The Prepared Mind 7.29.2013

 

It was a quiet week very quiet week – the second quiet week in a row.  Some have described the markets’ behavior as the annual visit of the summer doldrums.  Others are describing it as the lull before the storm.  There remains one immutable fact – the bull market continues unabated.  The current focus has been on earnings.   A bit than half of the S&P 500 companies have reported their earning this cycle.  Nearly two-thirds have exceeded earnings expectations.  Revenue has met analyst expectations 46% of the time.  This disconnect between revenue and earnings have some pundits concerned.  Adding to the concern is growth in earnings per share (EPS.)  Overall EPS growth in reporting companies is cruising at a bullish rate of 4.1%.  However if performance in the financial sector is excluded from the results growth in earnings growth per share disappears.  The growth in EPS has been – 2.8%.  Is this negative growth in EPS an indicator of the end of the bull market?

Quite frankly, I do not know.  Different approaches to the raw statistics will bring different results.  If the numbers from the technology sector are excluded from the calculation the EPS number is back near 4%.  This entire exercise reminds of the classic book “How to Lie with Statistics” by Darrell Huff.   Huff reminds the reader to approach all “statistics” with an element of caution.  The exercise with this quarter’s EPS shows us how statistics might be manipulated to reinforce a predetermined opinion.  If have seen these same “statistics” bandied about as proof positive of radically different impending market behaviors.  Approach these statistical “proofs” with well developed sense of skepticism

The NASDAQ 100 (NDX) was the strongest index last week.  The NASDAQ 100 (NDX) closed at 3,076.23 gaining 1.03% or 31.30 points The Russell 2000 (RUT) lost 0.28%, down 2.96 points to close at 1,047.99.  The Dow Jones Industrial Average (DJIA) closed at 15,558.83 –   up 15.09 points or a gain of 0.10%.  The S&P 500 (SPX) is trading at 1,391.65 – down 11.90 points or a gain of 0.03%.  The S&P 100 (OEX) closed at 759.16  – gaining 1.65 points or 0.22%.    The VIX closed last week at 12.72% – a gain of 0.18 or 1.44%.  The other volatility indexes show losses for the week and are trading near 3 month lows.  Current volatility levels should hold constant or gain in anticipation of this coming week’s spate of employment, economic and earnings reports.

Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

15,558.83

15.09

0.10%

18.73%

11.79% (VXD)

S&P 500 (SPX)

1,691.65

-0.44

-0.03%

18.61%

12.72% (VIX)

NASDAQ 100 (NDX)

3,076.23

31.30

1.03%

15.61%

12.93% (VXN)

Russell 2000 (RUT)

1,047.99

-2.96

-0.28%

23.09%

16.75% (RVX)

S&P 100 (OEX)

759.16

1.65

0.22%

17.41%

12.08% (VXO)

CBOE Volatility Index (VIX)

12.72

0.18

1.44%

NA

This week the focus will be on microeconomic and macroeconomic events.  The earning cycle continues this week.   These earnings will play second fiddle to the July employment reports and the FOMC meeting and announcement.   The jobs numbers are very important,  The Fed has repeatedly emphasized that their policy decisions are based on unemployment number.  On Wednesday,  the Bank of England and the European Central Bank will announce current interest rate policy.  Forward guidance by the FOMC, BOE and ECB will have a potential to move the markets.

I have scanned stocks with upcoming earnings using the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  These stocks are highlighted under the heading “Optionable Earnings” in the daily calendar which follows.  Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  You should be aware of daily volume and open interest in any products you trade.   I am including a consensus earnings estimate for each stock.  Stick with your plan.    Remain disciplined.

Remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“You can observe a lot just by watching” – Yogi Berra

This week’s economic news (All times are Eastern Daylight Time.) Events, dates and times are subject to change:

Monday July 20:

Economic:  Pending Home Sales Index – 10:00, Dallas Fed Manufacturing Survey – 10:30.

International Economic:  Japan Industrial Production – 7:50 PM.

Optionable Earnings:

Symbol

Company Name

July 26 close

IV30

B/A

XEPS
BEN Franklin Resources, Inc.

$47.98

29.7

B

$2.56

CYOU Changyou.Com Ltd (ADR)

$39.36

73.9

B

$1.36

HTZ Hertz Global Holdings, Inc.

$26.86

39.0

B

$0.46

LECO Lincoln Electric Holdings, Inc.

$60.62

26.7

B

$0.90

NCLH Norwegian Cruise Line Holdings Ltd

$30.27

40.6

B

$0.27

ROP Roper Industries, Inc.

$131.56

21.5

B

$1.30

SOHU Sohu.com Inc

$68.31

57.3

B

$0.49

TEN Tenneco Inc

$49.04

36.2

B

$1.09

WYNN Wynn Resorts, Limited

$130.16

29.0

B

$1.55

APC Anadarko Petroleum Corporation

$89.49

37.8

A

$0.89

BRFS BRF SA (ADR)

$21.78

27.6

A

$0.22

CYH Community Health Systems

$43.21

40.1

A

$0.57

EMN Eastman Chemical Company

$75.47

29.8

A

$1.64

ESRX Express Scripts Holding Co

$66.73

24.1

A

$1.10

GGP General Growth Properties Inc

$21.45

21.9

A

$0.25

GIMO Gigamon Inc

$28.07

67.4

A

$0.04

HIG Hartford Financial Services Group Inc

$31.41

28.1

A

$0.71

HLF Herbalife Ltd.

$57.46

75.5

A

$1.19

JEC Jacobs Engineering Group Inc

$60.08

27.8

A

$0.84

MAS Masco Corporation

$20.01

51.7

A

$0.19

SPN Superior Energy Services, Inc.

$26.86

31.1

A

$0.43

VRTX Vertex Pharmaceuticals Incorporated

$87.62

49.3

A

($0.20)

XL XL Group plc

$32.12

25.6

A

$0.66

AGNC American Capital Agency Corp.

$21.51

41.1

 A

$0.90

 

Tuesday July 30:

Economic:  ICSC – Goldman Sachs Store Sales – 7:45, Redbook – 8:55,  S&P Case-Shiller Home Price Index – 9:00,  July Conference Board Investor Confidence – 10:00, State Street Investor Confidence – 10:00.

International Economic:  No major announcements.

Other:  FOMC meeting begins.

Optionable Earnings:

Symbol

Company Name

July 26 close

IV30

B/A

XEPS
ADS Alliance Data Systems Corporation

$191.29

24.6

B

$2.18

AEGR Aegerion Pharmaceuticals, Inc.

$77.96

73.9

B

($0.62)

AET Aetna Inc

$65.58

30.8

B

$1.39

CIE Cobalt International Energy, Inc.

$28.53

59.3

B

($0.14)

CMI Cummins Inc.

$116.58

27.2

B

$1.97

COH Coach, Inc.

$59.55

38.7

B

$0.89

CVLT CommVault Systems, Inc.

$80.89

48.4

B

$0.24

DDD 3D Systems Corporation

$47.07

59.3

B

$0.22

DISCA Discovery Communications Inc.

$85.08

24.3

B

$0.91

ESV ENSCO PLC

$59.96

24.8

B

$1.50

ETR Entergy Corporation

$70.09

22.2

B

$1.02

FIS Fidelity National Information Services

$44.55

20.9

B

$0.65

GNRC Generac Holdings Inc.

$41.64

42.2

B

$0.76

GTLS Chart Industries, Inc.

$102.72

35.7

B

$0.77

HCP HCP, Inc.

$45.17

23.1

B

$0.74

MDC M.D.C. Holdings, Inc.

$31.23

41.4

B

$0.55

NOV National-Oilwell Varco, Inc.

$71.91

26.8

B

$1.34

OXY Occidental Petroleum Corporation

$91.05

24.2

B

$1.61

ROK Rockwell Automation

$91.39

30.1

B

$1.40

TRW TRW Automotive Holdings Corp.

$69.71

31.8

B

$1.70

AFL AFLAC Incorporated

$60.46

21.0

A

$1.52

AMGN Amgen, Inc.

$109.51

25.8

A

$1.71

BWLD Buffalo Wild Wings

$95.92

40.1

A

$0.79

CBI Chicago Bridge & Iron Company N.V.

$60.82

26.9

A

$1.04

FISV Fiserv, Inc.

$92.71

20.0

A

$1.44

FTNT Fortinet Inc

$20.98

65.1

A

$0.06

GDOT Green Dot Corporation

$20.80

47.8

A

$0.24

HBI Hanesbrands Inc.

$58.71

33.1

A

$0.96

IACI IAC/InterActiveCorp

$51.42

38.4

A

$0.83

NCR NCR Corporation

$35.34

30.0

A

$0.65

OIS Oil States International, Inc.

$96.30

49.5

A

$1.52

OKE ONEOK, Inc.

$53.77

34.2

A

$0.27

OKS Oneok Partners LP

$51.21

20.7

A

$0.54

QCOR Questcor Pharmaceuticals Inc

$48.14

60.5

A

$1.13

SM SM Energy Co.

$66.31

36.8

A

$0.74

SYMC Symantec Corporation

$24.25

35.4

A

$0.31

 

Wednesday July 31:

Economic:  MBA Purchase Applications – 7:00, ADP Employment Report – 8:15, Q2 GDP – 8:30, Employment Cost Index – 8:30,  July Chicago PMI – 9:45,  EIA Petroleum Status Report – 10:30, Farm Prices – 3:00.

International Economic: German CPI – 6:00, Japan PMI Manufacturing – 7:15 PM.

Other:  FOMC Meeting Announcement – 2:00.

Optionable Earnings: 

Symbol

Company Name

July 26 close

IV30

B/A

XEPS
ADT ADT Corp

$41.60

37.3

B

$0.43

AGCO AGCO Corporation

$54.80

27.9

B

$1.81

AGN Allergan, Inc.

$91.57

34.4

B

$1.20

AMT American Tower Corp

$72.31

28.0

B

$0.53

BUD Anheuser Busch Inbev SA (ADR)

$88.92

22.4

B

$1.03

CMCSA Comcast Corporation

$44.17

22.2

B

$0.63

DLPH Delphi Automotive PLC

$55.53

27.3

B

$1.13

GRMN Garmin Ltd.

$37.21

29.9

B

$0.65

HES Hess Corp.

$73.54

25.8

B

$1.41

HUM Humana Inc

$90.36

31.1

B

$2.46

IVZ Invesco Ltd.

$32.80

25.7

B

$0.41

MA Mastercard Inc

$598.98

20.4

B

$6.32

PSX Phillips 66

$59.42

32.4

B

$1.89

SODA Sodastream International Ltd

$57.42

63.5

B

$0.57

SPW SPX Corporation

$75.35

30.8

B

$0.68

TSRA Tessera Technologies, Inc.

$20.81

37.3

B

($0.27)

ALL The Allstate Corporation

$51.22

25.7

A

$0.98

ANIK Anika Therapeutics, Inc.

$20.61

46.7

A

$0.29

AXLL Axiall Corp

$42.46

38.6

A

$1.16

BLMN Bloomin’ Brands Inc

$22.69

43.4

A

$0.23

CBL CBL & Associates Properties, Inc.

$23.46

25.4

A

$0.53

CBS CBS Corporation

$52.49

28.4

A

$0.72

CNQR Concur Technologies, Inc.

$86.89

41.7

A

$0.04

CTRP Ctrip.com International, Ltd. (ADR)

$36.18

56.7

A

$0.16

LNC Lincoln National Corporation

$41.36

28.1

A

$1.15

LRCX Lam Research Corporation

$49.16

31.2

A

$0.73

MAR Marriott International Inc

$40.86

22.8

A

$0.57

MCHP Microchip Technology Inc.

$39.68

24.8

A

$0.48

MET Metlife Inc

$48.87

25.7

A

$1.33

MUR Murphy Oil Corporation

$68.32

25.6

A

$1.55

NOW ServiceNow Inc

$45.38

52.2

A

($0.11)

OFIX Orthofix International NV

$28.37

66.2

A

$0.43

OHI Omega Healthcare Investors Inc

$33.25

27.3

A

$0.61

ONXX Onyx Pharmaceuticals, Inc.

$132.21

29.6

A

($0.63)

OTEX Open Text Corporation (USA)

$72.09

42.8

A

$1.42

PCYC Pharmacyclics, Inc.

$103.71

63.1

A

($0.04)

PXD Pioneer Natural Resources

$154.76

32.8

A

$1.12

RGR Sturm, Ruger & Company

$49.44

38.0

A

$1.18

SFLY Shutterfly, Inc.

$56.15

49.3

A

($0.54)

SGEN Seattle Genetics, Inc.

$39.73

50.1

A

($0.18)

SLCA U.S. Silica Holdings Inc

$23.44

58.4

A

$0.39

SPWR SunPower Corporation

$25.89

79.9

A

$0.08

STMP Stamps.com Inc.

$40.95

55.9

A

$0.38

STR Questar Corporation

$23.65

23.4

A

$0.22

SU Suncor Energy Inc. (USA)

$31.95

24.5

A

$0.67

THOR Thoratec Corporation

$32.25

54.7

A

$0.36

TRN Trinity Industries Inc

$37.20

39.0

A

$0.94

WBMD WebMD Health Corp.

$31.15

61.5

A

$0.06

WFM Whole Foods Market, Inc.

$55.12

34.9

A

$0.37

WMB Williams Companies, Inc.

$33.81

28.1

A

$0.15

WPZ Williams Partners L.P.

$52.06

24.5

A

$0.39

YELP Yelp Inc

$41.52

71.7

A

($0.03)

 

Thursday August 1:

Economic:   Motor Vehicle Sales, Challenger Job Cut Report – 7:30, Jobless Claims – 8:30, PMI Manufacturing Index – 8:59, Bloomberg Consumer Comfort Index – 9:45, July ISM Manufacturing Index – 10:00, June Construction Spending – 10:00 , EIA Natural Gas Report – 10:30.

International Economic: EU PMI Manufacturing – 4:00 AM, Bank of England Announcement – 7:00 AM, EU/ECB Announcement – 7:45.

 

Optionable Earnings: 

Symbol

Company Name

July 26 close

IV30

B/A

XEPS
ATK Alliant Techsystems Inc.

$92.04

27.3

B

$1.92

APA Apache Corporation

$82.77

24.2

B

$2.03

AVP Avon Products, Inc.

$23.04

37.7

B

$0.26

CCJ Cameco Corporation (USA)

$21.24

29.2

B

$0.15

CTRX Catamaran Corp (USA)

$52.23

40.9

B

$0.44

CNP CenterPoint Energy, Inc.

$24.71

23.1

B

$0.27

CHK Chesapeake Energy Corporation

$22.59

32.4

B

$0.39

CI CIGNA Corporation

$78.00

26.7

B

$1.59

CME CME Group Inc

$73.84

25.8

B

$0.90

COV Covidien plc

$61.02

22.2

B

$0.90

CVRR CVR Refining LP

$28.61

23.7

B

$1.67

DTV DIRECTV

$64.13

31.0

B

$1.30

EPL EPL Oil & Gas Inc

$32.28

42.7

B

$0.97

FLR Fluor Corporation (NEW)

$62.10

29.0

B

$1.01

HCA HCA Holdings Inc

$38.68

27.8

B

$0.88

INCY Incyte Corporation

$23.38

58.0

B

$0.10

IRM Iron Mountain Incorporated

$28.40

35.1

B

$0.31

MPC Marathon Petroleum Corp

$72.05

32.2

B

$1.91

MYL Mylan Inc.

$32.59

26.9

B

$0.67

NUS Nu Skin Enterprises, Inc.

$81.31

45.4

B

$1.20

OCN Ocwen Financial Corp

$46.07

39.7

B

$1.00

PRLB Proto Labs Inc

$64.34

59.4

B

$0.31

PWR Quanta Services Inc

$27.77

33.6

B

$0.34

SNY Sanofi SA (ADR)

$53.24

22.0

B

$0.90

SI Siemens AG (ADR)

$104.13

23.0

B

$1.74

SPR Spirit AeroSystems Holdings, Inc.

$25.45

55.9

B

$0.50

NGLS Targa Resources Partners LP

$50.08

27.1

B

$0.16

TDC Teradata Corporation

$59.59

41.4

B

$0.63

TEVA Teva Pharmaceutical Industries Ltd

$41.26

22.5

B

$1.18

TWC Time Warner Cable Inc

$117.22

33.8

B

$1.66

VMC Vulcan Materials Company

$48.08

33.1

B

$0.14

WNR Western Refining, Inc.

$29.56

43.4

B

$1.21

AIG American International Group Inc

$46.50

27.4

A

$0.85

BCOR Blucora Inc

$20.40

53.1

A

$0.24

FLT FleetCor Technologies, Inc.

$87.61

36.1

A

$0.88

KRFT Kraft Foods Group Inc

$56.86

21.6

A

$0.67

LBTYA Liberty Global PLC

$80.38

26.3

A

$0.30

LNKD LinkedIn Corp

$203.98

54.5

A

$0.04

MELI Mercadolibre Inc

$113.00

62.4

A

$0.64

MHK Mohawk Industries, Inc.

$115.02

36.2

A

$1.66

MRC MRC Global Inc

$26.64

33.8

A

$0.39

OPEN OpenTable Inc

$63.97

48.6

A

$0.35

RMD ResMed Inc.

$45.48

44.2

A

$0.61

SBAC SBA Communications Corporation

$76.85

26.3

A

($0.07)

SWN Southwestern Energy Company

$39.51

28.9

A

$0.48

SYNA Synaptics, Incorporated

$42.00

45.8

A

$1.04

TS Tenaris S.A. (ADR)

$43.76

25.1

A

$0.73

TSO Tesoro Corporation

$54.55

42.4

A

$1.43

VCLK ValueClick Inc

$24.41

58.4

A

$0.35

WTW Weight Watchers International, Inc.

$45.51

52.7

A

$1.14

WPRT Westport Innovations Inc. (USA)

$30.86

46.3

A

($0.48)

AVG AVG Technologies NV

$21.66

60.0

 A

$0.35

 

Friday August 2:

Economic: July Employment Situation – 8:30, June Personal Income and Outlays – 8:30, Reuter’s/University of Michigan’s Consumer Sentiment Index – 9:55, June Factory Orders – 10:00.

International Economic:  No major announcements.

Optionable Earnings:

Symbol

Company Name

July 26 close

IV30

B/A

XEPS
CBOE CBOE Holdings, Inc

$49.26

23.2

B

$0.52

EAT Brinker International, Inc.

$38.24

35.6

B

$0.74

ETN Eaton Corporation PLC

$68.02

23.7

B

$1.11

TDS Telephone & Data Systems, Inc.

$26.96

41.0

B

$0.10

UPL Ultra Petroleum Corp.

$21.32

38.2

B

$0.43

VIAB Viacom, Inc.

$72.87

24.9

B

$1.31

YRCW YRC Worldwide Inc

$29.60

107.5

B

($0.93)

CQP Cheniere Energy Partners LP

$30.86

31.5

A

$0.25

LNG Cheniere Energy, Inc.

$28.84

46.4

A

$0.43

 

 

Monday August 5:

Economic:  ISM Non-manufacturing Index – -10:00, TD Ameritrade IMX – 12:30.

International Economic:  No major announcements.

Optionable Earnings:

Symbol

Company Name

July 26 close

IV30

B/A

XEPS
ISIS ISIS Pharmaceuticals, Inc.

$29.27

67.1

B

($0.26)

TSN Tyson Foods, Inc.

$27.10

28.3

B

$0.58

ALNY Alnylam Pharmaceuticals, Inc.

$45.00

57.3

A

($0.34)

FNF Fidelity National Financial Inc

$24.60

26.4

A

$0.62

 

 

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