Schaeffer's Trading Floor Blog

Analyst Update: Marvell Technology Group Ltd., QUALCOMM, Inc., and SanDisk Corporation

Analysts are weighing in on MRVL, QCOM, and SNDK

by 6/11/2014 12:40 PM
Stocks quoted in this article:

Stocks are swimming in the red this afternoon, after the World Bank downwardly revised its forecast for global economic growth this year. Meanwhile, among the equities in focus are tech concerns Marvell Technology Group Ltd. (NASDAQ:MRVL), QUALCOMM, Inc. (NASDAQ:QCOM), and SanDisk Corporation (NASDAQ:SNDK), which are all bucking the broad-market trend lower thanks to positive analyst attention.

  • MRVL is 2.9% higher at $15.26, after Nomura last night upgraded the stock to "buy" from "neutral," and lifted its price target to $19. Options players, meanwhile, were already singing a bullish tune. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 7.23 stands higher than 82% of all other readings from the past year, pointing to a healthier-than-usual appetite for long calls over puts during the past two weeks. As a result, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.52 ranks in the bottom third of its annual range, suggesting Marvell Technology Group Ltd.'s short-term options players are more call-biased than usual right now.

  • Nomura also weighed in on QCOM, hiking its price target to $90 and reiterating its "buy" endorsement. The stock is fractionally higher at $79.24 today, as traders digest a patent licensing agreement between Rambus Inc. (NASDAQ:RMBS) and a QCOM unit. Despite boasting a year-to-date surplus of nearly 7%, the stock remains plagued by pessimism in the options pits. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio sits at an annual high of 2.89, indicating that QCOM puts have been bought to open over calls at warp speed of late. Short-term option buyers are gambling at a relative discount, as the security's Schaeffer's Volatility Index (SVI) of 13% rests just 5 percentage points from a 12-month low. In other words, QUALCOMM, Inc.'s front-month options are attractively priced right now, from a volatility standpoint.

  • Finally, SNDK has jumped 3.1% to $100.16 -- and stands within a chip-shot of record-high territory -- after BofA-Merrill Lynch upgraded the shares to "buy" from "underperform." The stock has outperformed the broader S&P 500 Index (SPX) by nearly 24 percentage points during the past three months, and boasts a year-to-date gain of close to 42%. Option buyers have taken notice of SanDisk Corporation's ascent, as the equity's 10-day ISE/CBOE/PHLX call/put volume ratio stands at an annual peak of 5.16. Subsequently, the equity's SOIR is docked at 0.53, in the 12th percentile of its annual range, pointing to a bigger-than-usual call skew among options expiring within the next three months.

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