NEW YORK (TheStreet) -- Whenever a company announces a stock-moving event it's time to consider a buy-and-trade opportunity. Today the consideration is to book profits on Boeing (BA) and LSI Corp (LSI) as these stocks are benefiting by a share buyback and a takeover, respectively.
On Dec. 6 I wrote, Cisco and Intel Are Buy-Rated Dow Stocks to Own, and in this post I provided my buy-and-trade profile for Boeing. In this story I indicated that it was time to book profits on the aerospace and defense giant as the stock had been downgraded to sell from hold, according to ValuEngine, following a price spike to an all-time intra-day high at $142 on Nov. 18.
Boeing shares opened higher to $138.10 this morning following the announcement of a $10 billion increase to its buyback program. In addition, the company announced a 50% increase in its quarterly dividend to 73 cents. Boeing still has a sell rating and is 34.4% overvalued and has gained 80.5% over the last 12 months.
The stock has been above its 200-day simple moving average all year and is now at $107.20, which is the risk on a reversion to the mean in 2014. The weekly chart profile shows a parabolic pattern with overbought momentum and its five-week modified moving average at $131.85. This bubble will eventually pop! My quarterly value level is $115.10 with monthly and weekly risky levels at $140.46 and $145.67.
On Dec. 11 I wrote, Buy Rated Semiconductors Lag the SOX and in this post I provided my buy-and-trade profiles for 15 buy-rated components of the PHLX Semiconductor Index (SOX) and among this group was LSI Corp. The stock closed Dec. 10 at $8.13 and was undervalued by 24.3% with a gain of 15.3% over the last 12 months.
LSI shares exploded to the upside by 39% on Monday after the wireless chip provider Avago Tech (AVGO) announced its intent to buy the provider of storage and networking solutions for $6.6 billion, valuing the stock at $11.15 per share. However, several shareholder rights groups announced, via Business Wire, they are investigating the Board of Directors of LSI for possible violations in connection with this deal.
The ValuEngine models do not take into account stock takeovers as the only overnight input was Monday's closing price at $10.96. As a result of this $3.05 price gap, LSI has been downgraded to hold from buy and is 69.1% overvalued when it was 24.3% undervalued on Dec. 11.
Buy-and-trade investors who were long this stock with a GTC limit order to sell strength to the risky levels at $8.49, $8.89 and $9.16 posted in the Dec. 11 story would have had their sell strength orders filled at Monday's open at $10.96.
Avago ($50.10) traded to a new all-time intra-day high on Monday at $50.55 on the offer to buy LSI and is trading higher this morning. The stock maintains a hold rating, is 35.5% overvalued and has a gain of 56.6% over the last 12 months. The stock has been above its 200-day SMA since May 29 and this level is now $38.73. The weekly chart is positive with the five-week MMA at $45.86. My monthly value level is $44.15 with semiannual risky levels at $53.04 and $61.49.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.