Schaeffer's Trading Floor Blog

Analyst Downgrades: Angie's List Inc, Safeway Inc., and Arch Coal Inc

Analysts downwardly revised their ratings on ANGI, SWY, and ACI

by 6/13/2013 9:07 AM
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Analysts are weighing in today on business referral website Angie's List Inc (NASDAQ:ANGI), food and drug retailer Safeway Inc. (NYSE:SWY), and coal producer Arch Coal Inc (NYSE:ACI). Here's a quick roundup of today's bearish brokerage notes.

  • ANGI was started with a tepid "hold" recommendation at Wunderlich Securities this morning, despite an impressive year-to-date gain of more than 114%. The stock -- presently perched at $25.70 -- has also bested the broader S&P 500 Index (SPX) by more than 29 percentage points during the past three months, yet skepticism continues to grow toward Angie's List Inc. Short interest spiked by about 16% during the past two reporting periods, and now these bearish bets account for over 16% of the equity's available float. It would take more than 17 days to cover these shorted shares, at the stock's average pace of trading.

  • SWY -- which is up about 23% from yesterday's closing price of $23.11 in pre-market trading -- was downgraded to "neutral" from "buy" at Citigroup today, after Sobeys Inc. and Empire Co. agreed to acquire the company's Canadian operations for $5.68 billion in cash. (However, Guggenheim and J.P. Morgan Securities upwardly revised their price targets for the stock.) Meanwhile, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio checks in at 2.09. Or, in simpler terms, calls bought to open have more than doubled puts during the last 10 weeks.

  • ACI saw its price target downwardly revised to $4 from $6 at Nomura ahead of the opening bell, which could steepen the equity's 2013 loss of more than 39%. Nevertheless, Arch Coal Inc -- currently priced at $4.43 -- continues to see plenty of call activity in the short-term options pits. The security's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.47, with calls more than doubling puts among the front three-months series of options. This ratio hovers just 11 percentage points above an annual nadir, signaling near-term options players have rarely been more bullishly biased toward the stock during the past year.

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