
• Xilinx (XLNX): FQ4 EPS of $0.26 beats by $0.08. Revenue of $395M (-17%) vs. $383M. (PR)
• Yum! Brands (YUM): Q1 EPS of $0.48 beats by $0.08. Revenue of $2.22B (-8.1%) vs. $2.33B. Sees full-year EPS of $2.10 vs. $2.08. Says Q2 likely to be its most challenging quarter. (PR)

Today's Markets

Overseas markets moved higher Thursday, giving a boost to futures.

From the Economist, here is a look at the stocks with the highest levels of short interest:

(From the Economist): "WHAT do a coffee company, a financial planner and a shopping-mall operator have in common? All are among the ten listed firms most in the sights of short-sellers, who borrow shares in the hopes of making a profit when their price falls. While there is little doubt that many short-sellers have profited handsomely on the recent misery of financial-services firms, the current list of short-sellers’ darlings—compiled by Data Explorers, a short-selling research firm—suggests that their recent track record has not been as good. As short interest in Nasdaq-listed Green Mountain Coffee Roasters more than doubled over the past three months, with around a third of the firm's shares now on loan, its share price rose by almost 30%. That is not the aroma of freshly-brewed coffee you smell; it’s burnt fingers."

Most analysts are pushing companies with rock-solid balance sheets to deal with the current global economic crisis. Thus, the contrarian might wonder if opportunity lurks in companies in disfavor due to high debt levels.

Of course, many companies will default under their heavy debt burden so I sought companies with high debt levels but strong free cash flow (FCF), recent Q4 revenue growth and strong competitive positions. Specifically, I screened for the following criteria:

This is the Fourth Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

We've already covered:

iShares FTSE/Xinhua China 25 (FXI) – Shares are higher in this Chinese ETF just slightly today at $25.16. One option trade in particular caught our attention in the May contract, where an investor sold 5,000 puts at the May 18 strike price for a premium of 55 cents, and purchased 5,000 calls at the May 31 strike for 95 cents each. The net cost of the trade amounts to 40 cents per contract and yields a breakeven share price of $31.40, at which point profits begin to amass. This investor has cast his vote of confidence in China and in the recovery plan currently in progress by seeking upside exposure at the 31 strike. The establishment of put sales as a vehicle to fund the cost of getting bullish on the Chinese fund was a creative way to significantly reduce the price paid by this investor. If shares can rally higher by 24% by expiration then the calls will be money-makers for this trader.

Q4 2008 Earnings Call

February 4, 2009 5:00 pm ET

• Obama limits exec pay. Obama will announce today a policy of capped compensation for top executives at companies receiving 'exceptional' federal aid in the future. The cap will go into effect at $500,000 annually. Any additional compensation will have to be paid in restricted stock that won't vest until taxpayers have been paid back. The new cap will also require increased transparency in the use of corporate jets, office renovations, holiday parties and golden parachute offers. The cap will not be applied retroactively to companies that have already received rescue money.
• Backing toxic assets. Toxic-asset guarantees are gaining momentum as talks continue on possible bank-rescue plans. Treasury's Geithner is skeptical of setting up an official 'bad bank' and the guarantees would focus on troubled illiquid assets without taking them off banks' balance sheets. Senator Charles Schumer called debt guarantees 'a favorite choice' vs. a bad bank plan that could cost as much as $4T. Not everyone is on board, however. Former Fed governor Mishkin is one of the supporters of the bad bank idea, warning "you have to make sure that when all is said and done, you actually have financial firms that are either healthy and the ones that are not healthy can’t stay in business." Obama will likely release a comprehensive plan sometime next week.
• Live Nation Ticketmaster? Sources say Ticketmaster (TKTM) and Live Nation (LYV) are in merger talks and could announce a deal as early as this week. Combining the two companies would create a music industry powerhouse with a combined market value of over $700M and ties to over 200 artists. If the companies move forward with a merger, they could potentially face antitrust issues from managers, record companies, ticketing companies and concert promoters. Talks are said to be in an advanced stage, but it is not yet clear which company will be acquiring the other.
• AT&T eyes wireless assets. Verizon Wireless (VZ) needs to divest around $3B in wireless assets as part of its purchase of Alltel Corp., and rival AT&T (T) is emerging as a strong bidder. Though other companies are interested in the assets as well, AT&T is in the strongest financial position and could walk away with a large chunk of the assets. Critics say the assets, including 2.1M wireless subscribers in 22 states, shouldn't be transferred from one giant telecom provider to another since it's not in the interest of consumers. The Department of Justice has already said it will examine the sales to make sure there are no competitive issues.
• Panasonic pans to loss. Panasonic (PC) warned it will post an annual loss of ¥380B ($4.2B) vs. previous guidance for a ¥30B profit, and will cut 15,000 jobs as it faces slowing demand and a stronger yen. Panasonic is the world's No. 1 plasma TV maker but the strong yen has taken away the company's competitive edge overseas. "Sales fell in all our business segments in the third quarter," said Panasonic director Makoto Uenoyama. "We expect sharper sales declines in this quarter, and profits are likely to shrink in every segment."
• Mining giant takes profit hit. BHP Billiton (BHP) reported H1 profit fell a larger-than-expected 57% on the costs of closing mines and plants after a precipitous fall in metal prices. Net income fell to $2.6B. CEO Marius Kloppers said reduced demand for steel will have a 'pronounced impact' on this half's earnings along with the weak outlook for the global economy. Cashflow from operations rose 74% to $13B, and the company raised its H1 dividend 41% to $0.41.
• Elpida may seek aid. Japan's Elpida (ELPDF.PK), the world's third-largest maker of memory chips, may seek public funds under a Japanese government program designed to help non-financial companies during the global economic crisis. Elpida could ask for hundreds of millions of dollars and would likely be granted the money in exchange for issuing stock to the Development Bank of Japan. Elpida has been hit by falling chip prices and declining demand. Shares +6.2% in Tokyo.
• Retail sales. Retail chain store sales rose 1.6% from a week ago, ICSC reported, and dropped 2.5% Y/Y. "Though January ended with a solid sales increase for the week, sales volatility clearly continues for retailers and the industry amid a weak year-over-year trend." According to Redbook, national chain store sales fell 2.7% in the first four weeks of January, worse than the expected 2.2% fall. Sales -2.3% Y/Y. Bad weather hurt sales, though snack foods and beverages got a Super Bowl bump.
• Home sales improve. December's pending home sales rose 6.3% to 87.7, NAR said, citing improved affordability conditions. The gain, "spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month."
• Mortgage apps rise. Mortgage applications rose 8.6% from a week ago, MBA says, on a seasonally adjusted basis. The average interest rate on 30-year fixed-rate mortgages increased to 5.28% from 5.22%.

Earnings: Wednesday Before Open

• Alcatel-Lucent (ALU): Q4 loss of €3.89B, its eighth straight, including a writedown of €3.91B on goodwill and intangible assets. Analysts expected a profit of €159M net of any writedowns. Sales fell 5.3% to €4.95B, vs. €4.8B consensus. (PR)
• ITT Industries (ITT): Q4 EPS of $0.82 beats by $0.05. Revenue of $2.9B (+16.5%) vs. $2.7B. (PR)
• Kraft (KFT): Q4 EPS of $0.43 misses by $0.01. Revenue of $10.77B (+6.2%) vs. $11.29B. Sees 2009 EPS of $1.88 vs. $2.02 due to currency effect and pension costs, partially offset by improved performance. (PR)
• PP&L (PPL): Q4 EPS of $0.46 in-line. Revenue of $2.5B (+56.6%) vs. $1.5B. (PR)
• Thermo Fisher (TMO): Q4 EPS of $0.88 beats by $0.05. Revenue of $2.6B (+1.0%) in-line. (PR)
• Time Warner (TWX): Q4 EPS of $0.23 misses by $0.03. Revenue of $12.3B (-2.7%) vs. $12.7B. (PR)
• Time Warner Cable (TWC): Q4 EPS of $0.35 beats by $0.03. Revenue of $4.4B (+7.7%) in-line. (PR)
• Windstream (WIN): Q4 EPS of $0.25 in-line. Revenue of $777.5M (-4.8%) vs. $780.9M. (PR)

Earnings: Tuesday After Close

• Ace Ltd. (ACE): Q4 EPS of $1.87 beats by $0.07. (PR)
• Alliance Data Systems (ADS): Q4 EPS of $1.19 beats by $0.03. Revenue of $508M (-2.7%) vs. $528M. Sees 2009 EPS of $5.15-5.20 vs. $5.07. (PR)
• BRE Properties (BRE): Q4 FFOs of $0.68 misses by $0.04. Revenue of $88.3M (+4.6%) vs. $89.6M. (PR)
• Centex (CTX): FQ3 EPS of -$5.34 misses by $2.07. Revenue of $872M (-53.4%) vs. $895M. Finishes quarter with $1.47B in cash. "We continued to move with urgency to reduce our cost structure, accelerating overhead reductions and further reducing land-related spending." (PR)
• Disney (DIS): FQ1 EPS of $0.41 misses by $0.10. Revenue of $9.6B (-8.2%) vs. $10.07B. (PR)
• Electronic Arts (ERTS): FQ3 EPS of $0.56 misses by $0.32. Revenue of $1.65B vs. $1.9B. To reduce workforce by 11% (1,100 jobs). Sees 2009 EPS of -$0.35 vs. $0.60 and revenue of $4.2-4.25B vs. $4.68B. (PR)
• Illumina (ILMN): Q4 EPS of $0.24 beats by $0.07. Revenue of $161M (+42.9%) vs. $155M. (PR)
• Leggett & Platt (LEG): Q4 EPS of $0.03 misses by $0.05. Revenue of $882M (-15.1%) vs. $863M. (PR)
• Massey Energy (MEE): Q4 EPS of $0.63 misses by $0.16. Revenue of $755M vs. $799M. (PR)
• MetLife (MET): Q4 EPS of $0.19 beats by $0.05. Revenue of $13.96B vs. $12.51B. (PR)
• Nalco (NLC): Q4 EPS of $0.36 beats by $0.13. Revenue of $1.03B (-0.3%) in-line. "It will be a difficult year, with expectations for unusually negative currency impacts and continued downward pressure across the global, industrial economy. Our expectation is that we will outperform relative to our competitors." (PR
• Pioneer Natural Resources Company (PXD): Q4 EPS of -$0.15 misses by $0.21. Revenue of $473M (-11%) vs. $477M. (PR)
• Riverbed Technology (RVBD): Q4 EPS of $0.19 beats by $0.01. Revenue of $92.2M (+20.8%) vs. $90.2M. (PR)
• Trimble Navigation (TRMB): Q4 EPS of $0.24 beats by $0.01. Revenue of $268M (-14.3%) vs. $272M. (PR)
• UnumProvident (UNM): Q4 EPS of $0.63 beats by $0.01. Revenue of $2.32B (-12.1%) vs. $2.62B. Sees 2009 EPS of $2.45-2.55 vs. $2.64. (PR)
• Yum! Brands (YUM): Q4 EPS of $0.46 beats by $0.01. Revenue of $3.38B (+3.7%) in-line. "It is important to note that we do not need to access the credit markets in 2009 to finance our company and our strong cash flow and balance sheet provide us with the flexibility to successfully navigate through these challenging financial times." (PR)

Today's Markets

• Asia markets closed in the green. Nikkei +2.7% to 8,039. Hang Seng +2.25% to 13,064. Shanghai +2.3% to 2,108. BSE +0.6% to 9,202.
• In Europe at midday, London +0.4%. Paris +1.1%. Frankfurt +0.8%.
• U.S. futures: Dow -0.1%. S&P +0.01%. Nasdaq -0.2%. Crude +1.7% to $41.49. Gold +0.9% to $900.20.

Wednesday's Economic Calendar

• 7:00 MBA Mortgage Applications
  7:30 Challenger Job-Cut Report
  8:15 ADP Jobs Report
  10:00 Treasury Refunding Announcement
  10:00 ISM Non-Manufacturing Survey
  10:30 EIA Petroleum Status
• Notable earnings before Wednesday's open: AGN, ALU, ARM, CLX, DVN, FNF, GR, ITT, KFT, NI, NOV, PM, PPL, R, RL, SLE, TMO, TWC, TWX, WIN
• Notable earnings after Wednesday's close: AIZ, AKAM, ATML, ATW, AVB, BMC, CBL, CNQR, CSCO, EFX, EOG, EQR, FMC, HAR, HRS, NDN, NVLS, ONNN, PHM, PRU, REG, SUN, THQI, TMK, V, XRAY

Seeking Alpha editor Eli Hoffmann contributed to this post.

At the beginning of each calendar year, I sit down and see how my expenses have tracked over the past year. I make a table and a pie chart to show my wife. She is always amazed at how much goes to taxes, though the new amazement is what it takes to put children through college. We spend some time discussing plans for the next year. Since my wife is not money-oriented (not a big spender, and focused on teaching the children) this gives her a quick way to get reoriented in our financial situation.

After that, I look at investment income. 2008 was an unusual year for me in this way: it was the first year in my working life that my net worth fell. Though painful, at age 48, I’m grateful that I have had a good past.

This is the Third Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here.

Next up, we have Andreas Halvorsen's Viking Global. Andreas Halvorsen is one of the many 'Tiger Cub' fund managers we cover here on the blog. 'Tiger Cubs' are the progeny of legendary investor and hedge fund manager Julian Robertson of Tiger Management. Many of the critical members of Tiger started their own funds, and Halvorsen is no different. We've already covered a few other 'Tiger Cub' portfolios in our hedge fund tracking series, including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, and John Griffin's Blue Ridge Capital. Although both Andreas Halvorsen of Viking Global and Stephen Mandel Jr. of Lone Pine Capital both learned the tricks of the trade under Robertson in their time at Tiger Management, both have taken what they've learned and added their own spice to the value oriented, yet growth at a reasonable price (G.A.R.P.) tolerable investment style. Halvorsen attended Williams College and received his MBA from Stanford, while his work history includes stays at Morgan Stanley and Tiger.