The sentiment towards shares of Best Buy (BBY, $24.44, up $2.79) seems to change like the wind but the stock is getting a big lift today following news they will be showcasing Samsung’s products in their stores. The store-inside-a-store hasn’t worked for JC Penney (JCP, $14.51, up $0.08) as shares have hit a fresh 52-week low of $14.10 this morning but Wall Street likes this announcement.
We were a little puzzled yesterday when we saw one brokerage firm raise their price target for best Buy from $21 to $36 yesterday and maintained their Buy rating. Shares closed at $21.65 on Wednesday so the upgrade represented a 60% return from current levels. This was a really nice call but we weren’t sure how they were pricing in such a big move.
There does seem to be a turnaround in place with Best Buy’s new management team and margins are improving but the shorts are shocked by today’s 12% pop. We have been watching the April 23 calls (BBY130420C00023000, $1.80, up $1.50) today after they opened at 30 cents but we had no idea they would zoom 500% or we would have tossed some bait out.
The bigger news today could be Facebook’s (FB, $26.58, up $0.33) announcement and while we doubt shares will make a double-digit move they could do well if Wall Street’s likes the company’s new mobile partnership. The devil will be in the details but we are looking for further upside movement as we are long call options. Of course, there could be a sell the news event if analysts yawn at their plans but we like shares at these levels and believe they are undervalued.
If we could pipe-in and say one thing, Facebook should bite the bullet and buy Research In Motion, or Blackberry (BBRY, $15.09, up $0.06) as they are now called. This may or may not help tilt the scales in competing with Google (GOOG, $793.47, down $12.73) but they would have an in-house manufacturer of phones with a solid subscriber base.
The back-and-forth action continues as the market is working on its 10th-straight session of up one day, down the next. The bears are looking for a 2-session win streak but the bulls are fighting back as we await tomorrow’s Nonfarm Payroll report. It would only make sense that the market is mixed as we head into the second half of trading.
The Dow is up a 6-pack to 14,556 while the S&P 500 is higher by 2 points to 1,556. The Nasdaq is lower by 5 points to 3,213 while the Russell 2000 is up a half-point to 919. The bulls would like to clear 920 into the close.
We have more to talk about with our current trades so we have to roll but tomorrow promises to be exciting! Subscribers, check the Members Area for the updates.