Filed under: Industry, Competitive strategy, Google (GOOG)

Websites are naked now and have no way to find more clothing. Google (NASDAQ: GOOG) has finally launched the much-rumored service, Trends For Websites. It measures daily one-of-a-kind visitors for all but the smallest world wide web properties.

The first reaction to the product is that it will injured paid services like comScore (NASDAQ: SCOR), but the change Google is making runs deeper than that. No website of any kind, in any part of the industry, will be able to keep its traffic trends from its advertisers, or its competition.

As an example, traffic to msnbc.com has been rising recently. Traffic to CNN.com isn’t doing as well.

Democracy has hit the internet in many ways, but having a opportunity to keep confidential traffic data had not made it into that realm. Web publishers had some privacy about the size of their businesses. Now, that has changed, too.

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

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Filed under: Major movement, Earnings reports, Bad news, Industry, Research in Motion (RIMM), Palm Inc (PALM), Options, Technical Analysis

Palm, Inc (NASDAQ: PALM) shares are falling this day after after the company reported a fourth-quarter loss $43.4 million, or 40 cents per share. PALM’s adjusted loss of 22 cents per share was worse than analysts’ predictions of an 18 cent loss. That this news comes one day after Canadian competitor Research in Motion (NASDAQ: RIMM) also tumbled on their earnings release does not bode well for the economy or gadget-makers in general. 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 PALM.

After hitting a one-year high of $19.23 in October, the stock hit a one-year low of $4.21 in March. This morning, PALM opened at $6.15. So far today the stock has hit a low of $5.79 and a high of $6.37. As of 12:40, PALM is trading at $5.85, down 69 cents (-10.6%). The chart for PALM looks bullish but deteriorating slightly, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.

For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $7.50 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 will make an 11.1% return in five months as long as PALM is below $7.50 at November expiration. Palm would have to rise by more than 27% before we would start to lose money. Learn more about this type of trade here.

PALM hasn’t been above $7.50 by more than a few cents since November and has shown resistance around $6.80 recently. This trade could be risky if the economy finds its footing, but even if that happens, this position could be protected by resistance PALM might find at its 200 day moving average, which is currently around $8 and falling.

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 PALM or RIMM.

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Filed under: Bad news, Industry, Economic data, Nissan Motors (NSANY)

Nissan Motors (NASDAQ: NSANY) thinks that the US market will account for less than 15 million vehicles sales this year. Last year that figure was 16.1 million. The Japanese company states it is preparing for the worst. That is too bad, because Nissan tends to sell smaller, more fuel-efficient cars and not massive pick-ups and SUVs. If it thinks the market for its products will get much softer, its says something about the entire industry.

According to Reuters, Nissan’s CEO, Carlos Ghosn, said: “If we take the trend of the market in May and June it looks like we’re going to be much below 15 million. Now I’m not sure if this is going to continue for the rest of year. We’re preparing ourselves for the worst.”

If a typical vehicle sold in the US costs the consumer $25,000, Nissan’s prediction indicates that total sales in the world’s largest car market will fall off by about $30 billion. That is nearly one quarter of Ford’s (NYSE: F) annual sales.

Nissan is probably a good for the overall US market. If drivers are simply holding onto their old vehicles and not moving into the small sedans that the company makes, the troubled US industry might be in for a harder year than expected. Consumers can’t even afford automobiles which can save them money on gas.

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

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Filed under: Products and services, Industry, Competitive strategy, Recession

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

Ever taken a road trip in an RV? If you have, there’s a good chance that you were inside a Winnebago recreational car. The name Winnebago has been synonymous with the huge RV for as long as I can remember. With such a rich history, one would think Winnebago is located somewhere next a major interstate corridor or airport. Otherwise, how would it receive in its raw materials and ship out its completed product?

Winnebago Industries, Inc. (NYSE: WGO) is actually based in Forest City, Iowa, founded in 1958 in Winnebago County (that’s where the company’s name comes from). From its inception, the company has been involved with travel trailers. It used names from Native American tribes to name its different lines of trailers, and in the 1970s and early 1980s, made smaller trailers as gas prices spiked upward. In fact, come this summer, one of Winnebago’s manufacturing plants in Charles City, Iowa, will be closed due to drastic changes in Winnebago’s market due to higher gas prices and declining demand. The company has already laid off 200 employees from its headquarters in Forest City.

Unlike many American companies these days, Winnebago still makes the majority of its products in the United States, most of which are built on top of chassis units made by Ford or Chevy. The term Winnebago has made itself, after more then 40 years, into a brand name totally associated with RVs and trailers. Do you blow your nose with a Kleenex or tissue? Drink Coke or a soft drink? Go on vacation in a Winnebago or travel trailer? There’s the brand power the company continues to have this day, even with the hard times its experiencing.

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

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Filed under: Major movement, Rumors, Industry, Citigroup Inc. (C), Merrill Lynch (MER), Morgan Stanley (MS), Lehman Br Holdings (LEH)

Merrill Lynch & Co. (NYSE: MER), at least according to rumors running amok on trading floors, may issue a profit warning and take additional writedowns on its mortgage holdings. MER shares plunged over 5.5% as a result.

I always cringe a bit when I hear of trading floor rumors. Enjoy it or not, traders have a vested interest so it’s harder for me to take what they state at face value. Much different than when newspapers report without naming sources. At least there, I’d like to believe, journalistic standards should prevail.

Indeed, while Reuters says that “A Merrill spokeswoman declined to comment on the rumors,” CNBC states that sources told it the U.S. broker “is not preparing to issue a profit warning Friday.”

With $30 billion worth of writedowns under its belt, it’s not difficult to believe that Merrill will indeed require additional writedowns, capital raising, or asset sales. Especially in light of what’s been happening the last few weeks. Not only did peers Lehman Brothers (NYSE: LEH) — down 4% — and Morgan Stanley (NYSE: MS) — down 3.5% — posted weak results this week, but financials in general announced one writedown, or capital raise, one asset sale after another.

Indeed, analysts have been slicing their forecast on financials these days, including Merrill. If a month ago analysts had predicted earnings of 44 cents a share, today the average estimate runs at 16 cents a share.

So-called chatter can have its own agenda among traders so I’m wary of such unsubstantiated rumors. Yet, in this case, its more than likely such a warning would be out sooner or later. Just look at what Citigroup (NYSE: C) — down 3.6% — stated Thursday.

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Filed under: Industry, Economic data

“Normally, you hear that in the event of a recession, defensive sectors such as healthcare and consumer staples are the best place to be,” note technical experts Dr. Marvin Appel and Gerald Appel in their Systems & Forecasts. But are they?

“The reason these are called ‘defensive’ is that consumer demand for these goods does not shrink by very much during recessions. As such, corporate profits should hold up better than average. Consumer staples has the added advantage of being a sector with below-average volatility generally.

“Data from Ned Davis Research confirms this bit of investing folklore. Briefly, the two best-performing sectors in the six and 12 month periods following the onset of the five recessions from 1973 through 2001 were healthcare and consumer staples. So far, so good.

“The problem is that just because the performance of these sectors during recessions has been better than other areas of the S&P, that does not mean that their returns have been very good.

“Specifically, in the six months following the begin of a recession, the average gain in healthcare was 2.6% and in consumer staples, 1.4%. These returns are not enough better than those available from a money market to warrant taking the market risk.

“If you were to wait a full year from the start of a recession, the average gains from healthcare were 5.6% and from consumer staples, 3.0%.

“I once asked a portfolio manager why he chose to move into defensive sector rather than just into cash when he forecast a recession. He answered that he’s paid to be invested, not to be in cash.

“Of course, if you’ve a specific bullish outlook on these sectors, you should feel free to invest in them. Otherwise, the take home message is: if you are thinking of moving assets into healthcare or consumer staples as a generic defensive measure, move to cash instead.”

Everyday, Steven Halpern’s TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation’s leading financial newsletter advisors.

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Filed under: Good news, Industry, Japan, Options, Technical Analysis, Suntech Power Hldgs ADS (STP)

Suntech Power Holdings (NYSE: STP) shares are trading higher today on reports that the Japanese Ministry of Economy, Trade and Industry (METI) is considering a resumption of subsidies for solar panel makers beginning next year to maintain its lead in the industry. METI will be discussing subsidies at its meeting this week. This could be a good sign for the solar industry and STP. If you think that the stock won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on GIS.

After hitting a one-year high of $90.00 in January, the stock hit a one-year low of $28.19 in March. STP opened this morning at $42.01. So far this day the stock has hit a low of $41.12 and a high of $42.69. As of 12:35, STP is trading at $41.85, up 0.54 (1.3%). The chart for GIS looks bearish but improving slightly, while S&P gives the stock a positive 4 STARS (out of 5) purchase rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the buy and sale of put 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 7.5% return in just two months as long as STP is above $30 at August expiration. STP would have to fall by more than 28% before we would start to lose money. Learn more about this type of trade here.

STP hasn’t been below $30 since March and has shown support around $38 recently. This trade could be risky if the company’s earnings (due out in early August) disappoint, but even if that happens, this position could be protected by the support the stock might find between $35 and $40, where it bounced over the past month.

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 STP.

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Filed under: Industry, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Oil

With the U.S. economy in slow-growth / no-growth mode, domestic demand for autos has been low, as predicted. However, nearly on cue, demand for smaller vehicles has been robust.

That cue is $4 gasoline, The New York Times reported Friday. Or, as one Harrison, N.Y. resident called her monthly gasoline bill, “My vehicle payment in addition to my vehicle payment.”

A 60-70% increase in gasoline prices in the last two years has led to a huge increase in demand for small vehicles and hybrids, The Times reported, with limited supply of some of the most-preferred models creating further frustration for automakers and purchasers alike.

The more things change…

Economist Glen Langan said a great deal has changed during the time between the last oil shock in 1979-80 and today’s oil shock: long hair for men is out, as are bell-bottom pants, and album-oriented rock (mainly because there are no more record albums). One thing hasn’t changed: U.S. automakers, once again, “were dramatically under-prepared for the high gas price era.”

An example: Ford (NYSE: F) is running its Focus assembly plant in Wayne, Mich. on overtime and on Saturdays but still can’t meet demand for the higher-mileage Focus, The Times reported.

“U.S. automakers are using phrases like ’seismic shift’ in the market place and ‘events out of nowhere to disrupt our production plans,’ but the reality is oil and gasoline prices have been trending higher for more than eight years. I mean eight years,” Langan stated. “What were they thinking when gas prices were rising with rising gasoline demand, and China and India entering global commerce? That gasoline would drop to 25 cents a gallon?”

Langan stated the consequences stemming from Ford’s and General Motors‘ (NYSE: GM) latest production failure will be fewer jobs in the U.S. and less spin-off economic activity from that job reduction, in addition to not almost enough high-mpg automobiles to meet U.S. demand.

Auto Sector Analysis: In fairness to Ford, General Motors and Chrysler, foreign automakers are also straining to meet demand for fuel-efficient cars, on all continents. Still, that does not blot-out the fact that there are objective events that demonstrate why the right side of GM’s and Ford’s stock charts are lower than the left.

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Filed under: Earnings reports, Analyst upgrades and downgrades, Industry, Competitive strategy, Apple Inc (AAPL), Motorola (MOT), Nokia Corp. (NOK), Sprint Nextel Corp (S), Research in Motion (RIMM)

The week was full of news about handsets. Sprint (NYSE: S) stated it would launch an “iPhone killer,” a $129 phone from Samsung. Many brokerage firms upped estimates for Apple (NYSE: AAPL) iPhone sales as it appears that the demand for the new 3G version will be tremendous. Nokia (NYSE: NOK) launched its E71 and E66 high-end handsets. Lehman upped its targets for earnings estimates at RIM (NASDAQ: RIMM), the maker of the BlackBerry.

And Motorola (NYSE: MOT) shares hit a five-year low at $7.61. The company did not launch any new products. No one on Wall Street upped forecasts on the company. All that was clear is that the firm is taking a worse beating as each month passes.

Motorola plans to spin-off its handset business and keep its home networking and enterprise operations. The entire company has a market cap of under $18 billion now.

Based on Motorola’s last 10-Q, the two units the company is keeping have an annual revenue run-rate of over $16 billion. They should make about $1.7 billion in operating profit in 2008. By many measures, together they would be worth $18 billion on their own.

It is a spectacular sign of how bad things are at Motorola’s handset business, that, as an enterprise, it might have no financial value at all. Its market share is dropping too fast and its is losing too much money.

MOT may not even be able to give the operation away for nothing.

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

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Filed under: Major movement, Forecasts, Bad news, Industry, CIGNA Corp (CI), Coventry Health Care (CVH), Options, Technical Analysis

Cigna (NYSE: CI) shares are falling today after competitor Coventry Health Care (NYSE: CVH) lowered its fiscal 2008 earnings forecast to a range between $3.65 and $3.75 for the year, well below the $4.43 per share expected by analysts. Investors are really punishing CVH today and the stock is down 22% currently. Cigna is getting caught in the crossfire as investors worry that similar stocks might also disappoint come earnings time. 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 CI.

After hitting a one-year high of $56.98 in January, the stock hit a one-year low of $36.75 in March. This morning, CI opened at $38.24. So far today the stock has hit a low of $36.28 and a high of $38.34. As of 12:15, CI is trading at $36.86, down 2.84 (-7.1%). The chart for CI looked neutral and improving until today’s drop, 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 consider an October bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the buy 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 will make a 9.9% return in four months as long as CI is below $45 at October expiration. Cigna would have to rise by more than 19% before we would start to lose money.

CI hasn’t been above $45 since February and has shown resistance around $42 recently. This trade could be risky if legislation that hurts health insurance companies fails to make it through the government, but even if that happens, this position could be protected by resistance CI might find at its 50-day moving average, which is currently around $42 and falling.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CI, CVH, or AET.

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