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Analysts are weighing in today on department store J.C. Penney Company, Inc. (NYSE:JCP), computer maker Hewlett-Packard Company (NYSE:HPQ), and financial services firm Wells Fargo & Co (NYSE:WFC). Here's a quick roundup of today's bearish brokerage notes.
- Sterne Agee downgraded JCP to "neutral" from "buy" this morning. Over the past month, JCP's shares have plummeted 43.7% to trade at $8.03, yet today the department store reported improved sales for September, and said it expects this trend to continue. While JCP's Schaeffer's put/call open interest ratio (SOIR) of 1.37 ranks in the 71st percentile of its annual range -- indicating short-term traders are still more put-heavy than usual toward the stock right now -- call open interest among options expiring within three months has more than doubled since Sept. 23. Perhaps J.C. Penney Company, Inc.'s short sellers are picking up calls to hedge their bearish bets. Short interest soared 14.7% during the last two reporting periods, and now accounts for a whopping 81.6% of JCP's total available float.
- Although HPQ sports a year-to-date gain of 46.2%, the stock has dropped more than 18% during the last three months to trade at $20.84, spurring BMO to slash its price target to $24 from $27 overnight. Meanwhile, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open nearly two HPQ puts for every call during the last two weeks. The resulting 10-day put/call volume ratio of 1.70 ranks higher than 89% of other such readings taken over the past year, conveying Hewlett-Packard Company puts are being picked up over calls at a much faster-than-usual rate.
- WFC shaved off 1.7% in yesterday's session, leading Macquarie to lower its rating on the stock to "neutral" from "outperform." Stepping back, the stock stands 18.2% higher year-to-date at $40.41, and options traders remain optimistic. During the last 10 sessions, WFC saw 364 calls bought to open for every 100 puts at the ISE, CBOE, and PHLX. The resulting 10-day call/put volume ratio of 3.64 ranks just 1 percentage point from an annual high, meaning Wells Fargo & Co calls have been picked up over puts with more rapidity just 1% of the time over the past year. The financial firm is slated to report third-quarter earnings before the opening bell on Friday.