Schaeffer's Trading Floor Blog

Analyst Update: Finisar, JDS Uniphase, and Crocs

Analysts adjusted their positions on CROX, FNSR, and JDSU

by 12/6/2012 11:57 AM
Stocks quoted in this article:

While U.S. equity markets are tip-toeing into positive territory in midday action, here's a quick update on today's latest brokerage notes, including adjustments for telecom equipment developers Finisar Corporation (NASDAQ:FNSR - 13.96), and JDS Uniphase Corp (NASDAQ:JDSU - 12.21), and footwear designer Crocs, Inc. (NASDAQ:CROX - 13.57).

  • Despite reporting a significant drop in its second-quarter earnings, FNSR is up today on word that the company finally has a firm grip on its operating costs. Following this news, analysts at MKM Partners lifted their price target on the stock to $16 from $15, while maintaining a "buy" rating. This target is right in line with the consensus 12-month price target of $16.30, which represents an 16.8% premium to FNSR's current level. Elsewhere, short sellers have been exiting their positions, but plenty of negativity remains intact. Over the past month, short interest dropped 10.5% and now makes up 14.4% of the security's float. In fact, at FNSR's average pace of trading, it would take more than five sessions to buy back all of these shorted shares.

  • Fellow telecom concern JDSU has suffered a different fate today, dropping more than 1.3% on a downgrade to "market perform" from "outperform" at Raymond James. While the brokerage bunch is solidly bullish toward the stock -- eight out of 12 consider it worthy of a "buy" of better endorsement -- optimism also appears to be mounting in the options space. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), shows a 10-day call/put volume ratio of 3.23, which is up from JDSU's 50-day call/put volume ratio of 0.69.

  • In after-hours activity last night, CROX was started with an "outperform" rating at Imperial Capital. Today's 2% move higher has put a dent in the equity's near 10% year-to-date deficit. While the stock extends its climb from a two-year low of $12 -- touched two days in a row back in mid-November -- its downtrending 40-day moving average continues act as a technical ceiling. In fact, this trendline hasn't been toppled since September. Looking at the sentiment backdrop, the options arena looks overwhelmingly upbeat. During the past 10 days, speculators on the ISE, CBOE, and PHLX have bought to open 20.43 calls for every CROX put, indicating bullish bets have been picked up over bearish at a near-annual high clip in recent weeks. But there could be an ulterior motive behind this call-heavy activity. Elsewhere on the Street, short interest ramped up 18% during the past month, pointing to the possibility of hedging activity by the shorts. However, the bearish bandwagon is far from crowded, as it would take fewer than three days for these pessimistic positions to unwind.

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