By Larry Gellar
We’ve identified 5 stocks that have their 20-day simple moving average crossed below their 50-day simple moving average. That means a bearish trend could be under way, creating opportunity for some interesting options plays. While Nvidia (NASDAQ:NVDA) and Oracle (NYSE:ORCL) are fundamentally strong companies, Yahoo (YHOO) has a lot of uncertainty surrounding it. Meanwhile, Huntington Bancshares (NASDAQ:HBAN) and Las Vegas Sands (NYSE:LVS) are two high-beta stocks that should be rather volatile. Let’s see what specifically has been happening with these 5 stocks:
Huntington Bancshares Inc. is down significantly year-to-date, although the company might be able to turn things around with its Huntington Asset Services subsidiary. In fact, Huntington Asset Services will be adding four new clients – here’s what Brian Blomquist, the president’s subsidiary, had to say:
We continue to believe it is an ideal time for investment managers to launch new funds…I’m proud of the turnkey approach we take at Huntington Asset Services, as it helps increase the success for our clients.
In other news, Huntington Bancshares will now be subject to the Federal Reserve’s Comprehensive Capital Analysis and Review. Essentially a stress test for banks, the first two rounds were completed without Huntington since it is a relatively small bank.
Important competitors for Huntington include Fifth Third (NASDAQ:FITB), JPMorgan Chase (NYSE:JPM), and KeyCorp (NYSE:KEY). HBAN has the highest price to earnings ratio out of those stocks but the lowest price/earnings to growth ratio. Meanwhile, operating margin of 35.67% and quarterly revenue growth of 11.40% are about average for the industry. As for cash flows, $673 million flowed out of the bank during 2010 while $1.342 billion flowed in during the first 9 months of 2011. The reverse in cash flows was mostly due to decreased outflows related to investing activities.
Las Vegas Sands Corp. has been up and down all year long, but some stability could finally be on the way. The Securities and Futures Commission of Hong Kong has decided that it will not take action against the Sands China subsidiary for potential breaches of the Foreign Corrupt Practices Act. In fact, industry experts believe that this will also clear Las Vegas Sands from any wrongdoing on this side of the ocean.
Meanwhile, TheStreet.com has Las Vegas Sands as one of its 5 Casino Stocks to Bet On in 2012. With analysts raving about the stock and earnings growing quickly, LVS could be a buy right now. Future plans for Ho Chi Minh City also have investors tremendously excited. The $2 billion project will have a wide variety of amenities.
Important competitors for Las Vegas Sands include MGM Resorts (NYSE:MGM) and Wynn Resorts (NASDAQ:WYNN). In fact, value metrics like price to earnings, price/earnings to growth, and price to sales are quite similar between Las Vegas Sands and Wynn. Additionally, both companies have impressive margins, with Las Vegas Sands running at an operating margin of 25.02%. As for cash flows, $1.918 billion flowed out during 2010 for Las Vegas Sands, while $914 million came in during the first 9 months of 2011.
NVIDIA Corporation is a little below where it started the year, but CEO Jen-Hsun Huang remains quite bullish for 2012. As originally reported by Monica Chen and Joseph Tsai from DigiTimes, Huang believes that tablets from Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) will become more popular next year as the companies find ways to improve upon performance and how they integrate with other devices. That’s important for Nvidia since more tablet sales from Google and Microsoft mean more revenue for Nvidia. In other news, Nvidia will release the source code for its CUDA platform. This move should bode well for the company because it will allow for both increased performance and better compatibility.
Important competitors for Nvidia include Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC). Those stocks have lower price to earnings ratios, while Nvidia falls in the middle for price/earnings to growth and price to sales. In fact, Nvidia’s gross margin and operating margin also fall in the middle of AMD and Intel. As for cash flows, $218 million flowed in during fiscal year 2011, while $98 million flowed out in the 9 months after that. Higher investing expenditures have been the main cause of the cash flow turnaround.
Oracle Corporation has held pretty steady this year, but a poor earnings report has sent the stock plummeting. Of biggest concern were the company’s software sales, and Oracle executives lowered their future projections for that segment as well. Additionally, hardware sales actually declined, and the company is being greatly affected by economic problems throughout the world.
On the other hand, Oracle may have taken too much of a beating from the earnings miss. That’s where some investors see a bargain, and this bullish article explains some reasons why ORCL stock could be a buy. Regardless of the earnings situation, Oracle is still an immensely strong company financially. Furthermore, its strong track record of acquisitions should help the company bounce back from the earnings disappointment.
Important competitors for Oracle include IBM (NYSE:IBM), Microsoft, and SAP (NYSE:SAP). Oracle has the lowest price/earnings to growth ratio out of those stocks, but its price to sales ratio is the highest. Margins-wise, Oracle is quite strong – those numbers are 77.26% gross and 36.79% operating. As for cash flows, $6.249 billion came in during fiscal year 2011, while $3.001 billion flowed out during the 3 months after that. The turnaround in cash flows was mostly caused by financing outflows, specifically the retirement of debt.
Yahoo Inc. is only a bit lower than where it started 2011, but the company has truly been on a roller coaster ride. After firing its CEO, Yahoo has become one of the hottest takeover targets on the market. The question for Yahoo shareholders though is what should the company do to maximize value. As discussed here, Microsoft and Alibaba are probably the best suitors, but a variety of private equity firms remain in the mix.
In fact, there’s certainly reason to believe that if private equity firms take the company over, Yahoo’s head count will be greatly reduced. One market observer even says that 50% to 75% of Yahoo’s employees could be laid off.
Important competitors for Yahoo include AOL (NYSE:AOL) and Google. Yahoo has the lowest price to earnings ratio out of those companies, while its price/earnings to growth ratio and price to sales ratio fall in the middle. Meanwhile, margins for Yahoo are pretty good – those numbers are 67.88% gross and 15.89% operating. As for cash flows, $251 million flowed in during 2010, while $62 million flowed out in the first 9 months of 2011. The reverse in cash flows was mostly due to decreased inflows from investing activities.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.