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MVL

Earnings Date: 08-May-07 BMO

Ticker: MVL

Company: Marvel Entertainment, Inc.

Industry: Movie Productions/ Theaters

Competitor: DreamWorks Animations (DWA)

Summary: Marvel Entertainment, Inc. (Marvel) is a character-based entertainment company, with a library of over 5,000 characters. The Company operates in the licensing, publishing and toy businesses in both domestic and international markets. The Company’s library of characters includes Spider-Man, Iron Man, The Incredible Hulk, Captain America, Thor, Ghost Rider, The Fantastic Four, X-Men, Blade, Daredevil, The Punisher, Namor, Nick Fury, The Avengers, Silver Surfer and Ant-Man. The Company’s business is divided into four operating segments: Licensing, Publishing, Toy and Film Production. The Company and Sony Pictures Entertainment Inc. (Sony Pictures) have entered into a joint venture, called Spider-Man Merchandising L.P. (the Joint Venture), for the purpose of pursuing licensing opportunities relating to characters based upon movies or television shows featuring Spider-Man and produced by Sony Pictures.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
26-Feb-07	2006Q4	($0.31)	($0.64)	$0.05
06-Nov-06	2006Q3	$2.50	($1.05)	$0.04
07-Aug-06	2006Q2	$0.38	$0.88	$0.08
04-May-06	2006Q1	$0.65	$0.02	$0.07
23-Feb-06	2005Q4	$0.09	$1.14	$0.02
09-Nov-05	2005Q3	($4.14)	$0.16	($0.07)
28-Jul-05	2005Q2	($1.70)	$0.17	($0.03)
28-Apr-05	2005Q1	($0.25)	$0.58	$0.04

Technical Analysis: 1-year and all-years chart are both generally uptrend. Stock is challenging it’s all-time high of $30.95 establish on 23-Feb-06.

Average Daily Volume: 714K

Pivot Point Analysis:

R3	$34.32
R2	$32.55
R1	$31.04
PV	$29.27
S1	$27.76
S2	$25.99
S3	$24.48

Fundamental Analysis: MSN rating is 10. Last price is $29.61, target FY end is $66.01 (8 Anaylsts: Low) . Debt/Equity ratio is 0.07, lower than industry of 0.71. ROE = 25%. ROA = 9.4%. Profit margin = 16.70%.

Insider Trading: A Director purchased 10,000 shares @ $27.08. Insider selling for past 52-weeks is more than previous 52-weeks.

Short Ratio: 23.0

IV: 59.18%

News:

Spider-Man 3 Crushes Box Office Records (Updated 7-May-2007)

It comes without much surprise that Spider-Man 3 steamrolled its way through the theaters in its opening weekend. Finishing with a record-shattering three-day total of $148 million, Spider-Man 3 tops the previous box office opening record of $135.6 million set by Pirates of the Caribbean: Dead Man’s Chest.

But the Web-Head didn’t stop there. Snagging the award for largest opening release with 10,000 screens at 4,252 theaters, Spider-Man 3 can claim to have the biggest opening weekend and widest release ever. Additionally, Sam Raimi’s third Spider-Man epic grabbed all-time daily grosses for each weekend day: $59.3 million on Friday, $51 million on Saturday and an estimated $37.7 million on Sunday. It doesn’t end there. Spider-Man 3 is the fastest film to rake in $100 million and is now the biggest IMAX debut: with $4.8 million at 84 jumbo-sized theaters.

And on an even larger scale, Spider-Man 3 now has the biggest world-wide opening ever with roughly $375 million ($227 million spread across 107 countries and $148 million domestically).

Conclusion: Very bullish on MVL due to success of Spider-man 3. Even if earnings for last quarter from Ghost Rider may not be outstanding, would expect the guidance to beat estimates. Don’t forget coming in June is another block-buster, Fantastic Four: Rise of the Silver Surfer.

Position: BTO 3 May 30 Call @ $1.05

Results: Reports Q1 (Mar) earnings of $0.56 per share, $0.21 better than the Reuters Estimates consensus of $0.35; revenues rose 68.0% year/year to $151.4 mln vs the $102.2 mln consensus. Co issues in-line guidance for FY07, reaffirms EPS of  $1.30-1.55 vs. $1.46 consensus; FY07 reaffirms revs of $375-435 mln vs. $433.32 mln consensus. CEO comments, “Marvel’s businesses benefited from global visibility and demand created for Marvel-branded merchandise, primarily from the recent release of major studio-licensed feature films including Spider-Man 3, which achieved a record-breaking opening weekend domestic box office of $151 million. Our Q1 performance also reflects the diverse base of revenue sources that we have built across consumer product segments.

CXW

Earnings Date: 03-May-07 BMO

Ticker: CXW

Company: Corrections Corp. of America

Industry: Property Management

Competitor: The Geo Group, Inc. (GEO)

Summary: Corrections Corporation of America is an owner and operator of privatized correctional and detention facilities, and a prison operator in the United States. As of February 27, 2007, the Company operated 64 correctional, detention and juvenile facilities, including 40 facilities that it owns, with a total design capacity of approximately 72,000 beds in 19 states and the District of Columbia. It also owns three additional correctional facilities that it leases to third-party operators. In addition to providing the fundamental residential services relating to inmates, its facilities offer a variety of rehabilitation and educational programs, including basic education, religious services, life skills and employment training, and substance abuse treatment. It also provides healthcare, food services, and work and recreational programs. The Company also provides prisoner transportation services for governmental agencies through its wholly owned subsidiary, TransCor America, LLC.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
08-Feb-07	2007Q1	$2.29	$1.25	$0.08
06-Nov-06	2006Q4	$1.23	$1.00	$0.02
03-Aug-06	2006Q3	$0.96	$1.89	$0.04
03-May-06	2006Q2	$1.04	$1.20	$0.04
09-Feb-06	2006Q1	$0.13	$1.42	$0.04
03-Nov-05	2005Q4	$0.18	$1.00	$0.02
04-Aug-05	2005Q3	($0.07)	$0.11	($0.01)
05-May-05	2005Q2	($0.12)	($0.30)	$0.01

Technical Analysis: 1-year and all-years chart are both uptrend.

Average Daily Volume: 402K

Pivot Point Analysis:

R3	$64.80
R2	$61.40
R1	$59.10
PV	$55.70
S1	$53.40
S2	$50.00
S3	$47.70

Fundamental Analysis: MSN rating is 7. Last price is $57.50, target FY end is $67.93 (5 Anaylsts: High) . Debt/Equity ratio is 0.93, lower than industry of 2.03. ROE = 10.60%. ROA = 4.80%. Profit margin = 7.90%.

Insider Trading: No insider purchase for past 52-weeks. Insider selling for past 52-weeks is more than previous 52-weeks.

Short Ratio: 3.4

IV: 37.88%

News: (19-Jan-07) Co announces it has received a contract award from the Federal Bureau of Prisons to house up to 1,558 federal inmates at the co’s Eden Detention Center in Eden, Texas. The co currently houses approx 1,300 BOP inmates at the Eden facility, under an existing Inter-Governmental Services Agreement between the B.O.P and the City of Eden. The contract requires a renovation of the Eden facility, which will result in an additional 129 beds. Upon completion, the Eden facility will have a rated capacity of 1,354 beds. Renovation of the Eden facility is expected to be completed in February 2008 at an estimated cost of $20.1 mln.

The contract, awarded as part of the Criminal Alien Requirement Phase 6 Solicitation (“CAR 6″), becomes effective May 1, 2007 and has an initial four-year term with three two-year renewal options. Under the new CAR 6 contract, the Company will receive a fixed monthly payment based on a guaranteed population equal to 90% of the current rated capacity and a per diem payment for each additional inmate thereafter. Following completion of the renovation, the fixed monthly payment will be adjusted to 90% of the new rated capacity beds and a per diem payment for each additional inmate thereafter. Under the provisions of the award, the Company could earn revenues of up to approximately $119.6 million during the initial four-year term of the contract.

Conclusion: CXW has very positive gapping history. Only concern is that it’s at the top of the price channel. It’s competitor, GEO, announced earnings data today. Beats analysts’ estimate but guided lower. Expect CXW not to guide lower as the new contract it was awarded becomes effective in 1-May-07, which means the new facility would be able to contribute to the revenue with immediate effect.

Position: BTO 3 May 60 Call @ $0.80

Results: Reports Q1 (Mar) earnings of $0.52 per share, $0.06 better than the Reuters Estimates consensus of $0.46; revenues rose 11.5% year/year to $350.9 mln vs the $345.1 mln consensus. Co issues in-line guidance for Q2, sees EPS of $0.48-0.52 vs. $0.50 consensus. Co raises guidance for FY07, sees EPS of $1.97-2.07 vs. $2.04 consensus, up from previous of $1.95-2.05.

HOLX

 

Earnings Date: 01-May-07 AMC

Ticker: HOLX

Company: Hologic, Inc.

Industry: Medical Equipment & Supplies

Competitor: General Electric Company (GE), Siemens AG (SI)

Summary: Hologic, Inc. (Hologic) is a developer, manufacturer and supplier of diagnostic and medical imaging systems primarily serving the healthcare needs of women. The Company operates in three segments: mammography and breast care, osteoporosis assessment and other. Hologic’s mammography and breast care products include film-based and digital mammography systems, computer-aided detection, breast biopsy systems, and breast biopsy and tissue extraction devices. The Company’s osteoporosis assessment products primarily consist of dual-energy X-ray bone densitometry systems and an ultrasound-based osteoporosis assessment product. Hologic’s other business unit includes its Fluoroscan mini C-arm imaging products, its Esaote line of extremity magnetic resonance imaging (MRI) systems and its photoconductor coating business. During the fiscal year ended September 30, 2006, the Company acquired AEG Elektrofotografie GmbH, R2 Technology, Inc. and Suros Surgical Systems, Inc.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
31-Jan-07	2007Q1	$0.75	$5.99	$0.06
08-Nov-06	2006Q4	$1.40	($1.34)	$0.02
25-Jul-06	2006Q3	$1.27	$2.03	$0.05
25-Apr-06	2006Q2	$2.86	($4.44)	$0.03
24-Jan-06	2006Q1	$3.98	$1.24	($0.02)
02-Nov-05	2005Q4	$1.27	$1.13	$0.05
27-Jul-05	2005Q3	$2.72	$0.57	$0.08
27-Apr-05	2005Q2	$0.24	$1.73	$0.06

Technical Analysis: 1-year and all-years chart are both uptrend.

Average Daily Volume: 825K

Pivot Point Analysis:

R3	$68.61
R2	$64.43
R1	$61.03
PV	$56.85
S1	$53.45
S2	$49.27
S3	$45.87

Fundamental Analysis: MSN rating is 6. Last price is $58.38, target FY end is $113.63 (8 Anaylsts: Medium) . Debt/Equity ratio is 0.08, lower than industry of 0.34. ROE = 8.5%. ROA = 6.1%. Profit margin = 7%.

Insider Trading: No insider purchase for past 52-weeks. Insider selling for past 52-weeks is more than previous 52-weeks.

Short Ratio: 10.6

IV: 51.55%

News: (5-Apr-07) Dawson James notes that The New England Journal of Medicine just published a study titled “Influence of Computer-Aided Detection on Performance of Screening Mammography” which concluded that C.A.D is not useful in mammography. Firm believes the paper is very misleading and recommend buying ICAD and HOLX shares on today’s weakness. Firm says the findings run contrary to over 30 research papers published from 1998-2007. They also say the main purpose of C.A.D is to detect breast cancer earlier (when it’s smaller) which was not measured in the study. The study only measured detection rates without regard to earlier detection or tumor size.

Conclusion: The stock is consolidating after the negative news on 5-Apr. Gapping history is very positive, some even couple with stunning intraday moves.

Position: BTO 1 May 60 Call @ $2.10

Results: Reports Q2 (Mar) earnings of $0.47 per share, excluding non-recurring items, $0.05 better than the Reuters Estimates consensus of $0.42; revenues rose 79.3% year/year to $181.1 mln vs the $174.8 mln consensus.

FEIC

Earnings Date: 30-Apr-07 AMC

Ticker: FEIC

Company: FEI Company

Industry: Semiconductors

Competitor: Applied Materials, Inc. (AMAT), Hitach, Ltd. (HIT), Credence Systems Corp. (CMOS)
Summary: FEI Company is a supplier of instruments for nanoscale imaging, analysis and prototyping to enable research, development and manufacturing in a range of industrial, academic and research institutional applications. The Company’s products and systems include hardware and software for focused ion beam systems (FIBs), scanning electron microscopes (SEMs), transmission electron microscopes (TEMs) and DualBeam systems, which combine a FIB and SEM on a single platform. The Company operates through four segments: NanoElectronics, NanoResearch and Industry, NanoBiology, and Service and Components. During the year ended December 31, 2006, the Company sold the assets and operations related to Knights Technology that was included as part of its NanoElectronics operating segment.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
06-Feb-07	2006Q4	$3.59	$3.52	$0.08
01-Nov-06	2006Q3	$0.46	$2.52	$0.02
02-Aug-06	2006Q2	($1.86)	$0.96	($0.03)
03-May-06	2006Q1	$1.83	$1.44	$0.12
07-Feb-06	2005Q4	($2.15)	($1.31)	($0.14)
25-Oct-05	2005Q3	($1.10)	$1.20	$0.05
03-Aug-05	2005Q2	($2.33)	$1.19	($0.02)
27-Apr-05	2005Q1	($2.21)	$0.59	($0.02)

Technical Analysis: 1-year chart is uptrend. Semicon stocks are usually cyclical.

Average Daily Volume: 527K

Pivot Point Analysis:

R3	$42.56
R2	$39.52
R1	$37.79
PV	$34.75
S1	$33.02
S2	$29.98
S3	$28.25

Fundamental Analysis: MSN rating is 6. Last price is $37.64, target FY end is $112.92 (5 Anaylsts: High) . Debt/Equity ratio is 0.89, lower than industry of 0.31. Sales, EPS and Free Cashflow were increasing over past few years gradually. ROE = 5.5%. ROA = 2.3%. Profit margin is also lower than market.

Insider Trading: Insider selling for past 52-weeks is more than previous 52-weeks.

Ony insider purchase was by Wilfred J Corrigan (4,000 shares @ $25.30 on 30-Jan-07), Chairman of LSI Logic board and also sits in FEI Company board. He is a semiconductor veteran that pioneered the ASIC business and fostered the fabless model. More information available here. This is his first and only purchase of FEIC shares and he has already made ~31% and is still holding on to the stock.

Short Ratio: 5.8

IV: 62.03%

News: (8-Mar-07) Brean Murray says that while FEIC has been one of their top performers over the past six months, they see several future factors that indicate that the recent upward move in its share price has more room to run. Led by orders for FEIC’s industry-leading Titan TEM, the firm has a soaring backlog, which coupled with steadily improving margins, new product introductions and a rebound in business next year from FEIC’s NanoElectronics customers are expected to continue FEIC’s upward momentum. For 2008, firm forecasts FEIC posting net income of $84.2 mln, or $1.89 per diluted share, on sales of $683 mln. Coupled with historical and peer group valuations, this earnings forecast translates into a one-year target price of $38.

Conclusion: Stock’s recent uptrend (higher highs & higher lows) is propelled by strong volume. Semicon industry is migrating to more advanced process technology of smaller dimension, creating the demand for newer and higher resolution FIB, SEM & TEM.

Position: BTO 2 May 40 Call @ $1.20

Results: Reports Q1 (Mar) earnings of $0.36 per share, $0.06 better than the Reuters Estimates consensus of $0.30; revenues rose 31.8% year/year to $148 mln vs the $141.2 mln consensus. Co issues in-line guidance for Q2, sees EPS of $0.32-0.37 vs. $0.33 consensus; sees Q2 revs of $145-152 mln vs. $146.93 mln consensus.

MHS

 

Earnings Date: 1-May-07 BMO

Ticker: MHS

Company: Medco Health Solutions, Inc.

Industry: Retail (Drugs)

Competitor: CVS/Caremark Corporation (CVS)

Summary: Medco Health Solutions Inc. (Medco) is a pharmacy benefit manager. The Company provides traditional and specialty prescription drug benefit programs and services for its clients, members of client-funded benefit plans or those served by the Medicare Part D Prescription Drug Program (Medicare Part D), and individual patients. Medco has a number of clients in each of the major industry categories, including Blue Cross/Blue Shield plans; managed-care organizations; insurance carriers; third-party benefit plan administrators; employers; federal, state and local government agencies, and union-sponsored benefit plans.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
21-Feb-07	2006Q4	$3.61	$2.60	$0.07
03-Nov-06	2006Q3	$1.75	($2.01)	$0.00
04-Aug-06	2006Q2	$2.65	($1.10)	$0.04
05-May-06	2006Q1	$2.48	($0.49)	$0.01
01-Mar-06	2005Q4	$2.28	$1.28	$0.05
01-Nov-05	2005Q3	($6.09)	($0.61)	($0.07)
26-Jul-05	2005Q2	($0.07)	$0.10	$0.00
26-Apr-05	2005Q1	$1.02	($3.90)	$0.01

Technical Analysis: Both 1-year & all-years charts show clear uptrend.

Average Daily Volume: 2.5Mil

Pivot Point Analysis:

R3	$86.73
R2	$79.69
R1	$72.13
PV	$65.09
S1	$57.53
S2	$50.49
S3	$42.93

Fundamental Analysis: MSN rating is 7. Last price is ~$78.60, target FY end is $126.67 (18 Anaylsts: High) . Debt/Equity ratio is 0.17, lower than industry of 0.37. Sales & EPS were increasing over past few years. Free Cashflow is more than $1B. ROE = 8.4%. ROA = 4.6%, both lower than competitor CVS. Profit margin is also lower than competitor.

Insider Trading: No significant insider purchase in past 12 months. Insider selling for past 52-weeks is also lesser than previous 52-weeks.

Short Ratio: 1.9

IV:

News: (9-Apr-07) BofA says strong same-stores sales growth and generic utilization reported by the leading retail pharmacies bodes well for the independent PBMs from an earnings perspective in 1Q07. Firm expects the shares of Express Scripts (ESRX) and Medco Health Solutions (MHS) to trade up into their respective earnings releases. Evidence of strong, continuing generic utilization gives firm confidence that their forecasts for 2007 remain conservative, particularly given earlier than expected availability of a generic formulation of Norvasc, as well as increasingly relevant specialty pharmaceutical sales and expected share repurchase activity. Valuations of 17.0 times (ESRX) and 20.0 times (MHS) 2008E GAAP EPS remain conservative relative to historic multiples, leading firm to believe the shares will trade up into their earnings reports starting on April 23.

Conclusion: Can’t find any reason not to play this company. Did not take any position as already have bought into HOLX and FEIC. Let’s see how this counter perform.

Position:

Results: Reports Q1 (Mar) earnings of $1.03 per share, ex items, $0.30 better than the Reuters Estimates consensus of $0.73; revenues rose 5.6% year/year to $11.16 bln vs the $11.17 bln consensus. Co issues upside guidance for FY07, sees EPS of $3.40-3.45, ex items vs. $3.36 consensus.

GGP

Earnings Date: 30-Apr-07 AMC

Ticker: GGP

Company: General Growth Properties

Industry: Real Estate Operations

Competitor: Simon Property Grou, Inc. (SPG), Macerich (MAC), CBL & Associates Properties (CBL)

Summary: General Growth Properties, Inc. (General Growth) is a self-administered and self-managed real estate investment trust (REIT). General Growth operates, develops and manages retail and other rental properties, primarily shopping centers, which are located primarily throughout the United States. As of December 31, 2006, General Growth also had international investments through unconsolidated real estate affiliates in Brazil, Turkey and Costa Rica. It also develops and sells land for residential, commercial and other uses primarily in large-scale, long-term master planned communities projects in and around Columbia, Maryland; Summerlin, Nevada, and Houston, Texas. It conducts substantially all of its business through GGP Limited Partnership (GGPLP). It operates in two segments: the Retail and Other segment, and Master Planned Communities segment. The GGPLP generally conducts its operations through GGPLP L.L.C., The Rouse Company LP and General Growth Management, Inc.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
12-Feb-07	2006Q4	($0.90)	$3.48	$0.03
06-Nov-06	2006Q3	($1.70)	$0.50	($0.08)
07-Aug-06	2006Q2	($1.58)	$0.19	($0.12)
08-May-06	2006Q1	($0.01)	$0.53	$0.04
21-Feb-06	2005Q4	($3.10)	$0.92	($0.10)

Technical Analysis: Both 1-year & all-years charts show clear uptrend. Observed some consolidation in past two months.

Average Daily Volume: 1.74Mil

Pivot Point Analysis:

R3	$78.03
R2	$72.73
R1	$68.65
PV	$63.35
S1	$59.27
S2	$53.97
S3	$49.89

Fundamental Analysis: MSN rating is 8. Last price is ~$64.62, target FY end is $855.43 (12 Anaylsts: High) (error ???) . Debt/Equity ratio is 12.33, higher than industry of 4.38. Sales were increasing over last few years but EPS was fluctuating. Negative Free Cashflow in 2003-2004. ROE = 3.4%. ROA = 0.2%.

Insider Trading: CFO bought lots of shares from 2004 till present. Total shares he owns is ~6.7 million. Last purchase was in March (US$1.6M) and February (US$3.3M) this year.

Short Ratio: 5.9

IV:

News:

Conclusion: Mainly purchase by this CFO. Very interesting. Needs to investigate more. Decided not to take any position as gapping history was not impressive.

Position:

Results: Reports Q1 (Mar) core funds from operations of $0.65 per share, may not be comparable to the Reuters Estimates consensus of $0.74; revenues fell 12.0% year/year to $728.8 mln vs the $934.9 mln consensus. Reuters Estimates is telling us that, excluding tax benefit recognized in the first quarter of 2007 attributable to the completion of the previously reported restructuring of certain operating subsidiaries, an actual of $0.65 per share is comparable to Reuters estimates of $0.74.

SIMO

Earnings Date: 26-Apr-07 AMC

Ticker: SIMO

Company: Silicon Motion Technology Corp.

Industry: Semiconductors

Competitor:

Summary: Silicon Motion Technology Corporation (SMTC) is a holding company that substantially conducts all of its operations through Silicon Motion, Inc. (SMI), a wholly owned subsidiary. SMTC is a fabless semiconductor company that designs, develops and markets universally compatible, high-performance, low-power semiconductor solutions for the multimedia consumer electronics market. The Company’s semiconductor solutions include controllers used in mobile storage media, such as flash memory cards and universal serial bus (USB) flash drives and multimedia systems-on-a-chip (SoCs) used in digital media devices such as Moving Picture Experts Group Layer-3 Audio (MP3) players, personal computer (PC) cameras, PC notebooks and broadband multimedia phones. SMTC sells its semiconductor solutions to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) worldwide.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
1-Feb-07	2006Q4	$0.60	$0.34	$0.02
26-Oct-06	2006Q3	$1.20	($1.60)	$0.04
27-Jul-06	2006Q2	$0.35	$0.12	$0.03
27-Apr-06	2006Q1	$0.04	($0.02)	($0.01)
25-Jan-06	2005Q4	$1.21	$0.49	$0.00
27-Oct-05	2005Q3	($0.33)	($0.14)	$0.05

Technical Analysis: Both 1-year & all-years charts show clear uptrend, challenging it’s all time high of ~$27 set on 22-Mar-07.

Average Daily Volume: 1.08Mil

Pivot Point Analysis:

R3	$34.55
R2	$30.91
R1	$26.72
PV	$23.08
S1	$18.89
S2	$15.25
S3	$11.06

Fundamental Analysis: MSN rating is 10. Last price is ~$24.70, target FY end is $36.18 (4 Anaylsts: High). Debt/Equity ratio not available. Sales & EPS were increasing over last two years. Free Cashflow was increasing over last two years. ROE = 22.8%. ROA = 19.70%.

Insider Trading: No insider market purchase for past one year.

Short Ratio: 0.3

IV:

News:

Conclusion: Everything looks positive, and looks like the stock is gonna challenge the March all-time high of ~$27. As premium is not too expensive, 25 Call should become ITM and profitable.
Position: BTO 2 May 25 Call @ $1.20

Results: Reports Q1 (Mar) ADS of $0.31 per share, $0.02 better than the Reuters Estimates consensus of $0.29; revenues rose 102.9% year/year to $35.5 mln vs the $33.8 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $37-39 vs. $36.00 mln consensus. Co raises guidance for FY07, sees EPS of $1.40-1.50 vs. $1.32 consensus, up from previous of $1.20-1.30.

MFE

 

Earnings Date: 26-Apr-07 AMC

Ticker: MFE

Company: McAfee, Inc.

Industry: Software & Programming

Competitor: Symantec Corporation (SYMC), Trend Micro Incorporated (TMIC)

Summary: McAfee, Inc. is a global supplier of computer security solutions designed to prevent intrusions on networks and secure computer systems and other digital devices from a variety of known and unknown threats and attacks. The Company offers two families of products: McAfee System Protection Solutions and McAfee Network Protection Solutions. The solutions include anti-virus, anti-spyware, anti-spam, intrusion prevention, secure messaging, Web filtering and vulnerability management. McAfee also offers policy management tools to keep threat-protection systems up-to-date and allow companies to enforce security policies. Its products are offered primarily to large enterprises, governments, small and medium-sized businesses and consumers through a network of qualified partners. McAfee operates its business in five geographic regions: North America; Europe, Middle East and Africa; Japan; Asia-Pacific, excluding Japan, and Latin America. In October 2006, the Company acquired Onigma Ltd.

Gapping Analysis:

Date	Quarter	Gap ($)	Intraday	Beats(Misses)
8-Feb-07	2006Q4	($0.42)	$0.24	$0.02
26-Oct-06	2006Q3	$1.73	($0.19)	$0.06
27-Jul-06	2006Q2	($2.92)	$1.25	($0.01)
27-Apr-06	2006Q1	$1.72	($0.21)	$0.07
9-Feb-06	2005Q4	$2.02	$2.00	$0.01
27-Oct-05	2005Q3	$0.69	($1.90)	$0.08
28-Jul-05	2005Q2	$1.38	$0.37	$0.06
05-May-05	2005Q1	$2.00	$1.20	$0.08

Technical Analysis: Both 1-year & all-years charts do not show any obvious trend.

Average Daily Volume: 1.01Mil

Pivot Point Analysis:

R3	$31.79
R2	$31.24
R1	$30.16
PV	$29.61
S1	$28.53
S2	$27.98
S3	$26.90

Fundamental Analysis: MSN rating is 7. Last price is ~$30.00, target FY end is $44.12 (12 Anaylsts: Medium). Debt/Equity ratio not available. Sales & EPS were inconsistent. Free Cashflow was increasing over last few years. ROE = 10.6%. ROA = 5.8%.

Insider Trading: No insider market purchase for past one year.

Short Ratio: 3.6

IV:

News: (11/4/07) Wachovia notes that Dave DeWalt started as the new CEO of MFE at the beginning of April, and sources within the co suggest his presence has already had a positive impact. Firm says that current business trends are positive and channel checks are solid, and they think that MFE is undervalued at 16.8x CY08 EPS vs 19.0x for the security software sector and 23.8x for the enterprise software group. Maintains Outperform.

Conclusion: Noted that stock chart did not show strong positive trend, and gapping history was not consistently positive. Due to recent hugh gaps in Tech stocks, decided to take a small risk and buy FOTM Calls at very cheap price.
Position: BTO 5 May 35 Call @ $0.10

Results: Reports Q1 (Mar) earnings of $0.44 per share, excluding non-recurring items, $0.10 better than the Reuters Estimates consensus of $0.34; revenues rose 15.5% year/year to $314.2 mln vs the $292.4 mln consensus. Co issues in-line guidance for Q2, sees EPS of $0.33-0.38 vs. $0.37 consensus; sees Q2 revs of $295-310 bln vs. $307.46 mln consensus. Co guides for FY07, sees EPS of $1.55-1.65 vs. $1.52 consensus; sees FY07 revs of $1.22-1.29 bln vs. $1.24 bln consensus.

AAPL

Apple gapped up more than $6.00 before market opened. Earnings were good but guided  EPS & revenue below consensus. Didn’t think the stock could sustain the momentum. BTO 2 May 95 Put @ $0.55 to bet the stock to close the gap. Stock closed @ $98.30 when market closed and the May 95 Put premium was $0.85. Pure speculation, no research was done.