MOST NOTEWORTHY: Solarfun Power, BioMarin Pharmaceutical and Genentech were today's noteworthy initiations:
Jefferies initiated Solarfun Power (NASDAQ:SOLF) with a Buy rating and $18 target. The firm believes the one-third stake purchased by Good Energies and new management hires could generate operational momentum and that declining silicon costs may help margins.
BioMarin Pharmaceutical (NASDAQ:BMRN) was started at Oppenheimer with a Perform rating. The firm recommends waiting for Street estimates on Kuvan sales to moderate and for positive pipeline signals before adding to positions.
Genentech (NYSE:DNA) was initiated at Citigroup with a Buy rating and $91 target. The firm believes several studies could lead to robust growth and points out the company's Q2 results showed Avastin reaccelerating due to growth in breast cancer.
OTHER INITIATIONS:
Goldman reinstated Staples (NASDAQ:SPLS) with a Neutral rating.
Zebra Tech (NASDAQ:ZBRA) was initiated with a Hold rating at KeyBanc.
Rodman & Renshaw assumed coverage of Corcept Therapeutics (NASDAQ:CORT) with an Outperform rating and $8 target.
AuthenTec (NASDAQ:AUTH) was initiated at JP Morgan with an Overweight rating and at Canaccord Adams with a Hold rating and $10 target.
They say it's never too early to start getting ready for the upcoming school year, and Tuesday, Staples Inc. (NASDAQ: SPLS) announced it was officially kicking off the back-to-school shopping season. This came as a reaction to a survey showing that parents would indeed like to know when they could start finding school supplies on store shelves.
And what can be easier than establishing an official start to the back-to-school shopping season? Based on the example of Black Friday, which announces the start of the winter holiday shopping season, Staples followed the same logic and decided to declare July 8 as the official opening day of the 2008 back-to-school shopping season. Staples is serious about setting an official precedent, and celebrated it by ringing the bell to open the NASDAQ Tuesday.
"Staples is giving parents a clear road map of where and when to the find the best products and deals this season," the company stated. But the more apparent reality is that the current economic environment has consumers more closely watching their spending, while at the same time stores are trying to do anything they can to get shoppers through the doors.
Amazon.com (NASDAQ: AMZN) shares are falling today after the company announced this morning that it has opened an office supplies division designed to compete with Staples Inc. (NASDAQ: SPLS) and the like. Evidently, investors aren't too excited by the Amazon's entry into this already struggling portion of the retail sector. 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 AMZN.
After hitting a one-year high of $101.09 in October, the stock hit a one-year low of $61.20 in March. This morning, AMZN opened at $79.55. So far today the stock has hit a low of $77.63 and a high of $80.08. As of 12:30, AMZN is trading at $80.04, down $0.64 (-0.7%). The chart for AMZN looks bullish and steady, 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 August bear-call credit spread above the $105 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 a 5.3% return in two months as long as AMZN is below $105 at August expiration. AMZN would have to rise by more than 30% before we would start to lose money. Learn more about this type of trade here.
After hitting a one-year low of $19.69 in November, the stock hit a one-year high of $25.85 on Monday. This morning, SPLS opened at $24.76. So far today the stock has hit a low of $24.44 and a high of $24.98. As of 11:00, SPLS is trading at $24.54, down $0.57 (-2.3%). The chart for SPLS looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $27.50 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 a 16.3% return in three months as long as SPLS is below $27.50 at September expiration. Staples would have to rise by more than 11% before we would start to lose money. Learn more about this type of trade here.
MOST NOTEWORTHY: Allied Capital, ZIX Corp and Staples were today's noteworthy initiations:
Oppenheimer believes Allied Capital's (NYSE:ALD) dividend is sustainable and that the equity portion of its portfolio will drive outsized returns once market conditions return to normalcy. Shares were initiated with a Perform rating.
ThinkPanmure believes ZIX Corp (NASDAQ:ZIXI) has a large opportunity in e-prescribing encryption market, with a potential catalyst being the E-MEDS bill. The firm started shares with a Buy rating and $4.50 target.
Banc of America reinstated its Buy rating on Staples (NASDAQ:SPLS) following the Corporate Express (NYSE:CXP) deal, which it views as a positive catalyst for the stock. The firm has a $29 target on the stock.
OTHER INITIATIONS:
Newmont Mining (NYSE:NEM) was initiated at Thomas Weisel with an Overweight rating and $62 target.
Stephens assumed Wabash (NYSE:WNC) with an Equal Weight rating and $10 target.
After some tough fighting, Staples, Inc. (NASDAQ: SPLS) has won its bid for Corporate Express N.V., one of the world's largest suppliers of office products to businesses and institutions. The deal comes to about $2.6 billion in an all cash transaction. What's more, Corporate Express has agreed to abandon its purchase of rival Lyreco (which was really a defensive ploy anyway).
To get to this point, Staples had to increase its bid several times, from 7.25 euros to 9.25 euros. But, it was probably worth it. After all, the core retail business is lagging.
Basically, Corporate Express will provide a strong distribution platform in North America, Canada and Europe. Moreover, the business is growing and there should be some cost savings because of overlap and economies of scale, although these haven't been estimated yet.
U.S. stock futures were higher early Wednesday ahead of the release of the Beige Book on economic conditions and the release of weekly oil inventory supplies that could move oil prices again.
U.S. stocks ended mixed but unchanged much Tuesday following the release of April trade deficit, which widened further and despite crude-oil prices edged lower. Comments from Bernanke on inflation concerned investors. The Dow industrials rose 9 points, or 0.08%, while the S&P 500 fell 3.3 points, or 0.24%, and the Nasdaq Composite declined 10 points, or 0.43%.
Today, the Federal Reserve is scheduled to issue its Beige Book - a survey of regional economic performance - at 2 p.m EDT. At 10:30 a.m., weekly crude inventories are due out. Oil prices rebounded in electronic trading Wednesday back above $133 a barrel ahead of the report as traders speculate inventories declined and as the dollar weakened.
U.S. stock futures were mixed early Tuesday morning, trading in a narrow range as investors awaited Fed Chairman Bernenake's speech, examined oil prices and reacted to news Lehman Brothers might $4 billion in capital.
After a four-day winning streak, U.S. stocks declined on Monday following renewed concerns about the financial markets following management changes at Wachovia and Washington Mutual, downgrades of several financials and Britain's Bradford & Bingley warning about profits. The Dow industrials dropped 134 points, or 1.06%, the Nasdaq Composite lost 31 points, or 1.23%, and the S&P 500 dropped 14 points, or 1.05%.
While not much is on the economic docket for today other than April factory orders due at 10:00 a.m. EDT, investor will likely be interested in the International Monetary Conference in Barcelona where Federal Reserve Chairman Ben Bernanke as well as European Central Bank President Jean-Claude Trichet and Bank of Japan Governor Masaaki Shirakawa are going to speak starting 9:00 a.m. EDT.
MOST NOTEWORTHY: Apple, Panera Bread and Amazon.com were today's noteworthy initiations:
Oppenheimer assumed coverage of Apple (NASDAQ:AAPL) with an Outperform rating and $235 target. The firm expects 3G iPhone demand to be better than the Street currently expects.
Jefferies believes Panera Bread (NASDAQ:PNRA) can outperform Street expectations in 2009 and beyond given its operational initiatives and refined new unit development strategy. Shares were started with a Buy rating and $56 target.
Amazon.com (NASDAQ:AMZN) was initiated with a Market Perform rating and William Blair. The firm believes the current investor optimism leaves little room for share upside in the near-term.
OTHER INITIATIONS:
Citigroup initiated Staples (NASDAQ:SPLS) with a Buy rating and $28 target.
Deutsche Bank initiated Starent Networks (NASADAQ:STAR) with a Buy rating and $21 target.
Bidz.com (NASDAQ:BIDZ) was initiated at Merriman with a Buy rating.
Stock futures were somewhat lower early Wednesday morning as as oil prices managed to set yet another record high, going through yet another milestone and move above $130 a barrel.
U.S. stocks plunged Tuesday, after a Labor Department report showed wholesale inflation in April rose more than forecast and as the price of oil continued to rise following a prediction from T. Boone Pickens of $150 oil. The Dow industrials fell 199 points, the S&P 500 dropped 13 points and the Nasdaq Composite dropped 23 points.
At 10:30 a.m. today, weekly crude inventories data will be released. In the meanwhile, Light, sweet crude for July delivery reached a trading record of $130.47 a barrel. It has been supply concern, rather than a lower dollar, that has been moving oil lately.
Also today, the minutes of the latest Federal Reserve meeting will be released at 2:00 pm EDT. No doubt investors will scrutinize the minutes, searching for more clues on the Fed's next step, which would hope help strengthen the dollar somewhat.
Saks Inc. (NYSE: SKS) reported Tuesday a 66% increase in first-quarter earnings, compared with weak year-ago results. Staples Inc. (NASDAQ: SPLS), on the other hand, posted only a 1.5% increase in its first-quarter profit, compared to small profit declines the previous two quarters.
New York-based Saks, the operator of luxury chain Saks Fifth Avenue, said it earned $18.27 million, or 13 cents per share, for the three months ended May 3, up from $11.04 million, or 7 cents per share, in the year-ago period. Revenues rose to $862.35 million, compared with $792.75 million in the year-ago period. Analysts surveyed by Thomson Financial expected higher profits of 17 cents per share on lower revenue of $840 million.
The company said same-store sales rose 8.4% percent in the quarter. Like many retailers, Saks warned that the challenging economic environment will continue for the rest of the year.
Shares dropped 93 cents, or 6.6%, to $13.20 Tuesday, but rebounded 12 cents in after-hours trading.
America's Most Expensive Homes A little over two years ago, when Donald Trump listed Maison de L'Amitié in Palm Beach, Fla., for $125 million, it was a sign of the times. Real estate prices were on the rise, and even though it was $50 million more than the next-highest listing, there was a sense that Trump would get his price. After all, everyone else in America was getting his. Once again, Maison de L'Amitié points to the state of the housing market. In March, Trump knocked $25 million off the price, the biggest discount ever for a single residence. Topping the list as most expensive home this year is William Randolph Hearst's estate in Beverly Hills at $165 million. America's Most Expensive Homes - Forbes.com In Pictures: Most Expensive Homes
Stock futures fell early Tuesday morning, ahead of an inflation reading at the wholesale level. It is rising prices, as well as the worse housing slump in over a century that caused Home Depot's profit to decline 66% when it reported this morning. Other retailers are scheduled to report earnings today, and the concern is many will show they face similar problems.
U.S. stocks ended mixed on Monday despite rising quite steadily until 1:30 p.m. EDT. While leading economic indicators alleviated some concerns over the economy, record crude oil prices, once again, dampened the mood on the Street and the Dow industrials rose 41 points, or 0.32%, the S&P 500 added a point, or 0.09%, but the Nasdaq Composite dropped 12 points, or 0.50%.
Producer price index, a gauge of inflation at the wholesale level, is due out in about an hour, at 8:30 a.m. EDT. The data is expected to show a 0.4% rise in April. Excluding food and energy, core-PPI is expected to show a rise of 0.2% in April.
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MOST NOTEWORTHY: Solarfun Power, BioMarin Pharmaceutical and Genentech were today's noteworthy initiations:
They say it's never too early to start getting ready for the upcoming school year, and Tuesday, 
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After some tough fighting, 
U.S. stock futures were higher early Wednesday ahead of the release of the Beige Book on economic conditions and the release of weekly oil inventory supplies that could move oil prices again.
U.S. stock futures were mixed early Tuesday morning, trading in a narrow range as investors awaited Fed Chairman Bernenake's speech, examined oil prices and reacted to news Lehman Brothers might $4 billion in capital..gif){kind=logo}
Stock futures were somewhat lower early Wednesday morning as as oil prices managed to set yet another record high, going through yet another milestone and move above $130 a barrel.
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