Nov
26

Take Two (TTWO) Buys Back 12 Million Shares of Their Stock From Carl Icahn

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Carl Icahn Sells His Entire Take Two (TTWO) Stake Back to the Company

Take Two Interactive (TTWO) announced this morning that they would be repurchasing 12 million shares of their stock from the Icahn Group for $203.5 million. The move ends Icahn’s relationship with the company after an 81% return on his investment in TTWO. Three directors whom were placed on the board by the Icahn Group announced that they would be stepping down as per the buyback agreement. The 12 million shares bought back represent nearly 14% of the outstanding shares of Take Two stock as of yesterday’s close. Shares are down 4% currently today, however I view this news as being quite bullish and believe it shows that management also feels TTWO shares are being significantly undervalued at present levels. The repurchase was done outside of their existing buyback plan announced in February of this year that authorizes the company to repurchase an additional 7.5 million shares of stock. I currently view TTWO as a strong buy.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
25

Has Take Two’s (TTWO) Stock Found a Bottom?

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Take Two (TTWO) Looks to End Downtrend After Developing A Double Bottom

Despite blowing away analyst estimates during their most recent quarter, Take Two Interactive (TTWO) stock is down 5% since reporting, flat from where I recommended purchasing shares in anticipation of stronger than expected Grand Theft Auto V sales. I still view TTWO as a strong long-term buy, and believe their downside is very limited from their current levels given their massive cash position and extremely valuable intellectual property portfolio. Both Microsoft’s (MSFT) Xbox One and Sony’s (SNE) PlayStation 4 sold over 1 million units on their release day, positive signs for the industry as a whole heading into the holiday season.

Looking at their chart we can see that Take Two has traded down sharply on the open the past two sessions, but bounced strongly off of the $16.35 level and recouped their initial losses each day, forming a very defined double bottom pattern. Shares could run into some resistance at $17, but a move above that level would confirm their short-term reversal and set the stage for a move higher. Take Two shares are currently at a very attractive entry point and I believe $16.35 will prove to be the floor for TTWO’s stock price moving forward.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
25

iRobot (IRBT) Stock in Descending Triangle Pattern

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iRobot (IRBT) Stock Nears Test of Important Support Level, Chart Pattern is Bearish

Despite a strong run for equities the past few months, shares of iRobot (IRBT) are down more than 20% from their 52 week high of $41 set in July. Best known for their robotic cleaning devices such as the floor-vacuuming Roomba, iRobot disappointed investors with their 3rd Quarter results, reporting revenue and guidance that came in below analyst expectations. IRBT shares are currently in a bearish descending triangle pattern which began in July, and are near a key support level around $32.40. The pattern indicates that demand for their shares has been declining, with a series of lower highs made each time IRBT has bounced off support the past 5 months. Traders should pay close attention to the price action of IRBT stock this week as it tests $32.40. A break to the downside would trigger a sell signal with their chart showing no levels of support to the downside until the $25- 26 range.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
22

Foot Locker (FL) Stock Jumps After Beating Estimates

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Foot Locker (FL) shares rise after reporting strong revenue and earnings growth

Fueled by stronger than expected same-store sales growth, Foot Locker (FL) reported 3rd Quarter revenues and earnings that easily exceeded analyst expectations, sending shares to a new 52 week high this morning. Foot Locker recorded non-gaap earnings per share of $0.68 on $1.62 billion in sales as same-store sales increased by 4.1% year-over-year, bringing their eps to $2.04 on $4.71 billion in revenue for the first 9 months of 2013. Foot Locker continued their trend of closing unprofitable domestic stores, consolidating in the US while expanding their store base overseas. The company closed 16 stores in the US market while their international store count grew by 208 year-over-year.

During the conference call, management was quite upbeat about the prospects for the current quarter. They are expecting same-store sales growth in the low to mid single digits, currently running in the mid-single digit range for Q4 thus far. CEO Ken Hicks stated that new athletic apparel product launches have been well received so far this quarter, led by Nike (NKE) and their Jordan brand, and expects launches to remain strong throughout the holiday season. Foot Locker also said the implementation of Runners Point Group, acquired earlier this year, has been progressing well. Runners Point Group was profitable for the quarter and management believes they have yet to begin to drive the margin improvements that they see themselves generating there. FL sees margin improvements in current Foot Locker and Footaction stores coming from future price mark-ups, an improved product blend, and better performance from their private branded apparel products.

Foot Locker (FL) stock is a buy at current levels, Management Agrees

Foot Locker remained aggressive with their share buyback in the 3rd Quarter, repurchasing nearly 2 million shares of stock at a cost of $67 million during Q3. FL has bought back almost 5 million shares total in 2013 at a cost of $167 million while simultaneously paying an $0.80 annual dividend. They have $423 million remaining on their current buyback plan and are well ahead of pace to complete it within the allotted 3 years. Their balance sheet remains extremely strong with cash and short-term investments totaling $796 million versus only $140 million in debt.

As of publication, FL stock is up 4% on the day, setting a new 52 week high. I have had a strong buy recommendation on Foot Locker since I published my analysis of them last month with a long-term price target of $58. My thesis is based on the continued strength of long-term trends in the athletic apparel sector, Foot Locker’s leading position in the US athletic shoe retail market, and an assumed gradual appreciation towards fair value (FL currently trades for significantly less than their peers in the athletic apparel industry using just about any valuation metric). I continue to view Foot Locker as a strong buy and one of my top picks in today’s markets.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
21

Even John Paulson is Turning on Gold (GLD)

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The World’s Biggest Gold Bull Isn’t So Bullish Anymore

John Paulson,the storied hedge fund manager who netted$20 billion successfully navigating the housing crash and ensuing financial crisis, has been one of the most notable and outspoken gold bulls in recent years. After seeing his PFR Gold Fund drop 63% thus far for the year, he has seemingly lost faith in the precious metal. Despite being the world’s largest investor in SPDR Gold Shares (GLD), owning more than 10.2 million shares as of September 30th, Paulson reportedly has told clients he would not invest any more money in his Gold fund as he is now uncertain as to when inflation will begin to accelerate. At yesterday’s annual meeting Paulson said the fund will maintain their current positions in gold stocks while letting any options related to the metal expire. Already down 26% year-t0-date, GLD certainly looks as if it has yet to bottom out, with a very defined head and shoulders pattern on their chart confirmed by this weeks price action. Perhaps Paulson sees the same developments taking place.

Or perhaps he’s just rotating from bullion to Bitcoin…

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
20

Sirius XM Radio (SIRI) Nearing Support, Remains In Long-Term Uptrend

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Sirius XM Radio (SIRI) Stock Nears Lower Bollinger Band, Trend Still Bullish

Since late 2008, Sirius XM Radio (SIRI) stock has been one of the market’s best and most consistent performers, with shares up more than 2,500% in the past 5 years. Near at a post-merger high heading into their latest earnings release, expectations were sky-high. Despite reporting very good numbers, showing strong year over year growth and re-affirming their outlook, their stock was sent lower as many investors were disappointed that SIRI didn’t raise guidance. In the subsequent weeks shares have continued to track down, closing today at $3.64. While some may assume their uptrend must be broken considering their recent price action, if you look at their long-term chart it is easy to see that the trend remains very strong still. SIRI was approaching overbought levels prior to earnings, now shares could be considered close to oversold as they near their lower Bollinger Band. Sirius XM has made enormous strides in terms of revenue growth and profitability in the past few years and will generate $915 million in free cash flow this year, money which will be used to fund a $2 billion buyback announced by SIRI last month. With solid fundamentals and future growth prospects, a shareholder friendly management team actively returning capital to investors, and short-term technical support provided by their Bollinger Bands, SIRI is currently at an attractive level for those looking to enter a long-term position. Their uptrend remains very much intact.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
20

SPDR Gold Shares (GLD) Selling Off, Heading Lower

GLD Head and Shoulders

Head and Shoulders pattern suggests SPDR Gold Shares (GLD) is a sell

A very bearish head and shoulders pattern has formed in SPDR Gold Shares (GLD) chart the past 5 months. Support at $122 has been broken and GLD shares currently sit at $120. Looking at their chart, their next level of support appears to be at $115 in the short-term. We heard from the Fed Minutes today that tapering could be on table within the next few meetings. A strong jobs report for November would increase the likelihood that the central bank will start scaling back their stimulus program as other economic data has been looking better as of late. These measures are inevitable despite Bernanke and Yellen’s comments suggesting their willingness to keep the current program in place and have the potential to send GLD significantly lower.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
19

Yahoo (YHOO) Announces $5 Billion Stock Buyback

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Yahoo (YHOO) Increases Stock Buyback Plan, To Offer $1 billion of Convertible Notes

Yahoo (YHOO) announced today that they would be offering $1 billion of convertible notes due 2018 and are also increasing their buyback plan. YHOO has been aggressive in buying back shares recently, and has only $300 million left on their current plan. Management showed that they clearly feel Yahoo is still undervalued at current levels and would continue buying, announcing a $5 billion repurchase plan today, an amount that would account for nearly 1/7th of their outstanding shares at yesterday’s closing price. Yahoo currently has $3.2 billion in cash on their balance sheet and extremely valuable stakes in Alibaba and Yahoo Japan. They will be required to sell a significant percentage of their Alibaba stake in the event of an Alibaba IPO. Last week I highlighted numerous charts of YHOO, they have been a strong performer as of late and we expect shares to respond favorably to this news. I believe YHOO stock is a buy and will reach $40 within the next couple of months.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
18

Facebook (FB) stock plummets, downtrend remains intact

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Facebook (FB) fails to confirm break out, shares down sharply

After signaling a possible break out from their descending channel on Friday, shares of Facebook (FB) fell 6.5% today, indicating that their downtrend remains intact. The key level for FB to hold today was $49, shares gapped down from Friday’s close and trended down the remainder of the day, closing at their lowest price in more than a month. In what was a very bearish day for Facebook stock and the entire social media sector as a whole, shares failed to find support at $48 and could be headed lower in the short term unless a base can be formed at $46 during the next few trading sessions. We will be monitoring FB’s action closely this week.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Nov
18

Bank of America (BAC) Nears Key Technical Level

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Bank of America (BAC) Stock Has Momentum, Closing in on 52 Week High

After trending down for the past 2 1/2 months shares of Bank of America (BAC) have picked up some momentum, broke their downtrend, and are within 1% of their 52 week high. BAC could make a run at $15 today, and should  meet some resistance at that price. Given the recent strength of BAC, a move north of this level seems likely from a technical perspective. To get an idea of where shares could be headed from there we can check out a long term chart of Bank of America and see that there is not significant resistance until shares reach $18, which would represent a 20% upside from current levels. Should Bank of America fail to cross $15 and remain above that price in the short term, look for them to trend back down towards $13.75 before finding support. Their price action this week should be monitored very closely if you have a position in BAC or are currently considering entering one as it nears this key technical level.
BAC Long Term
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

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