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Software industry

Market Update: Key Insights from Schaeffer's Market Blog

Strategic Insights

— 1 min read

On June 15, 2006, the Schaeffer's Market Blog featured updates on several key stocks, including Adobe Systems, General Mills, BMC Software, Yahoo!, and Microsoft. The blog provides quick insights into notable market activity from an options perspective.

Key Takeaways:

  • Microsoft (NASDAQ:MSFT) announced that Bill Gates would transition out of his daily role at the company, leading to a 0.5% decline in after-hours trading. Gates will continue to serve as chairman and advisor on key development projects after 2008.
  • Adobe Systems (NASDAQ:ADBE) lowered its 2006 earnings estimate to $1.20-$1.25 per share, down from $1.26-$1.30 per share, due to revenue missing consensus estimates. The stock initially plunged 1% in after-hours trading but bounced back to breakeven.
  • General Mills (NYSE:GIS) announced that it would top its fiscal 2006 profit target due to tax benefits and above-target operating performance. The firm now estimates earnings for the year at $2.90 per share, up from $2.80-$2.85.
  • BMC Software (NYSE:BMC) revised its fourth-quarter earnings estimate lower to 24 cents per share from 35 cents per share. Despite this, the stock managed to post a gain, rising nearly 2%.
  • Yahoo! (NASDAQ:YHOO) saw heavy call option activity, with more than twice as many calls being traded as puts both yesterday and today. The analysts like this stock, with 21 "buy" ratings, four "hold" ratings, and zero "sell" ratings.

Statistics:

  • Microsoft (NASDAQ:MSFT) declined 0.5% in after-hours trading following Bill Gates' transition announcement.
  • Adobe Systems (NASDAQ:ADBE) reported a net profit of $123.1 million, or 20 cents per share, in its second-quarter earnings statement.
  • General Mills (NYSE:GIS) estimated earnings for the year at $2.90 per share, up from $2.80-$2.85.
  • BMC Software (NYSE:BMC) had a short-interest ratio of over eight days to cover, while 10 of the 11 analysts covering the shares rated them a "hold" or worse.
  • Yahoo! (NASDAQ:YHOO) had 21 "buy" ratings, four "hold" ratings, and zero "sell" ratings from analysts.

Sources:

  • Schaeffer's Market Blog, June 15, 2006
  • http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB12M&PAGE=1
  • http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1
  • http://www.SchaeffersResearch.com/method
  • Forbes and Barron's citations of Schaeffer's Research as a leading information source for stock and options traders.

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