Schaeffer's Trading Floor Blog

Analyst Update: Dollar General Corp., Pitney Bowes Inc., and Travelers Companies Inc

Analysts adjusted their ratings on DG, PBI, and TRV

by 7/28/2014 1:32 PM
Stocks quoted in this article:

Analysts are weighing in today on discount retailer Dollar General Corp. (NYSE:DG), office equipment expert Pitney Bowes Inc. (NYSE:PBI), and blue-chip insurance issue Travelers Companies Inc (NYSE:TRV). Here's a quick look at today's brokerage notes on DG, PBI, and TRV.

  • DG is getting a lift, after a pair of rivals decided to join forces. Specifically, the shares are 1.7% higher at $56.58 -- though they remain roughly 6% lower on a year-to-date basis. On the sentiment front, Dollar General Corp. was started at "hold" by Argus; however, this skepticism isn't seen in the options pits. In fact, DG's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio registers at a brow-raising 135.35 -- higher than any other reading taken in the past year, hinting at extreme optimism among traders.

  • PBI is off slightly at $26.90, despite being raised to "buy" from "hold" at Brean Capital. On a longer-term basis, the equity is an outperformer, tacking on nearly 87% since this time last year. However, short sellers aren't sold on Pitney Bowes Inc. -- specifically, 9.2% of the stock's float is sold short, which would take 12.5 sessions to buy back, at average daily trading levels. In other words, there's plenty of sideline cash available to fuel a big short-covering rally, should PBI continue to trek higher on the charts. A potential catalyst is coming up, too, with the company slated to report second-quarter earnings on Wednesday morning.

  • Finally, Dow component TRV saw its rating cut to "hold" from "buy" at Sandler O'Neill, and is currently down 1% at $91.18. With the move lower, the stock is approaching its year-to-date breakeven level, located at $90.54. However, that hasn't stopped short-term options traders from gravitating toward calls. Travelers Companies Inc's Schaeffer's put/call open interest ratio (SOIR) of 0.41 rests just 6 percentage points from an annual low, suggesting speculators have rarely preferred calls over puts more strongly, among options set to expire in the next three months.

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