Category: Stock Option Investment Advice

Merrill Lynch (MER) experienced higher than expected earnings in the fourth quarter. Earnings increased 68 cents to $2.35 per share. Large equity gains and investment banking results were cited as the main reasons for the increase.

Sometimes comical, and always entertaining, stock analyst Jim Cramer answered a question in his mailbag column last Friday afternoon. Today, the PowerOptions’ blog takes a look at Cramer’s comments and offer some option trading suggestions. This blog talked briefly about TiVO’s partnership with Comcast (CMCSA) in the 9 January article, “TiVO Partners for Profits – Covered Call”.

TiVo Inc. (TiVO), the leader in television digital video recorders, announced its partnership with Roxio, a leader in digital media software and subsidiary of Sonic Solutions (SNIC), has yielded the widely anticipated TiVoToGo for the Macintosh operating system. TiVo subscribers with broadband connected TiVo DVRs will be able to transfer programs recorded and stored on their TiVO DVRs to their Macs. The users can also burn the recorded programs to a DVD and enjoy them on portable iPod devices.

Nucor Corp. (NUE), a manufacturer of steel products, announced on 2 January 2007 it has offered $1.07 billion for Harris Steel Group (HSG.TO), a Canadian steel manufacturer. Harris Steel’s board is recommending investors accept the all-cash bid.

Third Quarter Profits Up: Diamond Offshore Drilling Inc. (DO) said Last October its third-quarter earnings doubled. The company noted the demand for its equipment and services had risen substantially driving revenue upward.

In article, “North Korea – Nuclear Bombs – Defense Contractors”, we analyzed the defense contractor industry for covered call stock options opportunities and all of the positions we selected were fully profitable with an average return of +3%. In article, “Defense Contractors Returns Booming +3% for Nov.”, we selected another defense covered calls stock options position for ManTech (MANT) and it was fully profitable returning a very nice +2.5% return in only 19 days.

Options Backdating Investigation: F5 Networks’ (FFIV) shares have experienced a good deal of volatility since late May when it was disclosed that the company was being investigated by the U.S. Department of Justice and the SEC regarding alleged stock option backdating. F5’s shares reached a 52-week low of $40.55 a share in July as the news sank in with investors.

Crude oil reserves have depleted more than expected, a government report released Wednesday found. This development lifted oil prices slightly and OPEC, at its meeting in Abuja (ah-boo-ja), Nigeria last Thursday, announced it would wait until after peak winter demands had subsided before implementing additional production cuts. Light crude January futures rose 92 cents to settle at $63.43 a barrel on the New York Mercantile Exchange on Friday.

Burger King (BKC) stock rose 3.5 percent yesterday to hit a new 52-week high of $20.13. Shares of major fast-food chains are on the rise after industry leader McDonald’s Corp. (MCD) reported same-store sales increased over 6 percent in November. Same-store sales statistics, a metric measuring sales in stores open at least one year, is a key indicator of company health. Analysts expected McDonald’s to report 4.5 percent same-store sales growth. McDonald’s stock was down yesterday after reaching a high of $43.89 on Friday. Some analysts have increased their price target on MCD shares to $44 from $43. Suggesting McDonald’s might produce results exceeding per share profit for 2007.

Accredited Home Lenders Holding Co. (LEND), a residential mortgage lender, reported in early November third-quarter earnings dropped a dramatic 55 percent. Net income dropped to a little over $18 million from just over $41 million in the same period last year.