09:19 ET Morning Movers : The Nasdaq Composite ended on a down note and has been unable to maintain the positive momentum generated in the wake of the pre-market data. A stock that has, however, held on to its favorable tone is Pixar (PIXR 34.09). The company beat its estimate and raised guidance for the rest of the year. It is currently indicated to open more than 4 points higher which puts it beyond an important chart level near 36 (March high, 100/200 week moving average). As long as it is able to remain above this level it will be in position to retest this year's high at 40. Also in the news was Electronic Arts (ERTS 54.52) which beat its quarterly number. However, in response to company guidance, CSFB has lowered its EPS target for FY02 (did slightly revise FY02 revenue higher). Although it is indicated to open only fractionally lower, it is sitting on top of its 50 day simple ma at 54.1. This average held on a closing basis on early month tests. A failure to hold above this support exposes a secondary floor at 51.75/51.25 (62% retracement off April low/20 week simple ma). Other stocks of interest from a chart perspective include: Juniper Networks (JNPR 53.61), Lucent (LU 10.21) and Nabors Industries (NBR 53.75). JNPR is attempting to extend a recovery off its 50 day simple ma (52.60) which was approached yesterday. It is presently indicated to open 0.60 points higher with short term resistances at 55 and 56.5. LU has been closely tracking its 50 day simple ma (10.1) for most of the last week. A failure to hold above initially targets a retracement support at 9.20. NBR, which is in the recently volatile oil service sector, gapped below its own 50 day ma early this month and on repeated attempts has failed to build value beyond this barrier (at 55.5 today). Now eyeing a longer term moving average (200 day at 53.3) which held earlier this week. Penetration here first points to 52.4 with a secondary floor in the 51 area. -- Jim Schroeder, Briefing.com
09:16 ET ******
Rosetta Inpharmatics (RSTA) 9.91: This informational genomic company is up 70% in the pre-market on news that Merck (MRK) is buying the company. Each share of Rosetta stock will be converted into 0.2352 shares of Merck stock, which represents a value of $18 per share, or $620 million. The discovery of the human genome sequence is just the first step in a long process of identifying gene products and their functions, and translating them into innovative medicines that can prevent, treat or cure disease. Rosetta will help Merck more efficiently analyze gene data and intelligently select drug targets....This acquisition should boost interest in its competitors, many of which are very cheap. You can bet your bottom dollar that traders are ravaging through their notes looking for others that were hot last summer, but have been forgotten. A bunch of informational genomic stocks when public last year, but have been a huge bust. We have compiled some names that could move on this news: LION Biosciences (LEON 33.30), Genomica (GNOM 3.58), InforMax (INMX 3.80), Gemini Genomics (GMNI 4.35). Others that are closely related to the field include Genomic Solutions (GNSL 4.22), Orchid Bioscinces (ORCH 4.08), 3-Dimensional Pharma (DDDP 13.84), Sequenom (SQNM 13.40), Variagenics (VGNX 5.30), Illumina (ILMN 9.05), Keryx Biopharma (KERX 7.50), Deltagen (DGEN 8.03). You can almost hear computers zipping to locate names like these, but this is a pretty complete list. Happy hunting! -- Robert J. Reid, Briefing.com
18:17 ET ****** 10-May-01
Thursday After Hours: (Price changes vs. 4 p.m. close) No real bombs dropped in the late session but a few interesting developments from large cap tech companies. Kicking off the list is IBM (+0.80) which reiterated its forward guidance of single-digit revenue growth and double-digit earnings growth. When asked whether double-digit sales growth was possible, CEO Lou Gerstner responded affirmatively but said the company did not want to forecast it. Separately, Nortel Networks (NT +0.27) confirmed tonight the company will be exiting the DSL business in order to focus on higher growth markets. A Nortel spokesman stated, "DSL is a market that's been heavily commodities and it doesn't necessarily match up as a high-growth market for tomorrow." Tonight's earnings calendar is relatively light but Pixar Animation (PIXR +2.21) is worth a mention as the company beat its number by 4 cents and raised its guidance for the remainder of the year. CEO Steven Jobs (formerly founder and CEO of Apple) conducted a positive call highlighting PIXR's upcoming release of Monsters, Inc. due Nov 2. For additional information on these, and other after hours developments, check out Briefing.com's Earnings Calendar and Short Stories pages... Currently, the S&P futures trade at 1261, 2 points above fair value while the Nasdaq 100 futures trade at 1842, 2 points below fair value. --Michael Ashbaugh, Briefing.com
17:56 ET ****** 10-May-01
Pixar Animation (PIXR) 34.09 +0.06: With Pixar reporting after the bell today, we thought another reminder was in order. Diligent Briefing.com subscribers already know the story, but for those that do not, a quick summary is worthwhile. This digital animation studio has created only three movies, but they have all been successful: Toy Story (1995), A Bug's Life (1998) and Toy Story 2 (Nov 99). The company's next release, Monsters Inc., is scheduled for release November 2. Mgmt is saying that the movie is turning out to be fantastic and that it's scoring higher than any of Pixar's prior films in test screenings. Other positives include the company's solid balance sheet with $266 mln in cash, or $5.56 per share. However, this analyst is even more excited about the fact that animation labor costs have stopped spiraling out of control and have actually declined somewhat. With labor costs a large percentage of costs, this will have a meaningful effect on the income statement. In fact, the company upped guidance for this year to $0.40-$0.55, from $0.30-$0.50...The main concern with Monsters is that the Harry Potter movie is scheduled to be released two weeks after Monsters. Harry Potter is expected to be a smash hit, however, Pixar distinguishes Monsters because it's a comedy so it's not in direct competition. Briefing.com is not exactly sold on this point, but we expect both to do well....The performance of a Dreamworks animated feature, Shrek, will impact Pixar's stock over the next couple of months. On the conference call, Pixar said it'll be watching how well Shrek does. A $100 mln take will be viewed as a success. A successful Shrek will be a positive sign for Monsters....In sum, PIXR historically trades strongly into a movie release so we expect the stock to do well over the next few months. We most recently wrote about Pixar in a Stock Brief, but have been calling this name to the attention of our readers since November 9. |
