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Schaeffer's Street Chatter Highlights the Following Stocks: Bristol-Myers Squibb, Halliburton and Merck
CINCINNATI
Schaeffer's
Tom Godich, 513-589-3800
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Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Bristol-Myers Squibb (NYSE:BMY), Halliburton (NYSE:HAL) and Merck (NYSE:MRK). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.
For additional information about this report or to have it delivered to you free via email every day click on the following link: schaeffersresearch.com.
Street Chatter:
1. Pharmaceutical name Bristol-Myers Squibb (NYSE: BMY) stepped into the earnings spotlight this morning and reported third-quarter results of 38 cents per share, a penny shy of Wall Street's expectations and 16 percent below last year's net results. Sales managed to creep higher by one percent. BMY officials said the firm's bottom line was the continued money being spent on the development of new drugs, as patents expire and competition looms. In terms of full-year results, BMY is now targeting $1.39-$1.44 per share, down from its July projection of $1.43-$1.48 per share and beneath the $1.59 collected during 2003.
BMY has logged a three-percent loss today on the news. The stock has been slumping over the past several weeks and pressed back below its 10-day and 20-day moving averages in today's action. Since mid-2002, the shares have been relatively directionless, remaining range-bound between the 20 and 30 levels.
Sentiment is rather negative on BMY, which isn't altogether surprising given the lackluster price action and unimpressive fundamental picture. Schaeffer's put/call open interest ratio (SOIR) for BMY stands at 0.63, which, while not that imposing on an absolute basis, is just nine percent away from an annual high. Wall Street is very cautious of BMY, as evidenced by the latest Zacks (www.Zacks.com) readings. Of 20 analyst rankings, there are nine outright "sell" designations, 11 "holds," and nary a "buy" rating to be found. While this does leave room for potential upgrades, the stock needs to do something first to be worthy of such a vote of confidence.
Click the following link to see the Daily Chart of BMY Since September 2004 With 10-Day and 20-Day Moving Averages: schaeffersresearch.com.
2. Last night, sources reported to news outlets that the FBI is expanding its investigation into whether Halliburton (NYSE: HAL) , oil-services firm and the former company of Vice President Dick Cheney, benefited from improperly granted no-bid contracts. The bureau is reportedly collecting documents from U.S. government offices and hoping to conduct interviews with military officials.
The news is not fazing HAL shares, which have been on the rise for more than two years, more than quadrupling in value over this time frame. The stock has climbed more than one percent today after notching a new annual peak in Wednesday's trading.
The equity's SOIR spiked higher after October options expiration and now stands at 0.68, in the 10th annual percentile. In other words, this sentiment indicator has only been higher during 10 percent of the year. Meanwhile the number of shorted HAL shares rose almost 10 percent last month to 15 million, for a short-interest ratio of more than three days to cover. These creeping signs of pessimism could be beneficial from a contrarian perspective, as bearish positioning on an outperforming stock is considered a positive sign.
One group that is not bearish in the slightest is Wall Street. There are currently 17 "buy" or "strong buy" ratings on HAL, compared to zero "holds," and a measly one "sell" rating. As such, the potential for future downgrades is virtually non-existent.
Click the following link to see the Monthly Chart of HAL Since July 2002 With 10-Month and 20-Month Moving Averages: schaeffersresearch.com.
3. Merck (NYSE: MRK) got some much-needed good news today, as the U.S. Food and Drug Administration offered an approvable letter for the company's pain treatment Arcoxia, which is in the came category as the arthritis treatment Vioxx, which was recently yanked off the shelves amid much consternation. While the FDS says it will require additional safety and efficacy data before offering a full-fledged thumbs-up, today's move was thought as a positive one for the beleaguered pharmaceutical company.
Despite this news, MRK has hovered near the breakeven mark today. Since its late-September plunge, MRK has failed to mount any sort of a recovery and continues to hover around eight-year lows. Over the past few sessions, however, the stock has managed to eke above its 10-day and 20-day moving averages.
The options players are bearish on the stock, which should come as no great surprise. Specifically, SOIR for MRK weighs in at 0.78, in the 93rd annual percentile. Short interest remains fairly muted, however, at 15 million shares, which could be covered in less than one trading day at the stock's average daily volume. Wall Street is resoundingly neutral on the issue, offering up two "buys," 20 "holds," and no outright "sells."
Click the following link to see the Daily Chart of MRK Since September 2004 With 10-Day and 20-Day Moving Averages: schaeffersresearch.com.
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About Schaeffer's Investment Research (www.SchaeffersResearch.com)
Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, schaeffersresearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: schaeffersresearch.com; |
