Filed under: Major movement, Analyst reports, Bad news, Industry, Expedia Inc (EXPE), Options, Technical Analysis

Priceline.com (NASDAQ: PCLN) shares are falling this day after an analyst at Citi Investment Research reiterated his hold rating on PCLN and dropped his price target to $142, citing weakness in European travel. Citi also removed competitor Expedia (NASDAQ: EXPE) from its Top Picks Live list, cut the price target on EXPE as well. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on PCLN.

After hitting a one-year low of $59.50 in August, the stock hit a one-year high of $144.34 in Might. This morning, PCLN opened at $119.78. So far this day the stock has hit a low of $114.38 and a high of $121.95. As of 12:10, PCLN is trading at $117.95, down $7.18 (-5.7%). The chart for PCLN looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would think about an August bear-call credit spread above the $155 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we’ll make a 5.3% return in seven weeks as long as PCLN is below $155 at August expiration. PCLN would have to rise by more than 32% before we would begin to lose money. Learn more about this type of trade here.

PCLN hasn’t been above $145 at all in the past year and has shown resistance around $132 recently. This trade could be risky if the company’s earnings (due out in early August) are a positive surprise, but even if that happens, this position could be protected by resistance PCLN might find around $140, where it topped out in Might.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in PCLN or EXPE.

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Filed under: Forecasts, Deals, Industry, AT and T (T), Verizon Communications (VZ)

Verizon (NYSE: VZ) is making a fairly concerted effort to get Vodafone (NYSE: VOD) out of its equity position in Verizon Wireless. The question is, why would Vodafone get out? Verizon Wireless makes a lot of money.

According to the FT, the head of Verizon, Ivan Seidenberg said, “Would I like to have 100 per cent of the earnings given we’re doing 100 per cent of the work? Yeah, I would.”

Verizon Wireless does not pay dividends to Vodafone, so it does not get much of a cash benefit from its piece of the pie, but the FT points out that the British company’s stake is worth about $60 billion.

Reflecting on the debate, it would probably be in the best interests of Vodafone shareholders to sell out to Verizon. Their benefits of ownership are limited. Vodafone could use the cash for expansion in Europe, Asia, and the Middle East.

Perhaps the greatest reason for Vodafone to make a graceful exit is the US market itself. Growth of wireless subscribers is slowing as the market reaches a point of saturation. Competition is tough, especially with AT&T (NYSE: T) having about the same number of subscribers as Verizon Wireless. A price war could take down margins at both companies.

Vodafone’s stake may never be worth more than it is now.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Industry, Apple Inc (AAPL), Motorola (MOT), Nokia Corp. (NOK)

Handset maker Sony-Ericsson stated it is having a tough time. According to The Wall Street Journal (subscription required), “the mobile-phone maker continues to be hit hard by a weakening economy in Western Europe, hurting demand for the mid- to high-end handsets it specializes in.”

Of course, another huge market for more expensive phones is America, Motorola’s (NYSE: MOT) last stronghold. The U.S. company faces a double threat now. It does not have any “hot” model to compete with new products from Nokia (NYSE: NOK), Samsung, or Apple (NASDAQ: AAPL). Now it appears that the recession is slicing demand for phones altogether.

Motorola may already be at a place where its handset operation cannot recover. Revenue in the division is dropping rapidly, and the unit is losing money. Its share of the global market has dropped from 22% two years ago to about 12%. And, the company’s stock is down to a 52-week low of $7.20, about 65% down from its 52-week high.

No matter how hard it may be for other companies in the industry, the only firms that might do well over the next year are Nokia and specialized handset makers like Apple. Nokia has about 40% of the global market and sells modestly priced phones in rapidly growing markets including China and India. Apple gets the high end of the market.

In the middle is Motorola, with barely a hope of things getting superior.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Products and services, Consumer experience, Marketing and advertising

This post is part of our Big Company, Small Town series, featuring big companies and the small towns in which they’re headquartered.

In a remote section of Louisiana, almost 140 miles west of New Orleans, lies the land of Tabasco. Avery Island is home to McIlhenny Co., the family owned and operated makers of Tabasco since 1868. The island is home to only 160 residents, mainly McIlhenny workers, as well as the McIlhenny family. Paul McIlhenny, the current president, is the sixth McIlhenny to continue the Tabasco legacy of its founder, Edmund McIlhenny.

McIlhenny Co. is a leader in hot sauce products, labeled in 22 languages and dialects, and is sold in more than 160 nations. According to Jeffrey Rothfeder, author of McIlhenny’s Gold: How a Louisiana Family Built the Tabasco Empire, the private company earns almost $250 million in annual revenues. In addition to Tabasco, McIlhenny also co-brands and produces various forms of products, from salsas and Tabasco lollipops to cookbooks and clothing. They even make a 1-gallon glass jug of Tabasco for all of those who can’t get enough of the hot sauce. This spicy condiment can be found in millions of restaurants around the globe, in soldiers’ rations overseas, and is proudly used in my kitchen.

Two of the three main ingredients of Tabasco — Avery Island salt and Capsicum frutescens peppers — are found on the island. The pepper sauce is still made practically the same way it was 140 years ago, except the aging process has been extended to three years, not 60 days.

It might surprise you that Avery Island is a hot spot for visitors. The small island in the middle of the bayou is home to the Tabasco visitor center, which includes a walk through of the pepper sauce factory, but that’s only part of the experience. In the early 1890s, Ned McIlhenny, the son of Edmund McIlhenny, converted part of the island into what is now a 250-acre nature preserve called Jungle Gardens, which has been open to the public since 1935. Tourists can walk through the gardens and see numerous varieties of azaleas, Japanese camellias, and live oak groves. In addition to the flowers and plants, bears, alligators, and deer live in the hills and marshes. The area is also home to Bird City, a bird sanctuary where snowy white egrets and other water birds migrate to year after year.

If you’re a Tabasco lover, Avery Island needs to be on your places-to-see list.

Be sure to check out more Huge Company, Small Town posts.

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Filed under: Products and services, Industry, Marketing and advertising, Entrepreneurs

This post is part of our Huge Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

Oshkosh B’Gosh, the well-known children’s clothing manufacturer, was founded in Oshkosh, Wisconsin, in 1895. As are most of the cities in Wisconsin’s Fox River Valley, Oshkosh was incubated first on the fur trade in the early 1800s, then was built upon the railroads and the lumber industry, and finally, it rests on light and medium manufacturing and the pursuit of higher education and culture. Currently, Oshkosh has a population in the neighborhood of 65,000, and it covers more than 24 square miles.

Oshkosh B’Gosh is probably the best-known namesake of its home city. Though the company’s manufacturing operations have been moved away, it still maintains its corporate headquarters there. The company began as a manufacturer of sturdy clothes for working people, most especially its trademark overalls. It wasn’t until the mail-order company Miles Kimball featured Oshkosh B’Gosh overalls in one of its catalogs that the company moved its products into retail stores. At that time, Oshkosh B’Gosh expanded its children’s clothing line, which would eventually become the company’s mainstay.

Two other companies have carried the name Oshkosh to great heights in the business world. One is Oshkosh Corporation (NYSE: OSK), formerly called Oshkosh Truck, and the other was Chief Oshkosh Beer. However, perhaps the most renowned feature of Oshkosh is the yearly Experimental Aircraft Association Airventure air show (EAA). During that annual event, Wittman Regional Airport in Oshkosh, becomes the busiest airport in the world.

A visit to Oshkosh, Wisconsin, where my mom still lives and works, reveals a beautiful city that maintains a very high level of civic pride and community involvement. The roots of culture, concern, and pride run deep throughout the city and are well-reflected in world class events, art, architecture, and public grounds. Time spent within Oshkosh should include a visit to the EAA Airventure Museum, The Paine Art Center and Gardens, and the Leach Amphitheater, which is on the banks of the beautiful Fox River. With all the excitement, interest, and entertainment that Oshkosh has to offer, it’s no wonder that Oshkosh B’gosh, which recently merged with Carter’s Inc. (NYSE: CRI), maintains its corporate headquarters there.

Be sure to check out more Big Company, Small Town posts.

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The Federal Reserve says the celebration is over

Filed under: Economic data, Housing, Federal Reserve

Are the days of wine, roses and interest rate cuts over? The answer for now seems yes.

In a statement released today, the Federal Open Market Committee stated it decided to keep its target for the federal funds rate at 2% because data indicates that labor markets have soften further and financial markets remain under stress. Moreover, the credit crunch, the lousy housing market and rising energy prices are “likely to weigh on economic growth for the next few quarters.” No kidding.

The FOMC’s decision, which comes amid growing fears about the outlook for inflation, should not have come as a shock to investors. Federal Reserve Chairman Ben Bernanke and other top bankers have hinted for months that the days of wine, roses and interest rate cuts would be coming to an end. In fact, the market seemed to have already absorbed the market. The major stock market averages barely budged after the announcement was issued.

What will be interesting to watch is what happens next.

As the Wall Street Journal notes, the Fed wants to avoid raising rates for now. “They’re also trying to signal they’re serious about fighting inflation by talking about the risks of rising inflation expectations and suggesting a willingness to act swiftly if inflation expectations get out of hand,” the paper says.

That’s going to be a tough rabbit to pull out of the hat.

Former Fed governor Lyle E. Gramley told The New York Times, “I don’t think we’re out of the woods yet and I don’t think the Fed does either.”

Fasten your seatbelts investors, things are going to get interesting over the next few months.

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Filed under: Before the bell, Major movement, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), General Motors (GM), Anheuser-Busch Cos (BUD), ConAgra Foods (CAG), NIKE, Inc’B’ (NKE), Red Hat Inc (RHT), Palm Inc (PALM)

Before the bell: Futures lower on financials, tech concerns

Reporting today:
Palm Inc. (NASDAQ: PALM) is expected to post a loss of 22 cents a share in the fourth quarter.
ConAgra Foods (NYSE: CAG) is expected to post earnings of 34 cents a share in the fourth-quarter .

Nike Inc. (NYSE: NKE) reported late Wednesday a rise in quarterly profit of 12% to $437.9 million, or 86 cents a share, helped by gains in Europe and Asia. Sales jumped 16% to $5.1 billion. The earnings beat Wall Street’s forecast. Shares are down 4.8% in premarket trading.

Anheuser-Busch Cos. (NYSE: BUD) will likely officially reject InBev NV’s $46.3 billion takeover bid this week and announce plans to lower $1 billion in costs, pay a special dividend and sell off divisions like its theme-park unit to increase its stock price. InBev may then raise its offer.

Yahoo Inc. (NASDAQ: YHOO) defended the deal it made with online search leader Google Inc. (NASDAQ: GOOG), saying it is a more desirable partner than Microsoft Corp. (NASDAQ: MSFT). Yang, Yahoo’s CEO, wrote so in a letter Wednesday. The letter is part of Yahoo’s campaign to protect its strategy and board against a revolt led by activist investor Carl Icahn.

Goldman Sachs downgraded General Motors Corp. (NYSE: GM) to Sell from Neutral and cut its price target to $11 from $19. Most troubling is that the broker said that liquidity concerns could increase. Goldman cut its rating of two other sector stocks as well. Shares are down 5.6% in premarket trading to $12.09.

Red Hat (NYSE: RHT) reported first-quarter results Wednesday after the close. Profit rose almost 7% and revenues grew 32%, inline with estimates. Shares are down 4% in premarket trading.

Telefonica SA said Wednesday it has received 300,000 pre registrations in the U.K. and Spain to purchase Apple Inc.’s (NASDAQ: AAPL) new third- generation iPhone.

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Filed under: Deals, Press releases, Products and services, Marketing and advertising, Sony Corp ADR (SNE)

British band Oasis have reportedly signed a new record deal with Sony BMG Music Entertainment via the band’s own record label Big Brother Recordings. Large Brother will release the band’s new material while Sony BMG, a joint venture of Sony (NYSE: SNE) and Germany’s Bertlesmann Media Group, handles distribution of the new album and the band’s back catalog in all markets, and the two companies will share profits. Music newspaper NME additionally reports that all signs indicate the first album as part of the new arrangement will be released this fall.

The band has been associated with Sony BMG in some form or another since its first album was released in 1994. Creation Records, the band’s first label in the United Kingdom, handled distribution and release there, while Sony handled the same duties in other markets, including the United Says. When Creation folded in the late 90s and Huge Brother was set up, the same arrangement was kept. The band’s last album of new material was released in the U.S. by Sony BMG’s Epic Records, while the band’s final album under the old contract, a “best of” compilation, was released by Columbia Records.

Oasis’ management reported that the band is excited about the deal and the prospects that it gives the band in “building on the band’s already considerable international success.” The band’s management reported that the new deal “allows the band to take advantage of all the opportunities presented by the new business models available this day as well as remaining completely in control of their own destiny.” Other band’s at the same level of international success as Oasis, like Radiohead or Nine Inch Nails, have pursued different business methods than more traditional record labels.

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The week in preview: Undercovered

Filed under: Earnings reports, NIKE, Inc’B’ (NKE), Housing

It is going to be an interesting week. The Fed and oil will be at odds, and tempers are sure to flare on the trading floors. There are many earnings and eco reports we’re looking at, and it is hard to choose which will be front and center. Traders and investors will be closely following each move by the Fed as they will be releasing a policy statement at 2:15 p.m. on Wednesday.

Also, stocks within the homebuilders group will be front and center as a few key players will share their earnings results. Have you seen the charts of these companies lately? Click for a good comparison. And after you take a peek, you might also wonder if they’re actually stock charts or ski slopes. So with that as the backdrop, here are a few names that may actually be undercovered and worth a look.

Tuesday, June 24

Anything related to the vehicle industry has been under siege of late, and I can’t envision how that will change anytime soon. HB Fuller Co. (NYSE: FUL) is involved in the manufacturing of the industrial performance/adhesive products for the assembly/packaging and car markets. The fact that the economy is lagging would lead one to the realization that, unless we see a swift turnaround of epic proportions, the reality of a lower share price will come with the next earnings release. Several down days of late have also had increasing volume, and that is not a good sign for a stock that’s beginning to show signs of breaking down. Even so, First Call is showing a $0.45 per share quarterly estimate on $347 million of revenue.

Wednesday, June 25

Looking like a “dead cat bounce,” the chart pattern of Jabil Circuit (NYSE: JBL) has seen a massive amount of retracement since the beginning of June as estimates have been rising and investors are looking to get in as it recently broke its 50-day moving average. Now shares have just touched the longer 200-day moving average, and analyst expectations of $0.20 per share on $3 billion of revenue will verify whether the early birds will get their worms.

Nike Inc. (NYSE: NKE) is a name will get some good attention, and merits a look if stability is something you’re after. Earnings have been consistent and the chart is looking splendid. Shareholders seem to be holding the price stable, even with the horrible economic circumstances that seemed to be upon us. Look at a long-term chart and you will see that Nike shares have been on the rise since September of 2006. Overall, the fundamentals are strong and the chart looks solid. Unless there’s a major surprise with the earnings, expected to come in at $0.96 per share, the trend is likely to continue.

Thursday, June 26

Then there is Finish Line (NASDAQ: FINL), a retailer that has 700 stores under the Finish Line logo and another 150 retail stores within the shoe and men’s apparel sector. If you have a moment, check out this chart, as it is really breathtaking. Investors will have to take a moment of thought before entering into this position, with such a significant run down and run up. Unless you’re seeing something that I don’t see, I don’t have any answers to why there has been this level of volatility. Analysts are expecting a loss of $0.05 a share this quarter.

Disclosure: Horowitz & Company clients do not hold positions of any of the stocks mentioned as of the date of publish. Andrew Horowitz is a Money manager and author of the bestseller The Disciplined Investor: Essential Strategies for Success.

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Filed under: Deals, Engagements, Shareholders, Public or private?

Usana Health Sciences (NASDAQ: USNA) closed yesterday at $20.83. This morning, Gull Holdings announced its intention to make an offer to USNA shareholders to acquire all of the outstanding shares of USNA for $26 cash.

USNA is a developer & manufacturer of nutritional and personal care products. The stock is up 22% this day on the acquisition news.

M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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