Among the biggest winners in early Friday trading are Covanta (NYSE: CVA), SMART Modular Technologies (Nasdaq: SMOD) and Walgreens (NYSE: WAG).

Trash-to-Cash Announcement Cheers Shareholders

Last night, energy-from-waste company Covanta Holding Corporation (NYSE: CVA) announced it would issue a special cash dividend of $1.50 per share. It also increased the company’s authorization to buy back up to $150 million in common shares. These bountiful gifts were well received, pushing CVA’s share price up +8.2% in early morning trading.

Covanta operates about 60 energy-from-waste facilities across the United States, Europe and Asia. In the first quarter, CVA missed earnings expectations and the stock has been on a downdraft ever since the April 21st financial announcement. Today, shareholders are getting a long-awaited ride up.

Who says you can’t buy love?

Action to Take –> For existing shareholders, this was a nice boost. But new shareholders trying to score CAV’s special cash dividend might be looking for love in all the wrong places. Renewable and green energy companies are likely to get more attention after oil’s messy Gulf woes. But Covanta would still probably need to put a solid quarter under its belt before it finds sustainable appreciation. 

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Good News Bodes Well for the Tech Sector

SMART Modular Technologies (Nasdaq: SMOD) may not be a blue chip, but its stellar fiscal third quarter sheds a positive light on the tech sector overall. After Thursday’s close, the memory chip supplier announced it had more than doubled its revenues from the same quarter last year. It earned $0.26 per share for the quarter, handily beating analysts’ expectations for $0.18 per share.

#-ad_banner-#SMOD also raised its fourth-quarter outlook to the range of $0.22 to $0.24 per share, based on an increase in user demand. The company is seeing particularly strong demand from the United States, Asia and Brazil.

SMOD’s announcement is pushing up its shares +5.6% this morning. But the company’s news may also give a boost to others in the tech sector. SMOD’s results showed solid sequential improvement across a broad customer base. Sales for PCs, networking/telecom and server were all up double-digits.

Action to Take –> SMOD has been surprising analysts on the upside for four quarters now. Even with the stock pop, this tech company is still trading at a price/earnings-to-growth ratio (PEG) of under 0.6. Sure, only the past two quarters have been profitable. But a bargain is a bargain and SMOD has some serious earnings momentum. If SMOD doesn’t float your boat, consider one of its biggest customers, Hewlett Packard (NYSE: HPQ).  

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Win-Win for two Pharmacy Players

Shares of Walgreens (NYSE: WAG) rose this morning on the news that it had settled its dispute with CVS Caremark (NYSE: CVS). Under the new multi-year deal, Walgreens will continue to fill prescriptions covered by CVS Caremark’s benefit plans. The deal is reported by Reuters to be worth billions.

The spat ensued when WAG wanted to charge more per prescription. No financial details were given — and both companies are up on the news. For those keeping score, its WAG up +3.9% and CVS up +3.2%

When we last wrote about this spat on June 10, we suggested that one possible outcome would be that WAG and CVS would in the end just “kiss and make up.” While there may have been a little give and take, the union is apparently worth more to both companies — and the market — than a parting of the ways.

Action to Take –> Everyone was hoping this duo would work things out. Everyone, that is, except WAG’s and CVS’s competitors. Pair trade anyone? I like a long position in CVS or Walgreens against a short position in pharmacy management company Medco Health Solutions (NYSE: MHS).