Top Stocks

Written by Douglas Estadt

Ash Rust from StockTwits http://twitter.com/ashrust explains an options play he opened today with SanDisk.  Here’s how he played SNDK:

•  Shorted Mar. 19: 31/32 calls
• Shorted the 31 call and bought the 32 (this way he’ll reduce risk significantly)
• Sold the call @ .60 and bought the 32 call at .37

He thinks that it’s not going to go too much further up and at the same time is giving himself another 5-6 % of room. This will pay 30% as long as SNDK closes below 31 on March expiry.

• Bought Mar. 26 puts at .37 (with the puts he is genuinely shorting the stock)

To hear more about Ash on SNDK view the video below

By Ted Reed, TheStreet

Toyota (TM) Chief Executive Akio Toyoda can’t just apologize and accept responsibility for the carmaker's mistakes.

That much is expected when Toyoda and other executives appear at two congressional hearings this week. Toyoda will testify before the House Oversight Committee on Wednesday, but other Toyota executives will attend the Tuesday session of the House Energy and Commerce Committee.

"It's not enough to say he's sorry," says Satish Jayachandran, associate professor of marketing at the University of South Carolina. "In Toyota's case, the issue goes to the root of the car, so they have to show clarity to explain the problem and to address what's being done."

By Jim Woods, InvestorPlace.com

PR firm Public Strategies knows a thing or two about damage control. One of its headline clients in recent years was President George W. Bush, who saw his approval rating stumble to a historic low of 22% during the course of his presidency.

Now, the Texas PR giant has a new client that's as dubious as Dubya ever was -- much-maligned investment bank Goldman Sachs (GS). Record profits and billion-dollar bonuses at the Wall Street firm have really rubbed some folks the wrong way, and the company is concerned that its image problem could cause serious trouble if not addressed.

Sun fails to come up. Water no longer wet.

Wal-Mart (WMT) comparable sales dropped at U.S. stores for the quarter ended Jan. 31. That's the first time ever. Ever. 

Time to add this company to my watch list for a buy some time within the next three months.

If you're looking for thin reeds (see this post), here's another one that says U.S. consumers are feeling better about themselves:

By Lauren Tara LaCapra, TheStreet

New credit-card rules that go into effect today will make the industry less profitable, but also less risky, for the country's largest card lenders and issuers.

Credit cards had become cash cows for big firms like Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM) and Capital One (COF). Credit cards provided $23 billion in fees alone last year, according to the advisory firm R.K. Hammer, and also have higher interest rates than most other types of consumer debt.

Those penalty fees soared 21% from 2008 while the average interest rate has climbed 2 percentage points during the past six months to 14%, according to CreditCards.com. Customers with the worst credit have been hit the hardest, with their average rate surging to 24.86% from 14.29% over the same period of time.

By Jason Notte, TheStreet

Netflix (NFLX) is pushing the envelope it wants to escape, but the company's strictly digital future faces a very long wait.

Netflix's deal for new releases and streaming content with Warner Bros. announced in January, expansion of streaming service to all three major gaming consoles by spring and growth amid the misfortunes of its disc-renting counterparts all coincided with an 81% hike in Netflix shares during the past year. Netflix's earnings last quarter were just as rosy, as $444.5 million in revenue brought its 2009 take to $1.9 billion, or 22% more than 2008, and 1 million more subscribers swelled Netflix's ranks to 12.3 million.

Netflix, which aims to boost net income as much as 18% this year, is slowly moving away from its DVDs-by-mail business model that was a huge innovation when it was launched a decade ago. However, Netflix faces stiff competition in streaming content from cable providers Comcast (CMCSA) and Time Warner Cable (TWC), which are looking for new ways to wrest money from millions of subscribers.

By Jim Cramer, TheStreet

You always need to fret when the S&P 500's proprietary oscillator breaches five, and when it soared to six and change after Friday's session I marveled that it could have gotten there so fast. Of course, a couple of weeks when the S&P roars 3% will do it every time, especially when a lot of it came when no one expected it.

But how worried should we be? Now that we have seen the fourth quarter of so many companies -- a quarter that got stronger throughout the market -- it's not clear that the worry includes more than a fear that a 15 multiple on future earnings might go to 14, with 13 always a possibility but not a likelihood when you consider that so many estimates are based on the economy continuing to stumble along both here and in Europe, the latter being a source of weakness for just about every company.

What really struck me, though, is how low the multiple is for so much of tech. Hewlett-Packard (HPQ) had one of the best quarters out there and it is selling for 11 times earnings, for heaven's sake. What is that all about? With more than $2.5 billion in stock bought back and a positive outlook for so many of the company's businesses, I find that multiple unfathomable. But Intel (INTC) and IBM (IBM) have very similar multiples and these companies are throwing off cash and coming off remarkable quarters too.

It is hard not to be cynical regarding the Tiger Woods saga, but the golf king’s recent press conference included subtle insight that investors can use to beat the market.

Perhaps this story is worth watching after all.

Tiger’s misdeeds are the latest in a long line of boorish celebrity behavior followed by the obligatory public apology. It really is an old story.

So too is Tiger’s solution.

After the market closed on Thursday, the Federal Reserve increased the discount rate by 25 basis points. The nominal move may be the beginning of the end of the easy money policy that has been used to lift the U.S. economy out of recession.

Let’s not get too excited about what the central bank is now saying is merely a technical move. While all expect rates to rise eventually the timing of real increases in rates is still far down the road.

Interest rates even with Thursday’s move are still essentially zero and the yield curve remains quite steep. (10 stocks benefiting from a steep yield curve)

Such an environment has been quite the challenge for those investors needing income from investments for retirement living expenses. Bank CD’s and Treasuries simply won’t cut it.

What does cut it in this environment? Dividend stocks are clearly the big winners.

A federal deficit crisis is looming, unemployment remains high, and the Federal Reserve has increased one of its key interest rates. But, while concerns linger about the economy, the investment gurus I keep an eye on have been sounding bullish on stocks over the past week.

Most notable among the top strategists who spoke out was mutual fund legend Peter Lynch, one of the investors upon whom I base my Guru Strategy computer models. Lynch, who retired as manager of Fidelity's Magellan fund in the early 90s after producing one of the best track records of all time, doesn't give a lot of interviews these days. But this week he opened up for the Israeli publication Globes, and he said that the so-called "lost decade" for stocks hasn't soured his view of stocks.

• Check out my Buffett-inspired Top Stocks Tracking portfolio at Wall Street Survivor

"The significance of the lost decade is very simple,” Lynch said. “Companies earn more than they did ten years ago, and they are traded at lower prices than they were then. There’s an investment opportunity here. There are companies on the market with good balance sheets and wonderful reputations, that make better profits today than ten years ago, and will continue to grow. This is an extraordinary period for investment.”

Disney (DIS) coughed up $4 billion to buy Marvel last August, but all it may get for its investment is a collection of second- and third-tier superheroes. 



• See slideshow: Marvel Heroes Coming to a Theater Near You

That leaves the likes of Nick Fury, Big Bertha and Ant-Man.