Schaeffer's Option Bytes Features Callaway Golf, Forest Labs, Celestica, Best Buy, and Nokia

Business Wire, Sept 15, 2004

CINCINNATI -- Among the stocks featured in the September 15 edition of Schaeffer's Option Bytes are Callaway Golf (NYSE:ELY), Forest Labs (NYSE:FRX), Celestica (NYSE:CLS), Best Buy (NYSE:BBY), and Nokia (NYSE:NOK).

Schaeffer's Option Bytes are just one of the many free market commentaries written everyday at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. Option Bytes are written throughout every trading day by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU1M&PAGE=1 .

Schaeffer's Option Bytes for Wednesday, September 15, 2004:

Below are just a few of today's Option Bytes. Click here to read all of today's Option Bytes. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

1:17 PM Callaway's Earnings Miss Par

Callaway Golf (NYSE:ELY) shares have dropped slightly more than 13 percent in trading today, following a cut in earnings last night. The golf equipment manufacturer reported that it would miss third-quarter earnings expectations. Originally, ELY had predicted a loss of 37 to 42 cents per share while the Street had forecast a loss of 37 cents per share. The company cited a slowed retail sales pace attributed to poor weather (another company jumping on the weather bandwagon), an inability to predict retailer's reorder level (the amount of product sold out, then reordered), and new-product launch delays in order to re-evaluate the product and different launch strategies. A major brokerage analyst said that it seems ELY has sacrificed 2004 in order to focus on a productive 2005. The stock's Schaeffer's put/call open interest ratio stands at a healthy 1.86, which is higher than 71 percent of the readings taken over the past year.

12:43 PM Puts Pile for Forest Labs

Yesterday, puts traded actively on Forest Labs (NYSE:FRX) , as put volume was 4.1 times its daily average. More than 10,000 contracts crossed the tape, with the most active being the September 45 strike (FHA UI). Nearly 4,000 FHA UI contracts changed hands yesterday. A look at overall option activity on FRX reveals that investors currently hold 21,900 calls compared to 31,900 puts in near-term activity. The resultant Schaeffer's put/call open interest ratio (SOIR) of 1.46 is higher than 96 percent of all readings taken over the past year. Today FRX is trading 12 cents lower to $44.48.

11:05 AM Celestica Cuts Earnings Guidance

Yesterday after the market close, Celestica (NYSE:CLS) lowered its third-quarter earnings guidance. The company now expects earnings of 7-11 cents per share versus its prior estimates of 11-17 cents per share. The company also lowered its revenue range to $2.05-$2.15 billion from prior estimates of $2.25-$2.40 billion. CLS stated that recent order reductions from some large communication and information technology customers hurt its business. The stock also suffered an analyst downgrade in response to the negative earnings revision. A look at option activity shows that investors recently increased their bullish bets on CLS by adding calls at a faster rate than puts. There are 9,400 open calls compared to 4,300 open puts in near-term option activity. CLS has been severely punished in trading today, and at last check the stock was trading $1.98 lower to $12.59.

10:30 AM After Charges, Best Buy Beats Estimates

Best Buy (NYSE:BBY) announced second-quarter earnings of 46 cents per share, after 7 cents per share in one time charges. Analysts were expecting earnings of 51 cents per share, so after charges, the earnings were better than expected. There was a certain degree of pessimism coming into the announcement as reflected by the Schaeffer's put/call open interest ratio (SOIR) and the short-interest ratio. The SOIR is at 1.22, which is higher than 97 percent of the readings taken over the past year. The short-interest ratio is at 3.48, and the number of shares sold short jumped by 10 percent during the most recent reporting period. BBY is up 4.2 percent in early trading.

1:41 PM Optimism Jumps on Nokia

Nokia (NYSE:NOK) has been on the way up recently after sustaining a loss of more than 50 percent between its March high and its August low. This rebound may be short-lived, however, due to extreme optimism on the part of investors. Call-option buying on the part of bullish traders has been quite strong of late, including more than 16,000 contracts of call volume thus far during today's session. NOK now has very large amounts of call open interest at key strike levels, which could cause the shares to struggle over the near future.

The above are just a few of today's Option Bytes. Click here to read all of today's Option Bytes. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

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