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Schaeffer's Daily Market Blog Features: Dean Foods, International Game Technology, Cisco Systems, JetBlue Airways, and UnitedHealth Group.

CINCINNATI -- Among the stocks featured in the November 7 edition of Schaeffer's Market Blog are Dean Foods (NYSE:DF), International Game Technology (NYSE:IGT), Cisco Systems (NASDAQ:CSCO), JetBlue Airways (NASDAQ:JBLU), and UnitedHealth Group (NYSE:UNH). Schaeffer's Market Blog is just one of the many free market commentaries written every day at - 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. To have this report delivered to you free via email every day click on the following link and you'll also get an opportunity to win an iPod Nano.

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10:41 AM Dean Foods for Thought

This morning, Dean Foods (NYSE:DF) posted third-quarter earnings of $70.8 million, or 51 cents per share. These results are lower than last year's same-quarter profit of $99.4 million, or 64 cents per share. Excluding items, the company earned 56 cents per share. The food and beverage company saw revenue of $2.52 billion for the quarter. On average, analysts were expecting earnings of 56 cents per share on revenue of $2.59 billion. The miss in revenue is a major catalyst for this morning's drop of nearly five percent for DF.

Turning an eye to the future, DF stated that it is comfortable with expectations for adjusted earnings of $2.10 to $2.12 per share for 2006. The current Street estimate for 2006 stands at $2.14 per share (another catalyst for today's move lower). For 2007, DF expects 11 to 13 percent growth in adjusted earnings.

11:09 AM International Game Technology Reports

King of the slot-machine world, International Game Technology (NYSE:IGT), said it banked $114.9 million, or 33 cents per share, during the fourth-quarter reporting period. The previous year, IGT had banked $105.4 million, or 30 cents per share. Excluding items, IGT would have earned 35 cents per share, or a penny ahead of the consensus estimate. Revenue rose five percent during the latest three months to $638.7 million, atop Wall Street's consensus view of $627.8 million.

Investors were apparently hoping for a little more oomph from IGT; the stock has dropped more than four percent today. This backslide has taken the shares into potential support from their 10-week moving average. IGT has not endured a weekly close beneath this intermediate-term trendline since mid-July. The stock is also hovering above the 40 level, which is a significant strike from an options perspective. The 40 mark is home to peak call and put open interest in the November series. What's more, the January 40 call is the second-most popular call in terms of open interest, with about 7,000 open positions; the January 40 put is a close second as well, with about 5,500 open put bets.

12:15 PM Cisco's Showdown at the 25 Corral

As I mentioned yesterday in "Options Update," call activity is the soup de jour for Cisco Systems (NASDAQ:CSCO) heading into its earnings announcement tomorrow. Roughly 5,000 calls were added to the stock's November 25 strike yesterday, and more than 16,000 have already crossed the tape at this front-month option so far today. As a result of yesterday's activity, nearly 80,000 bullish bets now reside at November 25 call, creating quite a layer of potential options-related resistance for the equity. Looking at an intraday chart, though, investors are trying their darnedest to push CSCO above this region. The stock is up more than one percent so far today, with an intraday high of $25 exactly.

With reporting that the company's whisper number resides some four cents higher than Wall Street expectations, this situation keeps getting more and more interesting. A breach of 25 ahead of the firm's earnings report doesn't scare me away from my bearish stance; it's just farther for CSCO to fall on the news of a mediocre to lackluster report. Sell on the news, anyone?

2:53 PM Options Antics on JetBlue Airways

JetBlue Airways (NASDAQ:JBLU) has gained more than five percent this afternoon following an upgrade to "market perform" from Raymond James. All the excitement has spurred some activity among options traders. Most notably active are the January 12.50 put (JGQ MV) and the March 15 put (JGQ OC). The January position, newly out of the money, has seen more than 13,500 contracts trade on existing open interest of 10,561. The March strike, meanwhile, has seen more than 27,000 positions trade on this in-the-money put, which this morning was home to fewer than 2,000 open contracts.

At high noon, a block of 10,000 contracts traded on the January 12.50 put at the ask price of 0.70 per contract. Simultaneously, a 20,000-contract block crossed the tape at the ask price of 2.60 per contract. This is likely a diagonal spread at work, given the different expiration dates and strike prices (but the similarity in block size and timing). A ratio backspread is probably not the intended strategy, since twice as many of the in-the-money position were acquired. This will be an interesting one to watch tomorrow morning when the open-interest translations come through.

2:58 PM UnitedHealth Up on Republican Victory?

With about an hour to go, we've got some interesting developments. The main thing on everyone's mind is the election and will the Republicans remain in power or will the Democrats take over. One area that is expected to struggle if the Democrats take over is HMOs. However, the group is doing pretty well today, led by a 2.5-percent jump in UnitedHealth Group (NYSE:UNH). Could this be smart money buying ahead of a Republican victory?

For more information on these stocks or any stock in your portfolio, feel free to visit our Schaeffer's Equity Scorecard feature. Click here to read all of today's Market Blog:

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About Schaeffer's Investment Research (

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website,, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology:
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Publication:Business Wire
Date:Nov 7, 2006
Previous Article:True Religion Apparel Reports Continued Revenue, Income Growth for 2006 Third Quarter.
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