BloggingStocks

Chicago Merc (CME) soars on Q2 earnings

Brent Archer — 2008-07-22T15:09:00+00:00

Filed under: Major movement, Earnings reports, Good news, Chicago Merc Exch Hld'A' (CME), Options, Technical Analysis

Chicago Mercatile Exchange (NYSE: CME) shares are soaring higher today after the company reported a second-quarter profit of $201 million, or $3.67 per share. Excluding one-time costs, CME earned $3.93 per share, beating analysts' estimates of $3.85 per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CME.

After hitting a one-year high of $714.48 in December, the stock hit a one-year low of $282.00 last week. CME opened this morning at $328.99. So far today the stock has hit a low of $326.67 and a high of $349.80. As of 12:50, CME is trading at $344.28, up $18.75 (5.8%). The chart for CME looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $280 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just four weeks as long as CME is above $280 at August expiration. CME would have to fall by more than 18% before we would start to lose money. Learn more about this type of trade here.

CME hasn't been below $280 at all in the past year and has shown support around $290 recently. This trade could be risky if the economy keeps getting worse over the next month, but even if that happens, this position could be protected by the support the stock might find at its year low of $282.00.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in CME.

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Analyst upgrades: SONE, CME and RDEN

Eric Buscemi — 2008-06-17T11:44:00+00:00

Filed under: Analyst upgrades and downgrades, Chicago Merc Exch Hld'A' (CME)

MOST NOTEWORTHY: S1 Corp, CME Group and Elizabeth Arden were today's noteworthy upgrades:

Stephens upgraded shares of S1 Corp (NASDAQ: SONE) to Overweight from Equal Weight after meeting with management to reflect their increased confidence in the company's ability to execute. The firm maintains a $9 target on the stock.
Citigroup upgraded shares of CME Group (NYSE: CME) to Buy from Hold as they find the risk/reward attractive with volumes picking up and consensus estimates at more rational levels. The firm maintains a $485 target.
Oppenheimer raised Elizabeth Arden (NASDAQ: RDEN) to Outperform from Perform on valuation, as they believe the current share price does not adequately reflect potential earnings accretion from the company's licensing agreement with Liz Claiborne (NYSE: LIZ) or restructuring savings.

OTHER UPGRADES:

Double Hull Tankers (NYSE: DHT) was raised to Neutral from Underweight at JP Morgan.
Hovnanian (NYSE: HOV) was upgraded at UBS to Neutral from UBS.
BMO Capital upgraded Xyratex (NASDAQ: XRTX) to Outperform from Market Perform.

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Chicago Mercantile Exchange (CME) falls on NYX earnings

Brent Archer — 2008-05-06T15:34:00+00:00

Filed under: Earnings reports, Bad news, Industry, Chicago Merc Exch Hld'A' (CME), NYSE Euronext (NYX), Options, Technical Analysis

CME Group (NYSE: CME) shares are falling after competitor NYSE Euronext (NYSE: NYX) reported a first-quarter profit above analysts' estimates. CME's earnings that disappointed investors two weeks ago look even worse in light of NYX's good results this morning. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CME.

After hitting a one-year high of $714.48 in December, the stock hit a one-year low of $399.01 in March. This morning, CME opened at $487.00. So far today the stock has hit a low of $476.27 and a high of $487.65. As of 12:40, CME is trading at $481.03, down $8.32 (-1.7%). The chart for CME looks neutral but improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $550 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in six and a half weeks as long as CME is below $550 at June expiration. CME would have to rise by more than 14% before we would start to lose money. Learn more about this type of trade here.

CME hasn't been above $535 since early February and has shown resistance around $523 recently. This trade could be risky if the stock has found a floor recently in the mid-$400s and starts to recover, but even if that happens, this position could be protected by resistance CME might find around $530, where it has topped out twice over the past 3 months.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in CME.

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CME pumps up the energy with a $9.3 billion deal

Tom Taulli — 2008-03-17T08:30:00+00:00

Filed under: Chicago Merc Exch Hld'A' (CME), Bear Stearns Cos (BSC)

Well, there seems to be one healthy part of the financial system - that is, the exchanges. Actually, this week, we got another mega deal: CME Group (NYSE: CME) has agreed to pay $9.3 billion for NYMEX Holdings (NASDAQ: NMX).

Yes, the CME is already the world's largest futures marketplace. But with the Nymex, there will be some extra heft with oil, natural gas and gold futures (all of which, of course, have been torrid).

No doubt, the CME has shown a big appetite for deals. After all, in the middle of last year, the firm purchased the venerable CBOT for a cool $12 billion.

Interestingly enough, the NYMEX has a major footprint in the over-the-counter derivatives marketplace, which has been a money maker. Yet, as seen with the implosion at The Bear Stearns Companies, Inc. (NYSE: BSC) and a variety of major hedge funds, it seems that this market is undergoing some scrutiny.

However, integration of the deal should be a fairly smooth process since the NYMEX already uses the CME Globex platform. What's more, the merger is expected to result in annual cost savings of about $60 million.

But Wall Street definitely has concerns. On the news of the deal, the CME's stock fell 7.58% to $449.20.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Cramer on BloggingStocks: Four $200-plus stocks with no quit

Jim Cramer — 2007-12-10T09:00:00+00:00

Filed under: Chicago Merc Exch Hld'A' (CME), MasterCard Inc'A' (MA), Stocks to Buy, Intuitive Surgical Inc (ISRG), Cramer on BloggingStocks

TheStreet.com's Jim Cramer says these loved and hated stocks aren't likely to fall until January.

First Solar (NASDAQ: FSLR) (Cramer's Take), CME (NYSE: CME) (Cramer's Take), Intuitive Surgical (NASDAQ: ISRG) (Cramer's Take) and MasterCard (NYSE: MA) (Cramer's Take) are amazing stocks.

They are loved and hated. MasterCard is constantly being sold because it is supposed to be a consumer-spending play. It is not a consumer-spending play; it is a play on the increasing use of plastic over cash worldwide and on the possibility of a fee increase next year, even as the company has been so conservative as to let you think fees are going down. The fact that it isn't down despite Capital One (NYSE: COF) (Cramer's Take) and American Express (NYSE: AXP) (Cramer's Take) shows me maybe some people are getting this distinction.

First Solar has a nonsilicon way of making solar energy devices that simply gives it a huge price advantage over everyone else in the business.

CME is the play on volatility, and it is considered to be a fee-raising machine. No one can really challenge the company. Intuitive Surgical is the Da Vinci machine, that wondrous method of surgery, and seems to know no bounds even as at this price the company will have to land a lot more business for a lot more surgeries than it has so far.

These are all $200-plus stocks, and they have no signs of quitting. (I think Apple (NASDAQ: AAPL) (Cramer's Take) joins them next week, by the way, because of a super quarter coming.)

What's so interesting to me is that these stocks have somehow become so anointed that there seems to be no reason to sell them. In other words, at this point if you own them you are reluctant to take that gain.

In fact, I don't think you will see these heavily owned by mutual fund stocks until next January. These funds don't want to take big capital gains for this year at this point. It isn't what their customers want.

So they hold on, there is so little supply and they can go much higher on very little volume.

Rather amazing even for this bull.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had not positions in stocks mentioned in this post.

Analyst upgrades: NTRI, UA, CME, AKH and KRC

Eric Buscemi — 2007-10-01T11:15:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Chicago Merc Exch Hld'A' (CME), Under Armour'A' (UA), Symantec Corp (SYMC)

MOST NOTEWORTHY: NutriSystem, Under Armour, CME Group, Air France ADS and Kilroy Realty were today's noteworthy upgrades:

NutriSystem (NASDAQ: NTRI) was upgraded to Strong Buy from Buy at Broadpoint on valuation, as they believe all concerns are overdone.
Think Equities upgraded Under Armour (NYSE: UA) to Buy from Accumulate on valuation.
Wachovia upgraded CME Group (NYSE: CME) to Overweight from Market weight, as they expect fed income volumes to benefit from a more active Federal Reserve.
Goldman added Air France (NYSE: AKH) to its Pan-European Conviction Buy List citing valuation following the recent sell-off.
Citigroup upgraded shares of Kilroy Realty (NYSE: KRC) to Buy from Hold on valuation, as they believe concerns are overblown and the company's underleveraged balance sheet can drive growth.

OTHER UPGRADES:

UBS raised SXC Health Solutions (NASDAQ: SXCI) to Buy from Neutral.
Think Equities upgraded Symantec Corporation (NASDAQ: SYMC) to Accumulate from Source of Funds.
DA Davidson & Co upgraded Texas Industries (NYSE: TXI) to Buy from Hold.
Lehman upgraded Intersil Corporation (NASDAQ: ISIL) to Equal Weight from Underweight.
Keefe Bruyette upgraded SEI Investments (NASDAQ: SEIC) to Outperform from Market Perform.

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Analyst initiations 9-7-07: Exchange sector, PGNX, TEL and PMC

Eric Buscemi — 2007-09-07T11:10:00+00:00

Filed under: Analyst reports, Chicago Merc Exch Hld'A' (CME), NYSE Euronext (NYX), Analyst initiations

MOST NOTEWORTHY: The exchange sector, Progenics Pharma, Tyco Electronics and PharMerica were today's noteworthy initiations:

Keefe Bruyette initiated coverage on Exchange Sector: The firm started shares of CME Group Inc (NYSE: CME), NYMEX Holdings Inc (NYSE: NMX) and NYSE Euronext Inc (NYSE: NYX) with Outperform ratings and a $669 target, $147 target and $90 target, respectively. The firm also started shares of Investment Technology Group (NYSE: ITG), Nasdaq Stock Market Inc (NASDAQ: NDAQ) and IntercontinentalExchange Inc (NYSE: ICE) with Underperform ratings and a $47 target, $36 target and $158 target, respectively, and shares of Knight Capital Group (NASDAQ: NITE) with an Underperform rating and $13 target.
Progenics Pharmaceuticals (NASDAQ: PGNX) was added to Friedman Billings' Top Picks list and its Outperform rating was maintained. The firm has a high degree of confidence in the success of the MNTX Ph III studies in post-operative ilieus, as well as the FDA approval of the subcutaneous injection in terminally ill patients with opiod-induced constipation around the 1/31/07 PDUFA date.
RBC believes margin expansion will drive long-term appreciation in Tyco Electronics Ltd (NYSE: TEL) and started shares with an Outperform rating and $41 target.
PharMerica Corporation (NYSE: PMC) was initiated with an Underperform rating at Bear Stearns. The firm believes PMC will be pressured by customer losses and generic reimbursement cuts and sees shares trading in $12-$13 range.

OTHER INITIATIONS:

Ryanair Holdings (NASDAQ: RYAAY) was initiated with a Market Outperform rating at Avondale.u
Banc of America initiated shares of Town Sports International (NASDAQ: CLUB) with a Sell rating and $15 target.
Goldman started shares of Genesis Lease Ltd (NYSE: GLS) and Aircastle Ltd (NYSE: AYR) with Neutral ratings.

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Piggyback Investing: Navellier likes AAPL, CSCO, ICE and SLB

Kevin Kelly — 2007-08-20T10:00:00+00:00

Filed under: Apple Inc (AAPL), Cisco Systems (CSCO), Columns, AT and T (T), Schlumberger Limited (SLB), Chicago Merc Exch Hld'A' (CME), NYSE Euronext (NYX), Research in Motion (RIMM), Akamai Technologies (AKAM), Stocks to Buy

I usually tend to favor the study and analysis of value-oriented professional portfolios over growth-oriented one. After the past week's volatility, however, I've seen many growth stocks begin to offer buying opportunities.
[Image source: InvestorPlace.com.]

Louis Navellier is a very well-known growth investor who writes the Blue Chip Growth newsletter and manages Navellier & Associates, a $4.5 billion fund focused on finding stocks that "should contribute significantly to overall portfolio outperformance against relative benchmarks."

Because the fund owns so many stocks, I'm only going to focus on Navellier's favorite industries, or themes, and the favorite ideas within each one. If you read through Navellier's 'position sheet,' it should become pretty apparent that the several themes he's currently riding in the market, are big tech, exchanges and oil service companies
Big Tech

Big technology companies seem to be the trade of the year, especially before this week's sell-off. Investors believe that Apple (NASDAQ: AAPL) and Research in Motion (NASDAQ: RIMM) are both going to do unbelievably well in the next few years as smartphones become more prevalent, Mac computers gain market share, and so on. Navellier has a big position in both of these stocks.

My issue with both Apple and Research in Motion is that they appear to be priced near perfection, even after the recent sell-off. Unless the market regains its momentum and turns around, I'm a skeptic about both of these stocks. As I've said before, I believe AT&T (NYSE: T) is the safest (and presumably the least volatile) way to play the smartphone surge in the United States. You can see from the chart on the left that this thesis held up during the recent downturn.

Navellier also has big positions in several other technology prominent tech names. For example, he has a position in Cisco Systems (NASDAQ: CSCO). At just 16x forward earnings, with solid growth expectations and a very clean balance sheet, Cisco is indeed a very interesting stock at these levels. An interesting strategy could be a cash-covered put sale with the recent increase in volatility. He also has a smaller position in Akamai (NASDAQ: AKAM), a stock I covered here.

Exchanges

Wall Street has fallen in love with trading exchanges in the last few years. The increased capital under hedge fund management has led to more trading activity and increased commissions for the exchanges. Wall Street has eagerly bought into fresh exchange IPOs for NYSE Euronext (NYSE: NYX) and NYMEX Holdings (NYSE: NMX) within the last year. Navellier, too, is a believer in this trend. He owns rather large positions in InterContinental Exchange (NYSE: ICE) and CME Group (NYSE: CME).

InterContinental is a remarkably interesting stock. The company is focused on the trading of volatile energy and agriculture futures and other products. This leads to above-normal trading activity. These markets have recently shifted towards electronic trading, a move which should increase trading volumes and, therefore, increase sales and earnings for this company. InterContinental is also in the process of acquiring the New York Board of Trade (NYBOT), which should have many benefits for the company. Most importantly, there will be significant synergies between the two companies, presumably allowing InterContinental to increase its margins.

At $130 per share, about double its trading price last year, the stock certainly doesn't look cheap, but when you consider the stock's recent drop from $170 per share, it becomes more interesting. The company is trading for about 25-30x next year's earnings expectations -- an expensive multiple. However, if the NYBOT acquisition is completed successfully and trading volumes continue to increase, who knows what the market will be willing to pay for this company's earnings.

Similarly, shares CME Group have been hit recently. The stock's current price of $540 is about 10% less than its recent high of more than $600 per share. Similar to InterContinental, trading volumes continue to surge. If the company can successfully integrate BOT operations, synergies will likely send shares higher. But, like InterContinental, high expectations for the company remain with shares trading for nearly 30x next year's earnings estimates.

Oil Service Companies

Oil service companies have also become very popular with Wall Street in recent years. Higher oil prices are sending exploration companies on more expensive projects that are economical in today's day and age. Due to huge supply, the oil service companies that perform a wide variety of important tasks at oil fields have been able to increase their prices.

Two of Navellier's favorite stocks in this space are Dawson Geophysical (NYSE: DWSN) and Schlumberger (NYSE: SLB). I recently outlined the bullish arguments behind the stock, most importantly the heightened demand for the company's services due to increased exploration initiatives.

Schlumberger is another interesting oil service company. Unlike Dawson, this company performs oilfield services such as project management, drilling measurements and IT infrastructure services. The stock seems fairly expensive here at 24x earnings with the peer average trading for about 14x earnings, but it's expected to display significant growth into next year unlike its peers Halliburton (NYSE: HAL) and BJ Services (NYSE: BJS).

Navellier's portfolio is loaded with potential investing ideas. By zeroing in on the themes Navellier is clearly playing it's much easier to digest the information, learn and potentially profit from the portfolio.

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Cramer's CME & DJIA, full speed ahead

Jon Ogg — 2007-08-02T19:10:00+00:00

Filed under: Chicago Merc Exch Hld'A' (CME), NYSE Euronext (NYX)

On tonight's Mad Money on CNBC, Jim Cramer talked up his DJIA target of 14,582 at year-end and DJIA components (Cramer did this in batches before with individual targets: A-B group, then some middle names, and another group). He also said he's backing the Chicago Mercantile Exchange, or the CME Group, Inc. (NYSE:CME). He thinks this will benefit hugely from the increased volume and the increased volatility in futures. This is one he thinks that can raise fees because they are so large in market share now that the CME/CBOT merger went through. He even said this may be a secular growth story and even thinks the stock is cheap. The company now has accelerating revenue growth for growth managers, and he thinks estimates could be too low.

Let's hope THIS exchange pick from Cramer does better than his pick of the shares in the New York Stock Exchange, or the NYSE Euronext (NYSE: NYX), which was Cramer's #1 Growth Pick for 2007. This quarter did actually look OK for the NYSE, but at under $75.00 shares are still way off of yearly highs of $112.00. CME has a lot of integration work remaining for the CME/CBOT merger, but after having personally officed in the CBOT Building and spending a lot of time over at the CME Building (and maybe even a few happy hours at each, allegedly) these did create the monster exchange. The combined entity will also force other exchange mergers even if for no other reason than survival or relevance.

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Analyst downgrades 7-11-07: ATVI, CME, HLT and TSM

Kevin Shult — 2007-07-11T10:57:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Bad news, Chicago Merc Exch Hld'A' (CME), Activision Inc (ATVI), Hilton Hotels (HLT)

MOST NOTEWORTHY: Today's noteworthy downgrades involved Hilton Hotels Corp (HLT), TransAlta Corp (TAC), Cascade Corp (CAE), Activison (ATVI) and Atheros Communications (ATHR):

Stifel downgraded Hilton Hotels (NYSE: HLT) to Hold from Buy at Stifel based on the recent acquisition.

TD Newcrest cut TransAlta (NYSE: TAC) to Sell from Hold and doesn't consider an LBO of the company likely.

Rodman cut Cascade (NYSE: CAE) to Market Underperform from Market Perform based on valuation.

Activision (NASDAQ: ATVI) was downgraded to Neutral from Outperform at JP Morgan based on valuation and the competitive environment.

AG Edwards believes Atheros Communications (NASDAQ: ATHR) has a less favorable risk/reward and cut shares to Hold from Buy...

OTHER DOWNGRADES:

Needham downgraded Kyphon (NASDAQ: KYPH) to Buy from Strong Buy.

UBS downgraded Taiwan Semiconductor (NYSE: TSM) to Neutral from Buy.

Deutsche Bank cut Chicago Mercantile Exchange Holdings (NYSE: CME) to Hold from Buy.

Roche Holding Ltd (OTC: RHHBY) was downgraded to Hold from Buy at Citigroup.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

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Friday Option Rap: TGT, CME, DG, CSCO and SLW

Kevin Kersten — 2007-07-06T18:10:00+00:00

Filed under: Major movement, Cisco Systems (CSCO), Target Corp. (TGT), Chicago Merc Exch Hld'A' (CME), Dollar General (DG), Options, Silver Wheaton (SLW)

The markets made mild gains closing out the holiday week on lighter volume. The Dow gained 203 points this week to close at 13611.68 a 1.5% gain for the week.

Target Corporation (NYSE: TGT) moved higher $3.89 (6%) to $68.10 with active options trading on rumors it may shed its credit card business. Silver Wheaton (NYSE: SLW) rose $0.68 (5%) to $13.17 on higher silver prices. Chicago Mercantile Exchange (NYSE: CME) rose $19.11 (3%) to $574.80 after sweetening the CBOT takeover offer.

The NYSE had volume of 2.3 billion shares with 1,971 shares advancing while 1,285 declined for a gain of 49.15 points to close at 1,0075.39. On the NASDAQ, 1.6 billion shares traded, 1,740 advanced and 1,259 declined for a gain of 9.86 to 2,666.51.

Target (NYSE: TGT) saw heavy volume on the July 67.50 calls (TGTGU) with over 20,000 options trading. On the different July strikes there were about 44,000 calls traded while the puts traded only 28,000 contracts. There was an even bigger difference in August where about 20,000 contracts traded on the calls compared to about 4,000 contracts of puts. For all the different strikes on Target there was 30,000 more calls than puts traded for a put/call ratio of 0.62. The purchase of all the calls on target is a bullish sign as investors are betting the stock is going to go up soon. The stock saw 29.8 million shares trade today over 3 times its three months moving average.

Other stocks that had heavy volume include Dollar General (NYSE: DG) which saw heavy volume on the January 15 calls (DGAC) with over 50,200 options trading. Cisco Systems (NASDAQ: CSCO) moved 21,000 contracts on the July 27.50 calls (CYQGY). In options there were 3.3 million puts and 4.4 million calls traded for a put/call open interest ratio of 0.75.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You To Dump A Stock.

Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

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Market highlights for next week: Monthly sales numbers coming

Eric Buscemi — 2007-07-06T16:00:00+00:00

Filed under: Earnings reports, Conventions and conferences, Microsoft (MSFT), Wal-Mart (WMT), Home Depot (HD), Penney (J.C.) (JCP), Alcoa Inc (AA), Chicago Merc Exch Hld'A' (CME), Oracle Corp (ORCL)

Monday July 9

The Chicago Board of Trade (NYSE: BOT) and Chicago Mercantile Exchange Holdings Inc (NYSE: CME) to hold a special shareholder meeting in Chicago about merging at 4pm.
Take-Two Interactive Software (NASDAQ: TTWO) to hold a business update at 4:30pm.
Alcoa Inc (NYSE: AA) to report Q2 earnings; conference call at 5pm.

Tuesday July 10

Electronic Entertainment Expo, or E3, to be held from July 10-July 13 in Santa Monica, California.
The Home Depot Inc (NYSE: HD) to release a 2007 Sales Update at 9am.
Sealy Corporation (NYSE: ZZ) to report Q2 earnings; conference call at 5pm.

Wednesday July 11

Companies reporting monthly sales include Hot Topic Inc (NASDAQ: HOTT) at 4pm; Zumiez Inc (NASDAQ: ZUMZ) at 4pm; and American Eagle Outfitters Inc (NYSE: AEO) at 5pm.
Microsoft Corporation (NASDAQ: MSFT) to hold analyst/investor meeting at 10:30am in Santa Monica, California.
Special Shareholder: Hercules Offshore Inc (NASDAQ: HERO) to hold special shareholder meeting at 10am in Houston regarding the merger with TODCO (NYSE: THE).

Thursday July 12

Companies reporting monthly sales include BeBe Stores Inc (NASDAQ: BEBE) at 7am, Limited Brands Inc (NYSE: LTD) at 7:30, Ann Taylor Stores Corporation (NYSE: ANN) at 8am, Gap Inc (NYSE: GPS) at 8am, JC Penney Co Inc (NYSE: JCP) at 8am and Wal-Mart Stores Inc (NYSE: WMT) at 8am.
Special Shareholder: Agile Software Corporation (NASDAQ: AGIL) to hold special shareholder meeting at 1pm to vote on Oracle Corporation's (NASDAQ: ORCL) impending acquisition of the company.

Friday July 13

Select Comfort Corporation (NASDAQ: SCSS) to hold a business trends update conference call at 4pm.

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CME ups CBOT ante, again

Kevin Shult — 2007-07-06T15:31:00+00:00

Filed under: Before the bell, Deals, Industry, Internet, Competitive strategy, Chicago Merc Exch Hld'A' (CME)

In response to yesterday's threat from the Chicago Board of Trade (NYSE: BOT)'s largest shareholder, Caledonia Investments managing director Will Vicars, the Chicago Mercantile Exchange (NYSE: CME) announced today that it has revised the terms of its definitive merger agreement with CBOT for the third time.

The Chicago Mercantile Exchange will now offer CBOT shareholders 0.375 shares of CME Holdings for each share of CBOT Holdings, compared to the previous offer of 0.350 shares. The newly valued $9.21 billion offer has been approved by the boards of both companies.

With the revised terms from CME, Caledonia Investments, which has a 7% stake in CBOT Holdings, agreed to support the deal.

The offer, however, is still lower than the $10.12 billion bid from Atlanta-based rival Intercontinental Exchange (NYSE: ICE). Intercontinental said it is willing to enter talks regarding potential increases to its proposal, including a higher value for exercise rights and an alternative integration plan.

Looks like third time may be the charm for the CME. The two Chicago exchanges expect to close the deal, pending a shareholder vote on Monday and regulatory approval, sometime this summer.

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Chicago Merc. bid gets support from CBOT management

Brent Archer — 2007-06-26T13:20:00+00:00

Filed under: Deals, Good news, Management, Chicago Merc Exch Hld'A' (CME), Options, Technical Analysis

Chicago Mercantile Exchange Holdings Inc. (NYSE: CME) opened at $533.30. So far today the stock has hit a low of $533.30 and a high of $539.45. As of 10:55, CME is trading at $535.87, up $2.47 (0.5%).

After hitting a one year high of $596.30 in January, the stock has trended slightly downward over the past six months, bouncing off support at $500 in May. Chicago Board of Trade (NYSE: BOT) management is urging shareholders to vote for a merger with CME rather than the competing offer from Intercontinental Exchange (NYSE: ICE). A vote will be held on July 9. Recent technical indicators for CME have been bullish but deteriorating, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $500 range.CME hasn't been below $500 for more than a day since November and has shown support around $508 recently. This trade could be risky if broader markets take a tumble, but CME is not scheduled to report earnings until the week after July expiration.

Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in CME, BOT, or ICE.

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Before the bell 6-15-07: Stock futures rise ahead of CPI

Melly Alazraki — 2007-06-15T07:59:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Intel (INTC), Indices, Advanced Micro Dev (AMD), Chicago Merc Exch Hld'A' (CME), NYSE Euronext (NYX), Economic data

Stock futures point to a higher open at the moment, after being flat earlier in the morning, as stocks may try to finish the week on a positive note, making it a third straight day of gains. Today, the much anticipated CPI will be released as well as several other economic readings.

Yesterday, stocks continued their climb, making it the best two-day advance since July for the Dow industrials. Stocks were buoyed by producer prices released before the start of the session. Core inflation at the wholesale level (excluding food and energy) rose at a moderate pace. In addition, bond yield seemed to have stabilized. Investors fears that the Fed may raise, rather than lower, rates were somewhat alleviated.

Today, investors will be following several economic readings:

Starting with the most anticipated one, the May Consumer Price Index, which will be released at 8:30 a.m. and could change the direction stocks will be moving according to its reading. Economists are expecting the CPI to gain 0.6% after a 0.4% rise in April. Core CPI, which excludes the volatile energy and food prices and which is the Fed's preferred measure, is forecast to rise the same as in April, 0.2%.
Also at 8:30 a.m., the June NY Empire State Index, or the regional manufacturing index, will be released.
At 9:00 a.m., the current account deficit, an indicator that shows trade and investment flows between countries, will be released.
At 9:15 a.m., May Industrial Production and Capacity Utilization will be released. Production is expected to rise 0.2% after a 0.7% gain in April, while capacity should remain unchanged at 81.6%.
Finally at 10:00 a.m., the preliminary June Reuters/University of Michigan reading on June consumer sentiment is also due. Economists forecast the index fell to 88.0 from 88.3 due to gas prices.

While treasury rates continued to rise this morning, overseas stocks marked another day of gains. Asian stocks finished with gains after the Bank of Japan held rates at 0.5% and European stocks are gaining for the third day in a row.

Corporate news:

A day after Intel Corp.(NASDAQ: INTC) shares gained 2.5% following its announcement it was expanding its high-end chip line [subscription], this morning Intel shares are gaining 2% in pre-market trading (7:31 a.m.). Intel was upgraded to Buy from Neutral at Goldman Sachs. The broker said that it is probably Advanced Micro Devices Inc.(NYSE: AMD) may move to an outsourced business model and that this will create significant benefits for Intel.

According to Bloomberg, the New York Mercantile Exchange (NYSE: NMX) is exploring a sale to NYSE Euronext (NYSE: NYX), Deutsche Boerse AG or Chicago Mercantile Exchange Holdings Inc. (NYSE: CME).

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Chicago is tops with traders

Trey Thoelcke — 2007-06-10T10:40:00+00:00

Filed under: Magazines, Employees, Chicago Merc Exch Hld'A' (CME), Commodities

When I worked in Chicago's Loop, I used to see the traders everywhere, with their brightly colored jackets and their enormous badges. Whether in their smoking circles, crowded into the restaurants and bars, or simply scurrying from one place to another, there was a air of frenetic energy about them, and though sometimes looking weary, they always seemed to be having a good time.

Well, as it turns out, Chicago, home of the championship Bulls and Bears, is also the top trading city in the world, according to a survey of traders by Trader Monthly. London, New York, Dubai, and Miami rounded out the top five.

The two largest U.S. futures marts and the largest U.S. options exchange can be found in the Windy City. Trading is "in the city's blood," said the magazine. Just this past week the Chicago Mercantile Exchange (NYSE: CME) had its second-highest volume trading day ever.

Trader Monthly rated cities on several factors, including trading infrastructure, taxes, access to capital, weather, nightlife, and time zone. Especially popular with traders was the real estate market; Chicago is infinitely more affordable than London or New York, the next two runners up.

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What do Whole Foods, Sirius and Borders have in common?

Melly Alazraki — 2007-06-06T11:23:00+00:00

Filed under: Analyst upgrades and downgrades, Deals, Google (GOOG), Wal-Mart (WMT), XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Chicago Merc Exch Hld'A' (CME), Whole Foods Market (WFMI)

What do Whole Foods Market Inc. (NASDAQ: WFMI) and Sirius Satellite Radio Inc. (NASDAQ: SIRI) have in common? What do Wild Oats Markets Inc. (NASDAQ: OATS), Borders Group Inc. (NYSE: BGP) and Google Inc. (NASDAQ: GOOG) have in common? I'll give you a hint -- they all want to merge with some other company in their field. But the mergers are all very different.

Give me a break, one cannot compare the proposed merger between Whole Foods and Wild Oats to that of Sirius and XM Satellite Holdings Inc. (NASDAQ: XMSR). I know many Sirius and XM investors will lash out at me for this, but come on people! Sarah Gilbert made a very good case yesterday why the merger of the trendy food stores doesn't have antitrust issues: "There is a plentiful supply of organic and natural produce and other products available at both small local cooperatives and farmer's markets and large supermarket chains," least of all Wal-Mart Stores Inc. (NYSE: WMT).

Sirius and XM? Now that's a different story altogether. They are the only two satellite radio companies. There are no smaller competitors, or large competitors with a small market share. That's all there is -- Sirius and XM. Sure, the argument that the market includes iPods, internet and HD radios is very creative and may even work, but let's call it what it is -- a desperate attempt by the two companies to get their merger approved. They've even hired a lobbying firm.

Google and DoubleClick? Here I have to admit, despite fearing Google's increasing power and control over data and information, that there shouldn't be antitrust issues. There may need to be other regulations over what Google and other internet companies -- including Microsoft Corp. (NASDAQ:MSFT), Yahoo! Inc. (NASDAQ: YHOO) and Apple Inc. (NASDAQ: AAPL) -- can collect and save, but this has nothing to do with antitrust.

Finally, my favorite industry -- bookstores. Goldman Sachs Group (NYSE: GS) downgraded Borders to Sell from Neutral following the FTC's decision on Whole Foods and Wild Oats. While Borders and rival Barnes & Noble Inc. (NYSE: BKS) haven't agreed on anything yet, the Street was expecting a possible merger. The book superstore industry features two major players, but it isn't without competition and I don't see why there should be resistance to a merger from antitrust regulators.

WSJ blogger Dana Cimilluca also mentions the Chicago Mercantile Exchange Holdings Inc. (NYSE: CME) and the Chicago Board of Trade (NYSE: BOT) merger with possible regulatory problems despite CEO Craig Donohue's confidence.

It will be interesting to see how all this plays out in the final months of the Bush administration.

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Big Man in IPO land

Tom Taulli — 2007-06-01T11:30:00+00:00

Filed under: Citigroup Inc. (C), Chicago Merc Exch Hld'A' (CME), Merrill Lynch (MER)

Man Group (MF Group) got its start over 200 years ago. The founder, James Man, was a broker for commodities and helped to form some of the first futures markets.

As of today, MF Group is a top broker for exchange-listed futures and options. The firm is #1 on the Chicago Mercantile Exchange (NYSE: CME), the Chicago Board of Trade (NYSE: BOT), the New York Mercantile Exchange, Euronext.Liffe and Eurex.

Now, MF Group has filed to go public. And, in light of the tremendous consolidation in the global stock exchange space, this should be a mega offering.

In all, there are 130,000 active client accounts across the globe. And the financials are sterling. For the past year, revenues increased from $946.5 million to $1.37 billion and net income surged from $60.9 million to $151.1 million.

MF Group has also been an active acquirer. For example, the firm purchased client accounts and other assets from the defunct Refco (which imploded in 2005).

The lead underwriters include: Citigroup (NYSE: C), JPMorgan (NYSE: JPM), Lehman Brothers (NYSE: LEH), Merrill Lynch & Co. (NYSE: MER), and UBS Investment Bank (NYSE: UBS). The proposed ticker symbol is "MF."

You can find the IPO filing at the SEC website.

Tom Taulli is the author of various books, including The Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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Before the bell 5-30-07: Stock futures drop after Chinese stocks tumble

Melly Alazraki — 2007-05-30T07:47:00+00:00

Filed under: Before the bell, Major movement, Viacom (VIA), Chicago Merc Exch Hld'A' (CME), Economic data

Stock futures dropped this morning indicating a possible lower start for U.S. stocks after Chinese stocks plunged 6.5% overnight.

Yesterday, stocks got a lift from M&A activity, but today, a sharp sell-off in Chinese stocks could take U.S. stocks down. Chinese stocks plunged after the government tripled the "stamp tax" on stock trades, trying to cool down the booming stock market. The Shanghai Composite Index tumbled 6.5% after hitting a record high on Tuesday. The Shenzhen Composite Index closed with a 7.2% loss. Economists say this shouldn't affect China economy as growth is mostly export driven.

Analysts have been expecting a correction in Chinese stocks due to the sharp price rise. Even Alan Greenspan quipped as much last week. European stocks fell the most in two months as fears this would spark yet another global sell-off similar to the one in late February. But the declines in global markets declined did not reach the same magnitude: The Nikkei 225 closed down 0.5% in Tokyo, the FTSE 100 declined 1.1% in London, Germany's DAX index was down 1.%, and France's CAC-40 was down 0.9%.

Today, investors will also pay attention to the Fed minutes release (at 2 p.m.) after it last kept rates unchanged, stating inflation remained a priority. The minutes could reveal more into policy makers future intention and investors will scrutinize the wording to see any implied intentions.

Oil prices rose today, ahead of U.S. inventory data (10 a.m.). While the report is expected to show an increase in crude and gasoline supplies, geopolitical concerns increased, especially worries about disruptions in Nigeria resurfaced.

Corporate news:

CDW Corp. (NASDAQ: CDWC) said yesterday that it had agreed to be acquired by a private equity company, Chicago's Madison Dearborn Partners LLC, in a $7.3 billion deal. CDW shareholders will receive $87.75 in cash for each share of common stock, which is a 16.1% premium over the company's Friday closing price.

IntercontinentalExchange Inc. (NYSE: ICE) may have helped its hostile bid for CBOT Holdings (NYSE: BOT) by reaching an agreement aimed at resolving a dispute between CBOT and the Chicago Board Options Exchange (NYSE: CME), The Wall Street Journal reported.

Viacom Inc. (NYSE: VIA) agreed to sell its Famous Music publishing business to Sony/ATV Music Publishing for about $370 million, the Wall Street Journal.

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Option update 5-23-07: Option traders adjust positions

Paul Foster — 2007-05-23T14:08:00+00:00

Filed under: Amazon.com (AMZN), Alcoa Inc (AA), Chicago Merc Exch Hld'A' (CME), Options, BHP Billiton Ltd ADR (BHP), Freep't McMoRan Copper (FCX), Aluminum Corp of China ADS (ACH)

NYMEX Holdings-(NYSE-NMX) volatility Flat as Arbs consider Chicago Mercantile Exchange (NYSE: CME) and Intercontinental Exchange (NYSE: ICE) positions after CBOT Holdings (NYSE: BOT). NMX -- an energy and metals marketplace -- has a market cap of $11.58 billion. Arbitrageurs are aware if the CME's bid for the BOT or ICE's bid for BOT does not go through, NMX could be vulnerable to a bid from the losing bidder. NMX overall option implied volatility of 33 is near its 22-week average of 31 according to Track Data, suggesting non-directional risk.

BHP Billiton-(NYSE-BHP) option implied volatility suggests Flat Risk. BHP, the world's largest mining company, has a market cap of $153 billion, is recently up $1.36 to $52.11. BHP has been frequently mentioned during the last 17-months as having an interest in doing a deal with Freeport McMoRan Copper & Gold Inc. (NYSE-FCX), Alcan Inc. (NYSE: AL) and Alcoa Inc. (NYSE: AA). Prudential has an Underweight rating on BHP. BHP overall option implied volatility of 32 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Option volume leaders today are: Amazon.com Inc. (NASDAQ-AMZN), Kraft Foods (NYSE-KFT) and Freeport McMoRan Copper & Gold Inc. (NYSE-FCX).

Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

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