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| Bullish |
AAWW
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| Stock |
Atlas Air Worldwide Holdings, Inc., through its subsidiaries, provides aircraft and outsourced aircraft operating solutions to the air freight industry.
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| Set-up
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Looks for stocks that are in a strong uptrend and have paused for a few days. Yesterday the stock resumed the rally and made a 10-Day high. Today the stock is continuing higher.
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Chart
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This stock has been in a steady climb since finding support at $28 in November. It broke through that resistance in December and after trading in a tight range in January, it has broken out to a new 52-week high. The volume is strong and the stock wants to move higher.
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| Outlook
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Two days ago, the company said that for the quarter ended December 31, 2009, AAWW reported net income of $28.3 million, or $1.17 per diluted share, on pretax earnings of $46.1 million and revenues of $321.6 million. Operating and financial results for the quarter compared with net income of $62.3 million, or $2.97 per diluted share, on pretax earnings of $103.5 million and revenues of $335.0 million for the three months ended December 31, 2008.
For the year ended December 31, 2009, AAWW posted net income of $77.8 million, or $3.56 per diluted share, on pretax earnings of $124.1 million and revenues of $1.062 billion. In 2008, AAWW’s full-year net income totaled $63.7 million, or $2.97 per diluted share, on pretax earnings of $110.2 million and revenues of $1.607 billion.
The stock trades at a forward P/E of 12.
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| Tactic
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“The global scale and scope of our operations positioned us very well to participate in a vigorous commercial charter market during the fourth quarter, especially in the Asia-Pacific region. Low inventory levels and stronger-than-expected holiday demand during the quarter generated yields in our Commercial Charter segment not seen since ports on the U.S. west coast were shut down in the second half of 2002. Peak charter yields were a major contributor to our earnings for the quarter.
“As the leading outsource provider of modern, high-efficiency 747-400 freighter aircraft, we were also positioned to meet a continued high level of military charter demand, including requests to transport mine-resistant, all-terrain vehicles (M-ATVs), and to provide responsive service to our 747-400 ACMI customers, who flew more than five percent above their minimum guaranteed block-hour levels during the fourth quarter.”
This company has a great niche and it increased profits and revenues during one of the toughest years in decades. It has a very strong balance sheet and the guidance was positive.
The stock has been in a steady grind higher and it has broken through $40 resistance on heavy volume. It has been strong relative to the market and I like buying the April $42.50 calls and using $40 as a stop. This stock should keep grinding higher as long as the market does not tank.
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| Stop
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35
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| Earnings
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5/24
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| Bearish |
FLR
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| Stock |
Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction management, and project management services worldwide. Its Oil & Gas segment offers design, engineering, procurement, construction, and project management services to upstream oil and gas production, downstream refining, and integrated petrochemicals industries.
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| Set-up
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Stock opened near its high and is trading near its low on expanded daily range. Stock is trying to reverse recent rally and resume longer-term down trend.
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Chart
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This stock ran up to $48 in August and it has been in a decline ever since. It found support at $40 and it bounce up to $50 in January. The stock has been in a decline the last 3 weeks and today it gapped down on heavy volume. If it breaks below $42, the selling will pick up.
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| Outlook
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Yesterday, the company said its fourth-quarter profit fell 22 percent, as revenue fell, most notably in its oil and gas and global services units.
For the final three months of 2009, the engineering and construction management firm earned $148.7 million, or 82 cents per share, compared with $189.5 million, or $1.03 per share, in the fourth quarter of 2008.
Revenue slipped 10 percent to $5.48 billion, from $6.07 billion the prior year.
Analysts polled by Thomson Reuters, on average, expected profit of 88 cents per share, on revenue of $5.48 billion.
Fluor said revenue in its oil and gas segment dropped 32 percent to $2.5 billion. Revenue also declined in its global services unit, dropping 20 percent to $545.7 million. Its power segment saw revenue slide 32 percent to $299.6 million.
Revenue in its industrial and infrastructure segment jumped 74 percent to $1.54 billion. Its government segment revenue rose 59 percent to $589.6 million.
For the year, profit fell 4 percent to $684.9 million, or $3.75 per share, from $716.1 million, or $3.89 per share, in 2008. Revenue slipped 1 percent to $21.99 billion from $22.33 billion the prior year.
The stock trades at a forward P/E of 12.
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| Tactic
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Yesterday, it said that its fourth-quarter earnings and sales both fell, due in part to weakness in its higher-margin oil and gas unit.
Fluor cut its 2010 profit outlook by about 12 percent to below Wall Street expectations, as orders remain weak and it expects delays in large projects. It now expects to earn between $2.80 to $3.20 per share.
The company did well in industrial and intrustrcture. That division should slow down as stimulus winds down and credit tightens up in coming months. The company sees tough conditions and it is adjusting its forecast.
The stock has been in a steady down trend and it is weak relative to the market. I like the gap down and the test of $42 support. I would buy the April $45 puts on a close below $42. Wait for the breakdown.
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| Stop
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48
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| Earnings
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5/25
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