Schaeffer's Trading Floor Blog
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The major market indexes are modestly lower this afternoon, as investors digest the latest round of earnings and disappointing data on durable goods. Among some of the stocks in focus are streaming-video provider Netflix, Inc. (NASDAQ:NFLX), java giant Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), and semiconductor concern Cree, Inc. (NASDAQ:CREE), which have all attracted the attention of analysts.

  • NFLX continues to ride earnings momentum to new annual highs, peaking at $224.30 right out of the gate. The stock has shrugged off a downgrade to "underperform" from "hold" at Jefferies, with the brokerage firm simultaneously hiking its price target to $160 from $130. Technically speaking, Netflix is up roughly 136% in 2013, and has outperformed the broader S&P 500 Index (SPX) by 27 percentage points during the past three months. Still, the average 12-month price target sits at $159.85, representing a steep discount to NFLX's current price -- and leaving the door wide open for additional price-target boosts.

  • Meanwhile, SunTrust bolstered its price target on GMCR by $5 to $65, implying expected upside of 15.1% to the stock's current price of $56.47. The shares have tacked on about 37% since the start of the year, yet Wall Street remains wary. Short interest jumped 11.6% during the past month, and now accounts for 26.7% of Green Mountain's total available float. At the security's average pace of trading, it would take more than 14 sessions to buy back all of these bearish bets. Likewise, the Schaeffer's put/call open interest ratio (SOIR) of 2.11 indicates that puts more than double calls among options expiring within three months. What's more, this ratio sits at an annual peak, implying that near-term options players haven't been more put-skewed during the past year. As GMCR extends its uptrend, a short-squeeze situation or a reversal in sentiment in the options pits could add contrarian fuel to the fire.

  • Fiscal third-quarter earnings more than doubled for CREE, but a top-line miss has the shares down 1.4% at $56.68. Still, analysts are applauding the results, with Jefferies, Needham, Piper Jaffray, Lazard, Sterne Agee, and Northland Capital all hiking their respective price targets. Today's dip aside, Cree Inc. has been a broad-market standout, outpacing the SPX by 29 percentage points during the past three months, and notching a two-year peak of $58 just yesterday. Should the stock resume its long-term ascent, a mass exodus of bears could translate into a contrarian boon. Currently, short interest represents eight sessions' worth of pent-up buying demand, and the stock's SOIR of 1.28 rests just 4 percentage points from a 52-week high.

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