Schaeffer's Street Chatter Highlights the Following Stocks: Altria Group, Chico's FAS, and XM Satellite Radio

Business Wire, Nov 4, 2004

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Altria Group (NYSE:MO), Chico's FAS (NYSE:CHS), and XM Satellite Radio (Nasdaq:XMSR). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

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Street Chatter:

1. Altria Group (NYSE:MO) is the parent of Philip Morris, maker of the Marlboro, the world's top-selling cigarette since 1972, according to Hoover's. The company also controls 84 percent of consumer consumable giant Kraft Foods and 36 percent of SABMiller. Speaking before the Morgan Stanley Global Consumer Conference today, MO officials reaffirmed the company's full-year earnings per share guidance of $4.55-$4.60, which will include items. In other news, the company said its tobacco operations are undervalued compared to other segments, so MO is considering splitting Altria into two or three independent units.

This news has sparked notable interest from investors, who have sent the shares nearly eight percent higher today, helping give the Dow Jones Industrial Average (DJIA) a boost in the process. MO has now reached a new seven-month high and has effectively filled in the vast wasteland created by the stock's mid-May plunge. In longer-term news, MO has climbed atop its 10-month moving average.

Options players are out in full force in MO pits today, most prominently at the just-out-of-the-money 55 strike. The November 55 call has seen almost 26,000 contracts trade hands on existing open interest of only 773 contracts. The December 55 call, which is currently home to 13,000 contracts, has seen 36,000 call options trade today. Other popular strikes during Thursday's session include the January 45 and 50 puts, both with more than 30,000 options trading, and the November 50 put. This volume is likely to have a pronounced effect on the security's Schaeffer's put/call open interest ratio (SOIR). Heading into today's trading, the SOIR stood at 1.83, having spiked higher following October options expiration. This reading is higher than 86 percent of the past year's worth of data.

Click the following link to see the Daily Chart of MO Since April 2004 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=11647 .

2. Chico's FAS (NYSE:CHS) is an upscale women's clothier with more than 400 mall-based stores in 41 states and the District of Columbia. Early this morning, CHS reported a 27-percent surge in total October sales, brining figures to a record high of $86.5 million. Same-store sales rose 9.3 percent, topping analysts' estimates of 6.6 percent. In the year-to-date period (through October 30), the apparel retailer's total sales are up 41 percent, while same-store sales have advanced 13 percent.

CHS will step into the earnings dressing room following the market close on Tuesday, November 30. Analysts are currently expecting results of 37 cents per share, a 23-percent rise over last year's figures. During the past five consecutive quarters, CHS has managed to consistently top analysts' expectations, by an average margin of 6.4 percent.

Technically speaking, CHS peaked above its 10-month moving average today thanks to a boost of nearly four percent. Additionally, the stock has stepped back above its 20-week moving average this week after spending the last nine weeks beneath this trendline. The equity's next technical challenge is the 44 level, a short-term high reached in late August.

The equity's SOIR reached an annual low in early October (indicating bullishness, or at least complacency, among options players). Since then, it has been on the rise and now stands at 0.49, in the 31st annual percentile. On other sentiment indicator fronts, despite a five-percent decline in shorted CHS shares last month, short interest still accounts for one-fifth of the stock's available float, at 17.5 million shares, which equates to a short-interest ratio of more than 10 days to cover. Last month's modest decline could be an indication that these bearish players are beginning to head for the hills. This would be a good sign from our contrarian perspective, as a short-covering rally could be in the offing. Wall Street is slightly more positive toward CHS, judging from the 10 "buy" ratings and six "holds."

Click the following link to see the Daily Chart of CHS Since August 2004 With 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=11647 .

3. Investors and market-watchers tuned in to XM Satellite Radio's (Nasdaq:XMSR) third-quarter earnings report today. Revenue at the firm rose 23 percent compared to last quarter and ticked 143 percent higher from year-ago levels to $65.4 million. For the reporting period, the firm narrowed its loss to $118 million, or 59 cents per share, down from a $133.4 million ($1.12 per share) loss last year. Analysts were expecting the firm to swallow losses of 65 cents per share this period. In other positive news, the number of subscribers to the service rose by 75 percent, adding over 415,000 new listeners.