Schaeffer's Trading Floor Blog

Analyst Downgrades: Aruba Networks, Inc., C.H. Robinson Worldwide, Inc., and Bed Bath & Beyond Inc.

Analysts downwardly revised their ratings on ARUN, CHRW, and BBBY

by 5/8/2013 9:17 AM
Stocks quoted in this article:

Analysts are weighing in today on network solutions provider Aruba Networks, Inc. (NASDAQ:ARUN), transportation services firm C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), and home furnishings retailer Bed Bath & Beyond Inc. (NASDAQ:BBBY). Here's a quick roundup of today's bearish brokerage notes.

  • Down almost 18% so far this year to trade at $17.02, ARUN was hit with some bearish attention today, after the firm slashed its fiscal third-quarter guidance yesterday. Specifically, JMP Securities lowered its price target to $21 from $30, while Jefferies and Wedbush Securities also trimmed their respective price targets. However, Aruba Networks, Inc. is no stranger to negative sentiment. Short interest ramped up by more than 7% during the past two reporting periods, and now these bearish bets account for almost 21% of the equity's available float. It would take more than two weeks to unwind these shorted shares, at the stock's average daily trading volume.

  • CHRW -- which has shed roughly 3% year-to-date and is priced at $61.56 -- received price-target cuts at Jefferies (to $56 from $61), Deutsche Bank (to $68 from $78), and RBC (to $58 from $63) this morning, following Tuesday's weaker-than-expected quarterly earnings report. Nevertheless, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at 3.99, indicating traders have bought to open nearly four calls for every put during the past 10 weeks. This ratio registers higher than 69% of comparable 12-month readings, denoting a stronger-than-usual preference for calls over puts. This bevy of bullish bets -- particularly at the May 62.50 strike, which holds open interest of about 8,900 contracts -- could end up translating into options-related resistance in the near term.

  • BBBY was downgraded to "cautious" from "neutral" at ISI Group in pre-market activity, a move that could chip away at the stock's 2013 gain of more than 25%. Meanwhile, the stock -- currently perched at $70.07 -- has been popular with the short-term options crowd lately. Schaeffer's put/call open interest ratio (SOIR) for Bed Bath & Beyond Inc. checks in at 0.30, signaling calls more than triple puts among options scheduled to expire within the next three months. In fact, this ratio ranks lower than all other readings taken within the last 52 weeks, conveying near-term speculators are more bullishly biased toward the stock now than at any other time during the past year.

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