Daily Stock Pick of the Day - Aug 24, 2010

Stocks chopped around today, mostly in mixed trade on low volume.  The Down gained .2%, the S&P gained .3% and the tech-heavy NASDAQ fell .3%. 

Traders seem to be excited about some of the recent M&A activity.  I can't help but think it's an ominous sign for current employees of the merging companies.  Any time two companies come together, it means potential layoffs because there is redundancy in many positions.  The latest news in this space is Hewlett Packard's offer for 3Par, a data storage firm.  The HPQ bid is for $24/share which is about 30% better than an offer Dell has already made.  We'll have to staty tuned.  Certainly, 3Par will be a fine addition to either company because the storage market represents a solid opportunity to book some income and profits. 

The stock I'm looking at today is Coinstar (CSTR).  It traded today between $46.83 and $50 and closed today $47.38, up .4%.  It's currently trading just above it's 50-day moving average and well above it's 200-day.  It looks like it's been pulling back a bit for the last four trading days and perhaps it has found support here close to the 50-day MA.  I like CSTR at it's current price, but given the wobbly nature of this market, I'd wait for it to bounce off it's 50-day support before staking a claim. 

Coinstar operates the self-service coin-counting machines you see in supermarkets and other retail outlets.  Now, they're getting into the DVD rental business, going head-to-head with Blockbuster.  The Redbox DVD unit is adding a boost to their revenue base.  Actually, Barron's says they've now grown into the no. 2 renter behind Netflix.  They recently began renting Blu-ray discs and say that all 23,000 of the Redbox kiosks will have Blue-ray selections by the fall.

As always, your comments, thoughts and suggestions are always welcome
Happy Trading!


Obligatory disclaimer: This blog is for information only. Past results do not guarantee future performance. All financial decisions involve risk and there are no guarantees. The suggestions above are for informational purposes only and the blogger is not liable for any losses incurred as a result of actual investment activity on the part of the reader.