THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION
DISCUSSED DURING HAWKTRADE MEETINGS. Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that
investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make
money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any
responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

State of the Union

Market Recap/ Earnings Results

Retail Sales Numbers

Options 101: Buying a call/put

A balanced approach to deficit reduction that includes
reforming tax code, closing loopholes, and Medicare
reforms.

A boost of manufacturing in America, called for greater
investments in housing, infrastructure, alternative energy,
scientific research, and technology.

Comprehensive immigration reform

34,000 U.S. troops withdrawn from Afghanistan by the
end of 2013

Modest gun control measures to reduce violence.

Raising minimum wage 27% to $9/hr.

60% of job losses since recession have been mid-wage positions,
58% of growth has been low-paying jobs

Min. wage is below living wage:
 $15,080 annually.
 poverty threshold for a single individual was $11,702 and the
poverty threshold for a family of 4 with two children under 18
was $22,881.

More consumer spending
 +$1 to min. wage=$2,800 additional spending for household
yearly
 Upping min. wage to $9.50=$60 billion over 2 years

Increased earnings for those above min. wage

Company’s can’t afford to hire as many workers as
before at the lower level so they either hire less
people or pass the costs on the consumers and raise
prices.
 Leaves min. wage worker in same situation.

Lower incentives to move up: Increasing the
likelihood and duration of unemployment for lowwage workers, particularly during economic
downturns.
Would raising minimum wage to $9 an
hour help or hurt our economy?
Markets Pause after rally,
end week flat
14,091
13,981

Definition:
Retail sales measure
the total receipts at
stores that sell
merchandise and
related services to final
consumers. Sales are by
retail and food services
stores.

Why is this important?
-Consumer spending typically accounts for
about two-thirds of GDP and is therefore a key
element in economic growth.
STRENGTHS
WEAKNESSES

Gasoline sales up 0.2%

Misc. store retailers down
2.6%

General merchandise up
1.1%

Health and personal care
down 1%

Clothing and accessories
down 0.3%


Nonstore retailers up 0.9%
Bldn. Material and garden
supplies 0.3%

Retail numbers were generally positive which means
that the size of the economy grew.

The small numbers indicate that sales grew marginally
compared to prior months.

Clearly the pace of spending slowed in January.
However, it is hard to discern the impact of higher
taxes given that January came off a strong December.

Pullback is normal after a strong month. It is going to
take additional reports to determine the impact of
higher payroll and income taxes on retail sales.

Follow @Hawktrade on
twitter

Go to Bloomberg
Economic calendar and
look at estimates for next
weeks CPI number.

Starting at 8AM tomorrow
morning, tweet your guess
for either CPI/ or CPI less
food and energy.

Winner gets $15 Starbucks
gift card next meeting.
TOP LINE NUMBER
BOTTOM LINE NUMBER

Bottom line = Net Income

Only indicates how effective a
company is at generating sales
Accounts for a company's income
after all expenses have been
deducted from revenues.

A company's bottom line can also be
referred to as net profits.

Doesn’t account for any costs.


Determines how fast a
company is “growing”
Bottom line describes how efficient a
company is with its spending and
operating costs

E.P.S.= Net Income-Dividends
# Shares outstanding


Top Line = Gross Sales or
Revenue
Reporting
Company
Surprise
Type
Actual EPS
Expected
EPS
Stock
Reaction
Coca-Cola (KO)
Positive
+$0.45
+$0.44
Down -2.5%
PepsiCo (PEP)
Positive
+$1.06
+$1.05
Up 1.5%
Snapple Group
Inc. (DPS)
Negative
+$0.82
+$0.85
Down 6.5%
McGraw Hill
(MHP)
Neutral
+$0.72
+0.72
Up 1.8%
DIRECTV
(DTV)
Positive
+$1.55
+$1.13
Up 2.7% open
Down 2.9% close
Zipcar (ZIP)
Positive
+$.34
+$.06
Down .08%

E.P.S. slightly beat estimates

Revenue slightly higher than expected, 5% organic
revenue growth.

EPS growth in 13’ expected to be 7% due to
increased prices and higher worldwide sales.

Raised its dividend to $2.27 per share from $2.15.

Reported earnings on Tuesday

EPS of $.72 in line with analyst’s estimates

Revenue ($1.23 billion) did not meet 4th
quarter expectations

Stock ($44.95) movement was limited based
off earnings, no surprises

Parent of credit rating agency Standard &
Poor’s Corp.

Facing a $5 Billion fraud lawsuit by the U.S.
government

Claiming S&P gave too high of ratings to
mortgage investments during the 2008
Financial crisis
Down 22.95% since 2/1/13

Inside Job
documentary showing
at 4:00pm next Sun.
before meeting

Clearly and simply
explains what
happened in 2008 and
yrs. before to cause
housing crisis.
Earnings of $942 mil
Up 31% from $718 mil

Focusing on growth in
Latin America up $22%

658,000 new subs
Compared with 590,000
Last year there


A company allowing families,
businesses and mainly college
students to borrow a car

You register for $25 and pay
their annual $50 fee then pay to
drive.

Rates:
Mon-Thurs Hourly from $8, Daily
from $66
Friday - Sunday
Hourly from $9, Daily from$72



Avis is buying Zipcar at $500 million- $12.25 per
share
Announced earlier this year
Profit for the quarter was $13.8 million
compared with $3.9 million a year ago
$.09 a share
to $.34 a share


Options are a financial contract that allows an
investor to speculate in assets that he/she
doesn’t own.

Options can be used to predict the direction of
stocks, currencies, commodities, or stock
indexes as a whole.

Strike Price- The price the trader thinks the
stock will go to, either above, below, or at the
current market price.

Expiration date- How long the option
contract is good for; anywhere between a
week to over a year.
There are 2 positions you can take with options:
1.
Buy a Call (Bullish on stock)
2.
Buy a Put (Bearish on Stock)

One option contract= right to buy 100 shares of
company at some point in the future at a certain
price.

Ex: CMG- current price= $314

June 13th call at strike price of $340 costs $11.40

$11.40= 100 shares times $11.40
 So = $1,140 for one option contract.

Options are priced based on their intrinsic value
(how close to the strike price they are) plus their
time value (How long do they have until they
expire)

The farther away the expiration date the more
expensive the time value aspect is.

The farther away (either up or down) the strike
price is from the current (spot) price the less it
costs b/c the stock is less likely to move that
much before the expiration date.
Delta, Gamma, Vega, Theta
Delta:
The effect of a one dollar increase in
a stock price to the price of the
option.
Buying stock has D=1
ATM: D=.50
ITM= the more in the money the closer to
D=1
Farther OTM you go, the closer to D=0
CBOE options Calculator
*put in stock symbol to get Delta for
option.
http://www.cboe.com/framed/IVolframed.aspx?content=http%3a%2f%2fcboe.ivolat
ility.com%2fcalc%2findex.j%3fcontract%3dA8DAC572-AD45-4641-A7A8FCA56A76BE34&sectionName=SEC_TRADING_TOOLS&title=CBOE%20%20IVolatility%20Services