Schaeffer's Trading Floor Blog

Analyst Upgrades: Aruba Networks, Inc., Best Buy Co Inc, and MannKind Corporation

Analysts upwardly revised their ratings on ARUN, BBY, and MNKD

by 8/27/2014 8:51 AM
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Analysts are weighing in today on network access firm Aruba Networks, Inc. (NASDAQ:ARUN), electronics retailer Best Buy Co Inc (NYSE:BBY), and biopharmaceutical issue MannKind Corporation (NASDAQ:MNKD). Here's a quick roundup of today's bullish brokerage notes on ARUN, BBY, and MNKD.

  • Last night, ARUN posted a fiscal fourth-quarter earnings beat, raised its profit outlook, and announced workforce reduction plans to optimize the company's administrative costs. Subsequently, the shares were met with price-target hikes at no fewer than seven brokerage firms, and upgrades to "buy" from "neutral" at UBS and to "neutral" from "underweight" at J.P. Morgan Securities. In the wake of this positive attention, Aruba Networks, Inc. -- which closed yesterday at $20.24 -- is sitting about 8% higher ahead of the bell. This is bad news for short sellers. Currently, 11.9% of ARUN's float is sold short, which would take nearly eight sessions to buy back, at the stock's average daily trading pace.

  • BBY saw its price target upwardly revised to $37 from $35 at J.P. Morgan Securities and to $36 from $34 at RBC, despite the retailer's mixed turn in the earnings confessional Tuesday morning. On the charts, the stock has been in rally mode since hitting an annual low of $22.15 in late January, up 34.5% to trade at $29.80. Nevertheless, short interest on Best Buy Co Inc represents 8.5% of its float, which would take more than a week to cover, at the stock's typical trading levels. In other words, should the shares rise in the wake of the aforementioned brokerage notes, there's plenty of sideline cash available to fuel additional gains.

  • Finally, MNKD was initiated with a "buy" rating and $10 price target at Jefferies. This seems appropriate, given the stock's more than 41% year-to-date gain to rest at $7.34. More recently, the shares could be found bouncing from their 200-day moving average, following a pullback from a nearly five-year high of $11.48 in late June. As with ARUN and BBY, MannKind Corporation has been a popular target among short sellers. Specifically, 30% of the equity's float is sold short, which represents close to two weeks' worth of pent-up buying demand, at the stock's average daily trading volume.

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