Thursday, September 04, 2008

Notable Calls Network (NCN): UST Inc (NYSE:UST)

We caught another beautiful mover at Notable Calls Network (NCN) today.

Around 10:00 AM I started getting questions regarding strength UST Inc (NYSE:UST) was showing, up 4% in early trade. While at first I assumed it had something to do with a positive Tobacco call Morgan Stanley had put out in the morning regarding the Engle ruling, none of the other usual suspects (PM, RAI etc) showed any action.

It had to be related to UST (NYSE:UST).

Some 15 minutes later a rumor of UST pulling out of a Lehman conference emerged.

The logic behind buying a stock of a co that has pulled out of a industry/broker /etc conference is quite simplistic - a takeover may be coming & and acquirer does not want the current management to give any new comments before the deal is done. A quiet period of a sort.

So, in these cases what ones needs to find out is the real reason behind the pull-out. If it's due to a scheduling conflict for example & the stock is still up on takeover chatter, there is money to be made on the short side.

Around 10:26 Briefing.com put out the following comment:

UST Inc: Hearing catalyst behind the move is that co pulled out of a Lehman conference today, spurring takeover chatter; we are checking on the validity of this now (56.28 +2.24).

So, the race was on to find out the real reason behind the pull-out.

Around 10:37 a NCN member pinged me with the following:

"...CEO got sick in UST. Pulled out of conf because of that not takeover - fyi..."

This was coming from a top5 NCN member. A pro with almost 20 yrs of experience on the Street. No bullshit type.

So I quickly distributed the call to other 50+ NCN members. As you can see, this pretty much represented the top in UST today as the stock gave back all of its gains. One could have shorted any size for up to a $2.5 pt gain depending on one's entry/exit. Not bad for an intraday trade.


Oh and Briefing.com got their confirm too (20 minutes later, though):

04-Sep-08 10:57 ET UST Inc Update -- We just spoke to representative of UST; confirms UST will not appear at the conference today; cites scheduling conflict (56.73 +2.69) -Update :

This is how Notable Calls Network (NCN) works - sharing the flow. We catch them every day.

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1 comment:

fun said...

Later yesterday, we got the following news in NY Times:

21:46 Altria in talks to buy UST, in a deal valued at $10B

Sometimes you get sick just at the right time, uh? :)

http://www.nytimes.com/2008/09/05/business/05deal.html?_r=1&sq=altria%20ust&st=cse&adxnnl=1&oref=slogin&scp=1&adxnnlx=1220598166-X3ObmKzUBlfaZurju8Kb0g