Schaeffer's Trading Floor Blog

Stocks On the Move: Alcobra Ltd, Tekmira Pharmaceuticals Corporation, and Shutterfly, Inc.

ADHD, TKMR, and SFLY are moving sharply in Monday's trading

by 9/22/2014 1:57 PM
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In afternoon trading, three of the top market movers are biopharmaceutical firms Alcobra Ltd (NASDAQ:ADHD) and Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR), and personal publisher Shutterfly, Inc. (NASDAQ:SFLY). Here's a quick roundup of how ADHD, TKMR, and SFLY are performing on the charts so far.

  • ADHD has soared 13.2% to trade near $19.75, following Friday night's news that the company has completed the phase III clinical trial for its ADHD treatment MDX. This sharp move higher has brought the shares into the green on a year-to-date basis. Short-covering activity may be contributing to Alcobra Ltd's intraday rally, as 12.4% of the equity's float is sold short. At the stock's average daily trading volume, it would take more than a week to buy back all of these bearish bets.

  • TKMR is also surging, up 16.9% to hover near $23.57, after the Food and Drug Administration (FDA) approved its Ebola drug for emergency use in the U.S. and Canada. In fact, the security has now nearly tripled in value on a year-to-date basis. Not surprisingly, Wall Street has taken a shine to the shares. All six brokerage firms following Tekmira Pharmaceuticals Corporation have given it a "buy" or "strong buy" rating, and the stock's consensus 12-month price target of $27.03 stands at a nearly 15% premium to current trading levels.

  • SFLY has tacked on about 5% this afternoon to trade at $49.84, on talks of a potential acquisition by private equity firm Silver Lake -- which has apparently outbid several other suitors. Specifically, Silver Lake is reportedly planning to offer at least $2 billion for SFLY, valuing the stock at more than $50 per share. Nevertheless, the shares remain more than 2% lower in 2014. In the options pits, traders have been betting bearishly. During the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Shutterfly, Inc. has racked up a put/call volume ratio of 0.76, higher than 72% of similar readings taken in the past year.

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Analyst Update: AK Steel Holding Corporation, Ford Motor Company, and Veeva Systems Inc

Analysts adjusted their ratings on AKS, F, and VEEV

by 9/22/2014 1:49 PM
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Analysts are weighing in today on metal maven AK Steel Holding Corporation (NYSE:AKS), automobile maker Ford Motor Company (NYSE:F), and cloud concern Veeva Systems Inc (NYSE:VEEV). Here's a quick look at today's brokerage notes on AKS, F, and VEEV.

  • Jefferies raised its price target for AKS to $10 from $9, and reiterated its tepid "hold" rating. Currently, the shares are trading at $8.82, down 6.3% for the session, but up 7.7% year-to-date. Analysts covering AK Steel Holding Corporation are skewed toward the bearish end of the spectrum, with nine "hold" or "sell" recommendations outnumbering two "strong buys." AKS's Schaeffer's put/call open interest ratio (SOIR) of 0.48 is at an annual low. In other words, short-term options traders have rarely been more call-skewed during the past year.

  • J.P. Morgan Securities raised its price target to $22 from $21 for F today. The stock is off 1.4% to sit at $16.42, paring its year-to-date gain to 6.3%. Analysts are split on Ford Motor Company, doling out eight "buy" ratings, compared to five "hold" or worse ratings. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 0.31 stands higher than 99% of all other readings from the past year, pointing to a healthier-than-usual appetite for bearish bets over bullish during the past 10 weeks.

  • William Blair initiated coverage on VEEV today with an "outperform" rating. The stock is down 0.2% to trade at $28.91, bringing the year-to-date loss to 10%. Six out of seven analysts have given it a "buy" or better rating. Short sellers have taken an interest in Veeva Systems Inc, as roughly 36% of the equity's float is sold short. At VEEV's average daily trading volume, it would take almost seven sessions to cover these bearish bets.

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Analyst Downgrades: Whole Foods Market, Inc., Barrick Gold Corporation (USA), and Deere & Company

Analysts downwardly revised their ratings on WFM, ABX, and DE

by 9/22/2014 9:50 AM
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Analysts are weighing in today on organic grocer Whole Foods Market, Inc. (NASDAQ:WFM), commodity concern Barrick Gold Corporation (USA) (NYSE:ABX), and farm equipment maker Deere & Company (NYSE:DE). Here's a quick roundup of today's bearish brokerage notes on WFM, ABX, and DE.

  • Sterne Agee cut its price target on WFM to $37 from $40 (and maintained a tepid "neutral" rating), representing expected downside of roughly 5% to the stock's current perch at $38.97. Year-to-date, shares of WFM are off more than 32%, yet option traders think the equity is ready to bounce back . At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WFM's 10-day call/put volume ratio of 2.15 ranks in the bullishly skewed 68th percentile of its annual range. With 10.5% of the security's float sold short, though, a portion of this call buying could be a result of shorts hedging their bearish bets.

  • ABX got hit with another round of price-target cuts, this time from CIBC (to $20 from $22) and TD Securities (to $19 from $21).This isn't too surprising, considering the stock has shed more than 12% this year to churn near $15.48. This skeptical stance is witnessed elsewhere on the Street, as well. In fact, 83% of covering analysts have levied a "hold" or "strong sell" suggestion toward Barrick Gold Corporation (USA), and the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.88 ranks just 4 percentage points from an annual bearish peak.

  • DE has been charting a path lower since hitting an annual high of $94.89 in early May, with the shares off 12% to linger near $83.44. This downward trajectory may have been what spurred Deutsche Bank to cut its price target on DE to $106 from $110. From a wider perspective, no fewer than 16 out of 19 analysts covering the equity maintain a "hold" or worse suggestion. Meanwhile, in the options pits, the stock's Schaeffer's put/call open interest ratio (SOIR) of 3.08 ranks at an annual peak, indicating short-term speculators are more put-heavy now toward Deere & Company than at any other time within the past year.

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Buzz Stocks: General Motors Company, Google Inc, and Sigma-Aldrich Corporation

Today's stocks to watch in the news include GM, GOOGL, and SIAL

by 9/22/2014 9:29 AM
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U.S. equities markets look like they'll open in the red this morning, with existing home sales data and a pair of speeches from Fed officials on tap. In company news, today's stocks to watch include automaker General Motors Company (NYSE:GM), online search expert Google Inc (NASDAQ:GOOGL), and chemical concern Sigma-Aldrich Corporation (NASDAQ:SIAL).

  • GM is facing yet another round of vehicle recalls. This time, more than 220,000 cars across the U.S. and Canada are being recalled due to a defect in the parking brake, which could potentially result in a fire. On the charts, General Motors Company has swooned amid a seemingly non-stop string of negative fundamental developments, including last week's announcement of reduced production at its European Opel unit. Specifically, the shares have shed 17% year-to-date to rest at $33.94. This could set GM up for a round of bearish brokerage notes, as nine out of 14 covering analysts maintain "buy" or better opinions on the stock.

  • GOOGL's Nexus 9 will be produced by Taiwan-based HTC, according to The Wall Street Journal. The tablet -- HTC's first since 2011 -- is expected to hit the shelves this quarter. On the sentiment front, Google Inc has benefited from positive brokerage attention, with 26 "buy" or better ratings, compared to three "holds" and not a single "sell" recommendation. However, this optimism is warranted, given the equity's nearly 34% year-over-year advance to trade at $605.40.

  • Finally, Merck KGaA -- not to be confused with Merck & Co., Inc. (NYSE:MRK) -- has agreed to purchase chemical producer SIAL for $17 billion in cash, or $140 per share -- a 37% premium to the stock's closing price of $102.37 on Friday. Technically speaking, Sigma-Aldrich Corporation has added about 9% in 2014, and hit a record high of $105 earlier this month. Nevertheless, short sellers have taken an interest in the shares, as 4% of SIAL's float is sold short -- which would take more than three weeks to buy back, at average daily trading levels.

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Analyst Upgrades: Tesla Motors Inc (TSLA), Nokia Corporation (ADR), and Monster Beverage Corp

Analysts upwardly revised their ratings on TSLA, NOK, and MNST

by 9/22/2014 9:24 AM
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Analysts are weighing in today on electric car concern Tesla Motors Inc (NASDAQ:TSLA), telecom issue Nokia Corporation (ADR) (NYSE:NOK), and drink maker Monster Beverage Corp (NASDAQ:MNST). Here's a quick roundup of today's bullish brokerage notes on TSLA, BBY, and MNST.

  • J.P. Morgan Securities chimed in on TSLA, raising its price target to $190 from $170. However, this new target price still sits nearly 27% below the stock's current price of $259.32, meaning additional bullish brokerage notes could be in store -- especially if TSLA extends its 72.4% year-to-date gain. Tesla Motors Inc could also get a boost in the form of a short-covering rally. At present, 23.8% of the equity's float is sold short, representing more than a week's worth of pent-up buying demand.

  • NOK is pointed higher ahead of the bell, after receiving yet another price target hike. Specifically, Canaccord Genuity raised its price target to $12 from $11, and maintained a "buy" recommendation. The stock has been on the mend since hitting its most recent low of $7.30 in early July, with the shares up 18.4% to trade at $8.64, and on Friday, NOK tagged a fresh three-year peak of $8.73. Option traders think there's more room to run, and over the past 10 sessions, have bought to open 11.07 Nokia Corporation (ADR) calls for every put at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). What's more, this ratio ranks in the 82nd percentile of its annual range, meaning calls have been bought to open over puts at an accelerated clip in recent weeks.

  • In mid-August, MNST tagged a record peak of $94.93, and although the equity was last seen lingering near $89.78 -- 32.5% above its year-to-date breakeven mark -- Stifel thinks the stock is ready to resume its run toward all-time highs. Specifically, the firm raised its price target for Monster Beverage Corp to $110 from $94, and maintained a "buy" rating, echoing ISI Group, which started the security with a similar recommendation. Option players have not been as optimistic, though, and at the ISE, CBOE, and PHLX, the stock's 10-day put/call volume ratio of 1.37 ranks in the bearishly skewed 87th percentile of its annual range.

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