After hitting a one-year high of $36.70 in May, the stock hit a one-year low of $17.07 in January. VCLK opened this morning at $23.41. So far today the stock has hit a low of $22.35 and a high of $23.44. As of 10:45, VCLK is trading at $22.99, up $1.31 (6.0%). The chart for VCLK looks bullish but deteriorating slightly, 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 a March bull-put credit spread below the $20 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 13.6% return in just five weeks as long as VCLK is above $20 at March expiration. ValuClick would have to fall by more than 13% before we would start to lose money. Learn more about this type of trade here.
VCLK hasn't been below $20 by more than a few cents in the past year and has shown support around $20.75 recently. This trade could be risky if the US economy continues to worsen, but even if that happens, this position could be protected by the support the stock might find right at $20, where it has bounced a few times in the past quarter.
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 VCLK.
MOST NOTEWORTHY: Valueclick, The Medicines Co and British Sky Broadcasting were today's noteworthy upgrades:
Oppenheimer upgraded shares of Valueclick (NASDAQ:VCLK) to Outperform from Perform following the company's Q4 upside, as they believe the FTC investigation completed with no material penalties and that lead generation is stabilizing.
Citigroup upgraded shares of The Medicines Co (NASDAQ:MDCO) to Buy from Hold following the solid Q4 results to reflect a better risk/reward profile and stabilizing PCI volume.
Goldman raised its rating on British Sky Broadcasting (NYSE:BSY) to Buy from Sell and added shares to their Conviction Sell List as they see above-average upside at tough valuations.
OTHER UPGRADES:
Goldman upgraded the U.S. Trucking Sector to Attractive from Cautious, also upgraded YRC Worldwide (NASDAQ:YRCW) and Arkansas Best (NASDAQ:ABFS) to Neutral from Sell.
ING upgraded Novartis (NYSE:NVS) to Buy from Hold.
The U.S economy may be in for a period of sluggishness (we hope it's just cyclical sluggishness), but the internet continues its growth ramp, and with this in mind, ValueClick is worth an evaluation
ValueClick (NASDAQ: VCLK) is one of the world's largest and most diversified online marketing services companies. Analysts see 2008 revenue increasing 15-20% following a likely 15-17% rise in 2007, as the internet continues to grab an increasing share of marketing budgets. Analysts also expect VCLK to add to its corporate customer base.
Meanwhile, the company's revenue mix remains favorable, and operating margins appear to have bottomed in 2007. Further, there's ample room for VCLK to broaden its international footprint. The Reuters F2007/F2008 EPS consensus estimates for VCLK are $0.71/$0.83.
I was doing some research work and surfing on the great tech blog, TechCrunch, when an article caught my eye. (Actually, I use techmeme to search for important tech stories and came across the aforementioned article -- but, that's not important right now.)
The article was about a $20 million infusion by the Carlyle Group and H.I.G. Ventures in a Southern California-based company named REVShare. Your friend and mine, Google (NASDAQ: GOOG), has made a push into Cost-Per-Action (CPA) advertising. CPA advertising is the holy grail for advertisers, because the advertiser only pays when an action he defines (like purchasing a product) occurs. This has long been a mainstay of internet advertising, as it's relatively easy to gauge such metrics. Commission Junction, part of ValueClick, (NASDAQ: VCLK) has been making a living at this for a long time (in relative web years). Television, on the other hand, has always been a slippery bugger.
MOST NOTEWORTHY: Antofagasta plc, Merrill Lynch, Valueclick, Telmex and Network Appliance were today's noteworthy upgrades:
UBS upgraded shares of Antofagasta (OTC: ANFGY) to Neutral from Sell as they see a strong possibility of delays to copper supply due to an earthquake on Nov. 14 in northern Chile.
Credit Suisse is positive on the appointment of John Thain as Merrill Lynch (NYSE: MER)'s CEO and his ability to get the company back on track strategically. The firm upgraded shares of Merrill to Outperform from Neutral.
Valueclick (NASDAQ: VCLK) was upgraded to Buy from Hold at Citigroup on valuation, as they believe the recent sell-off provides a great entry point.
Citigroup also raised its rating on Telmex (NYSE: TMX) to Buy from Hold after the company announced the spin-off of its international businesses.
Bear Stearns upgraded Network Appliance (NASDAQ: NTAP) to Peer Perform from Underperform following its Q2 report and increased outlook.
OTHER UPGRADES:
RBC Capital upgraded Sciele Pharma (NASDAQ: SCRX) to Sector Perform from Underperform.
Lehman upgraded Amgen (NASDAQ: AMGN) to Overweight from Equal Weight.
W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Market Perform at Morgan Keegan.
Merrill Lynch upgraded Weyerhaeuser (NYSE: WY) to Buy from Neutral.
MOST NOTEWORTHY: Texas Instruments, Check Point, Mobile Mini, Vineyard National Bancorp and TorreyPines were today's noteworthy downgrades:
Jefferies downgraded shares of Texas Instruments (NYSE: TXN) to Hold from Buy, as they believe the company's fundamentals are weakening given the worse than anticipated share losses in the wireless segment. Shares were also lowered to Neutral from Overweight at JP Morgan, to Equal Weight from Overweight at Lehman, to Neutral from Outperform at Credit Suisse, and to Neutral from Buy at UBS to reflect the slowdown in the company's wireless growth.
Check Point Software (NASDAQ: CHKP) was downgraded to Hold from Buy at Jefferies on valuation and highlights the difficult spending environment in 1H08 as well as the company's tough comps.
Deutsche Bank downgraded shares of Mobile Mini (NASDAQ: MINI) to Hold from Buy following the company's negative preannouncement.
Oppenheimer lowered Vineyard National Bancorp (NASDAQ: VNBC) to Neutral from Buy to reflect slower pace of balance sheet growth and lower gain-on-sale income estimates.
JMP Securities downgraded TorreyPines (NASDAQ: TPTX) to Market Outperform from Strong Buy and said Tezampanel's lack of dose response and statistically significant pain free response will keep the stock in the "show me" category.
MOST NOTEWORTHY: The software sector, Ericsson, Paccar, Eni SpA and Valueclick were today's noteworthy downgrades:
Bear Stearns downgraded the software sector to Underweight from Market Weight, citing valuations and increased risk to 2008 IT budgets.
Ericsson (NASDAQ: ERIC) was downgraded to Equal Weight from Overweight at Lehman and to Neutral from Overweight at JP Morgan following the company's Q3 profit warning.
Paccar (NASDAQ: PCAR) was downgraded to Underperform from Market Perform at Wachovia. The firm believes Street estimates are too high due to weaker-than-expected North American unit production.
ABN Amro downgraded shares of Eni SpA (NYSE: E) to Sell from Hold as they expect the company to invest significantly more in its upstream activities than guidance suggests due to cost pressures.
Oppenheimer downgraded ValueClick (NASDAQ: VCLK) to Neutral from Buy following the Q3 pre-announcement and guidance.
I almost forgot to mention skyrocketing oil prices that seem headed to $100 per barrel and beyond, which helped push up the big oil companies including ExxonMobil Corp. (NYSE: XOM).
Ericsson (NASDAQ: ERIC), a Swedish telecommunications and data communications systems and services, is recently down $11.98 to $28.95 in pre-open trading after announcing third-quarter net income fell 36% compared to a year ago on lower demand for network equipment.
Oppenheimer says: "The announcement is somewhat surprising given the company's upbeat comments at a technology analyst day on September 11."
ERIC over all option implied volatility of 34 is near is 26-week average of 33 according to Track Data, suggesting non-directional price risk.
ValueClick (NASDAQ: VCLK), an online marketing services company, is recently down $4.43 to $23.40 in pre-open trading after lowering third-quarter revenue and gross margin guidance.
VCLK over all option implied volatility of 72 is above its 26-week average of 53 according to Track Data, suggesting larger risks.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Chase Norlin has spent over a decade in the online space. For example, he was a senior business development executive at ValueClick (NASDAQ: VCLK). He also served as an executive at InfoSpace (NASDAQ: INSP). Oh, and he also helped to create Sony's (NYSE: SNE) first online photo sharing service.
His latest gig: Pixsy. It's a fast-growing company in the online video space.
Well, this week, I had a chance to catch up with Chase.
Q: How are things at Pixsy?
A: Image and Video Search are the fastest growing consumer search verticals on the web. In fact, Image Search is 10% of Google's (NASDAQ: GOOG) traffic and grows 100% every year. We said early on, "if image and video search are so popular, why doesn't every website have it?" And that's the driving growth behind our business. Pixsy is unique in that we can provide image and video search to a website, under their brand, with content tailored to that specific vertical, and enable that site to have their media searched or combined with the Pixsy index. All of this provides great value to publishers: new search traffic, users stay on the site longer, new content tailored to that site, and new ad inventory is created. Additionally, the service provides great value to content providers as they receive free, targeted traffic from users performing image and video search queries. We now have a backlog of 8,000 providers trying to get content into the Pixsy index as a result.
Bernstein also upgraded shares of BP PLC (NYSE: BP) and BG Group (NYSE: BRG) to Outperform from Market Perform.
Check Point Software Technologies (NASDAQ: CHKP) was upgraded to Outperform from Market Perform at Friedman Billings, citing checks that indicate a strong product cycle for the company's beefed up VPN/firewall product portfolio.
ValueClick (NASDAQ: VCLK) was upgraded at Citigroup to Buy from Hold on valuation, as they believe the recent correction provides a compelling entry point.
MOST NOTEWORTHY: Websense (WBSN), OSI Pharma (OSIP), Gap (GPS), Tiffany & Co (TIF) and Callaway Golf (ELY) were today's more noteworthy upgrades:
Jefferies upgraded Websense (NASDAQ: WBSN) to Hold from Underperform to reflect the strong recent results from SurfControl as well as the possibility for 2H software seasonality.
Lehman upgraded shares of OSI Pharma (NASDAQ: OSIP) to Overweight from Underweight on valuation as well as expectations for price increases and growth in Europe.
Susquehanna upgraded shares of Gap (NYSE: GPS) to Positive from Neutral citing management's ability to control costs & manage inventories, share buybacks, and streamlining of organizational structure.
Tiffany & Co (NYSE: TIF) was upgrade to Accumulate from Neutral at Buckingham based on valuation and strong worldwide luxury trends outside of Japan.
Matrix upgraded shares of Callaway Golf (NYSE: ELY) to Strong Buy from Hold to reflect positive fundamentals and the recent share weakness...
OTHER UPGRADES:
Valueclick (NASDAQ: VCLK) was upgraded to Buy from Hold at Needham.
WestLB raised Swisscom (NYSE: SCM) to Add from Hold and Ericsson (NASDAQ: ERIC) to Buy from Hold.
MOST NOTEWORTHY: Nordstrom (JWN), Monster Worldwide (MNST), Lockheed Martin (LMT) and the U.S. Financials markets were today's noteworthy upgrades:
Piper upgraded shares of Nordstrom (NYSE: JWN) to Outperform from Market Perform, citing valuation, and expects the company to have an upbeat tone on Thursday's quarterly report.
Wachovia upgraded shares of Monster Worldwide (NASDAQ: MNST) to Outperform from Market Perform based on valuation and strength in its international business. The firm believes North American weakness is largely confined to the e-commerce channel while enterprise growth is ongoing and international business remains strong.
Banc of America upgraded Lockheed Martin (NYSE: LMT) to Buy from Neutral on valuation.
Deutsche Bank upgraded JP Morgan (NYSE: JPM) to Buy from Hold and U.S. Bancorp (NYSE: USB) & Comerica (NYSE: CMA) to Hold from Sell. The firm said JPMorgan's financial conglomerate structure gives it strength to gain share in times of stress. U.S. Bancorp was upgraded based on valuation and okay credit quality. Comerica was upgraded based on valuation and upcoming HQ move to Texas, which could make it a takeover target...
OTHER UPGRADES:
JP Morgan upgraded Valueclick (NASDAQ: VCLK) to Overweight from Neutral.
Bear Stearns upgraded BEA Systems (NASDAQ: BEAS) to Outperform from Peer Perform.
Accoona is a bit of an eclectic company (and I have no clue what the company name means). There are three different online business segments: ExchangePlace (allows for bidding on product and service offerings for consumers); an artificial intelligence search engine (which is in the US, Europe and China); and six retail websites.
In a way, Accoona is like a conglomerate – something like ValueClick Inc. (NASDAQ: VCLK). Although, in light of the recent M&A activity, companies like Google (NASDAQ: GOOG) have the same feel.
Although it looks like a big priority at Accoona is the China market. To this end, the company has an alliance with the China Daily Information Company (which owns 6.9% of Accoona's outstanding shares).
From 2005 to 2006, Accoona's revenues have gone from $77.9 million to $149.2 million. And in Q1 of this year, revenues were $37.5 million. But the company is still losing money.
The lead underwriter on the deal is boutique investment bank Maxim Group and the proposed ticker is "ACNA."
The prospectus is on the SEC website. Also, if you want to check out more recent IPO filings, click here. Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
Friedman Billings believes Symantec's (NASDAQ: SYMC) fundamentals are about to show significant improvement over the next year and upgraded shares to Outperform from Market Perform.
JP Morgan raised OfficeMax (NYSE: OMX) shares to Overweight from Neutral on valuation.
Qwest (NYSE: Q) was upgraded to Sector Outperformer from Sector Performer, expecting revenue growth to be driven by the improving enterprise business. JP Morgan added Qwest to its Focus List.
Metlife (NYSE: MET) was upgraded to Buy from Neutral at Merrill, based on valuation...
OTHER UPGRADES:
ValueClick (NASDAQ: VCLK) was upgraded to Sector Perform from Underperform at Pacific Crest.
Penn West (NYSE: PWE) was upgraded to Sector Perform from Underperform at RBC Capital.
Friedman Billings upgraded Cubic (AMEX: CUB) to Market Perform from Underperform.
Morgan Stanley upgraded shares of Jones Apparel (NYSE: JNY) to Equal Weight from Underweight.
Broadcom (NASDAQ: BRCM) was raised to Sector Outperformer from Sector Performer at CIBC.
ValueClick Inc. (NASDAQ: VCLK) shares are trading higher this morning after analysts from Robert W. Baird and Oppenheimer upgraded the stock to "Outperform" from "Neutral" and "Outperform" from "Perform," respectively. VCLK disclosed yesterday that it will pay the Federal Trade Commission $2.9 million to settle a dispute over its lead-generation practices. Both firms raised their ratings afterwards, believing that with the investigation behind it, VCLK can focus on growing the lead-generation business to get back on track. If you think that the company 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 VCLK..gif){kind=logo}
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Manic Monday meet Twisted Tuesday.
Ericsson
Chase Norlin has spent over a decade in the online space. For example, he was a senior business development executive at .gif){kind=logo}
Accoona is a bit of an eclectic company (and I have no clue what the company name means). There are three different online business segments: ExchangePlace (allows for bidding on product and service offerings for consumers); an artificial intelligence search engine (which is in the US, Europe and China); and six retail websites.
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