Schaeffer's Trading Floor Blog

Analyst Upgrades: Altria, Penn National Gaming, and Randgold Resources

Analysts upwardly revised their ratings on MO, PENN, and GOLD

by 11/19/2012 9:05 AM
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Analysts are weighing in today on tobacco titan Altria Group, Inc. (NYSE:MO - 31.24), gambling hotshot Penn National Gaming, Inc (NASDAQ:PENN - 48.23), and commodity concern Randgold Resources Ltd. (ADR) (NASDAQ:GOLD - 101.77). Here's a quick roundup of today's bullish brokerage notes.

  • UBS upgraded Marlboro maker MO to "buy" from "neutral" this morning, while also lifting its price target by $1 to $36. From a sentiment standpoint, the stock doesn't have too many fans on the Street, with short interest representing nearly a week's worth of pent-up buying demand, at MO's average pace of trading. Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.79 indicates that puts nearly double calls among short-term options. What's more, this ratio registers in the 88th percentile of its annual range, suggesting near-term option traders are more put-heavy than usual right now.

  • PENN has been a favorite among analysts lately, after the firm announced plans to split into two publicly traded companies: a gambling-centered real-estate investment trust (REIT), and a gambling operator. After gapping to a multi-year high of $50.50 on Friday, PENN this morning scored two bullish brokerage notes, with Susquehanna and Brean Capital lifting their respective price targets to $57 and $60. A short-squeeze situation could add fuel to the equity's fire; it would take about seven sessions to buy back these bearish bets, at the stock's average daily trading volume.

  • Finally, GOLD was upgraded to "outperform" from "sector perform" at RBC. The stock has surrendered roughly 20% since touching a record high of $127.27 in early October, but seems to have found support atop the century mark -- home to its 80-week moving average. What's more, the security's Relative Strength Index (RSI) now stands at just 30 -- in oversold territory, suggesting a short-term rebound could be in the cards. Despite the stock's dip, most option traders remain entrenched in the bullish camp. The stock's SOIR of 0.40 sits at an annual low, and speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open more than four GOLD calls for every put during the past two weeks.

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