FOX Translator
No data currently available.
No data currently available.
You're at a fruit market. But, instead of just being able to buy apples at this fruit market, you can also sell fruit.
You're not a farmer, so you come to the market to buy some apples and you see two fruit stands. Fruit Stand A on the left
is buying and selling apples at 50 cents apiece. However, Fruit Stand B on the right is buying and selling apples at 53 cents
apiece. People are buying and selling apples at these two stands all the time, and the price at a stand could change at any
moment. But, while you're there, apples are 50 cents and 53 cents, respectively.
You're a smart person, and you quickly
realize that you can buy apples from Stand A and then sell them across the street to Stand B and make a 3-cent profit. But
you have to do it now; you can't wait. So you buy all the apples at Stand A and then run to sell them all to Stand B.
Congratulations.
You've committed fruit-stand arbitrage.
Arbitrage is exactly that: the selling of the same item between two different
markets to make a profit off the mathematical differences in price. However, it's not apples that are traded--the goods in
question are usually stocks, currencies and other securities. Arbitrage happens when you get a stock, usually a common one
like General Electric that's traded on multiple markets (Japan, Hong Kong, U.S., etc¿). The stock is usually worth within
fractions of a penny the same on each of those markets. However, there are often some minor variations.
People who
participate in arbitrage take advantage of these variations--and make a ton of money doing it. As seen in the fruit stand
example, you can make a "riskless profit" from buying and selling apples between different markets.
There are some
big hedge funds that make almost all their money off arbitrage. But, despite this simple example, arbitrage is mathematically
complex--and involves a good portion of risk if you don't know what you're doing. You probably won't be able to participate
in arbitrage directly, but you can always invest in a mutual fund that does.
Home / Markets / Industries / Energy
Tuesday, July 08, 2008
Zacks Analyst Blog Highlights: NVIDIA Corp, Sunoco Logistics Partners, L.P., ExxonMobil Corp., Spectranetics Corp. and Medtronic Inc.
Comtex
CHICAGO, Jul 08, 2008 (BUSINESS WIRE) ----Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA Corp. (Nasdaq: NVDA), Sunoco Logistics Partners, L.P. (NYSE: SXL), ExxonMobil Corp. (NYSE: XOM), Spectranetics Corp. (Nasdaq: SPNC) and Medtronic (NYSE: MDT).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579
Here are highlights from Monday's Analyst Blog:
Expect Margin Pressure for NVIDIA
Product-related issues for NVIDIA Corp (Nasdaq: NVDA) such as the transition from the G80 to G92 series and the recently discovered failure of certain notebook products will pressure gross margins, which we believe will continue for few quarters. We therefore maintain a Hold rating on the shares.
To remain competitive, NVIDIA has invested heavily in research and development, which increased 25.0% in fiscal 2008 and 38.2% in the first quarter of fiscal 2009, and may require more investment, which could further dampen margins. In addition, NVIDIA faces risks associated with international operations as nearly 92% of fiscal 2008 revenue has been from businesses outside the U.S.
Sunoco Logistics' Limited Upside
We are maintaining our Hold recommendation on Sunoco Logistics Partners, L.P. (NYSE: SXL) units ahead of the partnership's second-quarter results. The partnership's last quarterly results were strong and were accompanied by an 8.5% year-over-year increase in quarterly distribution to the annualized rate of $3.58 per unit.
In April, Sunoco bought a refined products pipeline system in Texas and other related assets from ExxonMobil Corp. (NYSE: XOM) for roughly $200 million. The transaction is expected to be immediately accretive to the partnership's cash distribution.
Growing Spectranetics a Hold
Spectranetics Corporation (Nasdaq: SPNC) acquired the endovascular business of Kensey Nash and launched a new Lead Locking Device. SPNC also announced the settlement of intellectual property dispute with Medtronic Inc. (NYSE: MDT).
At its current price of $9.72 per share, SPNC is trading at 3.1x our current fiscal year revenue estimate of $106 million, which is at a discount to the group average multiple of roughly 3.5x. We believe the stock is fairly valued at 3.5x our 2008 revenue estimate. Our target price is therefore $11.00.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE: Zacks.com
Zacks.com Mark Vickery Web Content Editor 312-265-9380 Visit: www.zacks.com
Copyright Business Wire 2008 ********************************************************************** As of Friday, 07-04-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an UPTREND on 05-22-2008 for MDT @ $50.75. As of Friday, 07-04-2008 23:59, the latest Comtex SmarTrend Alert, an automated pattern recognition system, indicated an UPTREND on 04-24-2008 for SPNC @ $10.10. As of Friday, 07-04-2008 23:59, the latest Comtex SmarTrend Alert, an automated pattern recognition system, indicated a DOWNTREND on 06-24-2008 for SXL @ $48.53. For more information on SmarTrend, contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.
Market Snapshot
| Symbol | Last Price | Netchange | Volume |
|---|---|---|---|
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
