Schaeffer's Trading Floor Blog

Analyst Update: eBay Inc, GT Advanced Technologies Inc, and AOL, Inc.

Analysts offered their two cents on EBAY, GTAT, and AOL

by 9/30/2014 1:13 PM
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U.S. stocks are higher at midday, as end-of-quarter positioning trumps lackluster economic data. Meanwhile, among the equities in focus are e-commerce concern eBay Inc (NASDAQ:EBAY), solar-wafer maker GT Advanced Technologies Inc (NASDAQ:GTAT), and Internet issue AOL, Inc. (NYSE:AOL), which have all attracted analyst attention.

  • EBAY is up 8.6% at $57.16, as traders -- and Carl Icahn -- applaud the company's plans to spin off PayPal next year. Following the news, brokerage action has been mixed. Canaccord Genuity downgraded EBAY to "hold" from "buy," while Susquehanna upped its price target to $56 from $52. The shares of eBay Inc are now in the black on a year-to-date basis, and options traders are rushing to place their bets on the surging stock. Intraday call activity is running at six times the average pace today, and is outpacing put volume by a margin of more than 2-to-1.

  • GTAT is bucking the broad-market trend higher, down 3.7% at $10.85, after UBS cut its price target to $13 from $17 and underscored a tepid "neutral" rating. The stock earlier today fell as low as $10.70 -- in territory not charted since mid-February -- extending its slide in the wake of an Apple Inc. (NASDAQ:AAPL) snub. In fact, the stock is on pace for a monthly deficit of 39%, pressured lower beneath its 10-day moving average. Against this backdrop, option players have grown increasingly bearish, as the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.07 sits just 1 percentage point from an annual peak. Echoing that, GT Advanced Technologies Inc sports a Schaeffer's put/call open interest ratio (SOIR) of 1.47 -- higher than 98% of all comparable readings from the past year, suggesting short-term options traders have rarely been more put-biased.

  • Finally, AOL is up 1.4% at $45.02, after Nomura hiked its price target to $48 from $43, and maintained a "neutral" rating. Since Sept. 25, AOL, Inc. shares have advanced 4.8% amid hopes for a merger with Yahoo! Inc. (NASDAQ:YHOO) -- the latter of which has been active among short-term options traders of late -- and an exodus of bears could add more fuel to AOL's fire. Currently, short interest represents more than a week's worth of pent-up buying demand, at AOL's average pace of trading, and six out of 13 covering analysts maintain "hold" or worse opinions.

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Stocks On the Move: Teekay Corporation, PDF Solutions, Inc., and China Finance Online Co. (ADR)

TK, PDFS, and JRJC are moving sharply in Tuesday's trading

by 9/30/2014 12:22 PM
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Around midday, three of the market's biggest movers are offshore shipping concern Teekay Corporation (NYSE:TK), semiconductor issue PDF Solutions, Inc. (NASDAQ:PDFS), and integrated financial services specialist China Finance Online Co. (ADR) (NASDAQ:JRJC). Here's a quick roundup of how TK, PDFS, and JRJC are performing on the charts so far.

  • TK hit a fresh record peak of $67.98 this morning, but was last seen 14.7% higher at $66.92, following an upgrade to "buy" from "hold" and a price-target hike to $90 from $68 at Deutsche Bank, with the brokerage firm citing the company's new dividend policy. Year-to-date, the shares of Teekay Corporation are up more than 39%, and option traders think there's more room to run. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the stock's 50-day call/put volume ratio of 4.98 ranks in the 86th annual percentile. Simply stated, calls have been bought to open over puts with more rapidity just 14% of the time within the past year.

  • D.A. Davidson cut its price target for PDFS to $24 from $30 (although it maintained its "buy" rating), after the company projected the dissolution of two contract negotiations, and said it expects full-year revenue to arrive flat as a result. As such, the stock has plunged 27.2% today to $12.84, and earlier notched a new two-year low of $12.63. This negative price action is more of the same for an equity that's surrendered 50% of its value in 2014. Should PDF Solutions, Inc. continue to struggle, an additional round of bearish brokerage notes could be on the horizon. At present, only two analysts cover the security, and both have levied a "strong buy" rating toward PDFS.

  • JRJC has surrendered almost 16% to churn near $7.37, after the company reported a wider-than-expected loss in its fiscal second quarter. The stock is now testing support at its 40-day moving average -- a trendline (currently located at $7.62) that has served as a foothold for JRJC since early June. On the sentiment front, traders have been optimistic toward a security that was up more than 39% heading into today's session. At the ISE, CBOE, and PHLX, speculators have bought to open 3.88 calls for each put over the past 20 sessions. Elsewhere, China Finance Online Co.'s (ADR) Schaeffer's put/call open interest ratio (SOIR) of 0.49 shows call open interest more than doubles put open interest among options set to expire in three months or less.

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Buzz Stocks: eBay Inc, Move Inc., and Catalyst Pharmaceutical Partners, Inc.

Today's stocks to watch in the news include EBAY, MOVE, and CPRX

by 9/30/2014 9:26 AM
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Futures are pointed higher this morning, as traders take a glass-half-full approach on the final trading day of the third quarter. In company news, today's stocks to watch include online auctioneer eBay Inc (NASDAQ:EBAY), Internet real estate issue Move Inc. (NASDAQ:MOVE), and biopharmaceutical firm Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX).

  • EBAY is up 8% ahead of the bell, after saying -- to the delight of Carl Icahn -- it will split off its PayPal business into a separately traded public company in 2015. According to the company's CEO John Donahoe -- who will step down once the separation is complete -- the decision "will give eBay and PayPal focused strategic flexibility and an ability to move quickly and decisively in this changing environment." On the charts, eBay Inc has been on the mend since hitting its most recent low of $50.04 on Sept. 12, with the shares up 5.2% to trade at $52.66. In the options pits, however, bears have been emerging amid this rebound, as evidenced by the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.63, which ranks in the 84th annual percentile.

  • MOVE is poised to pop 37% right out of the gate, following News Corp's (NASDAQ:NWSA) $950-million -- or $21 per share -- bid for the company. In a statement, NWSA CEO Robert Thomson said, "In addition to boosting Move's subscription, advertising and software services, this acquisition will give News Corp a significant marketing platform for our media assets." Technically speaking, MOVE hasn't done much to write home about, with the shares off 4.4% year-to-date to linger at $15.29. Traders weren't expecting much from Move Inc., either. In fact, short interest accounts for a healthy 7.8% of the stock's available float, and would take almost nine sessions to cover, at MOVE's average daily pace of trading.

  • CPRX is also looking north ahead of the bell, with the shares up 13%, after the firm said its autoimmune disorder drug, Firdapse, was successful in a late-stage study. The treatment -- which is expected to launch in early 2016, pending approval -- will be available soon to those enrolled in the Food and Drug Administration's (FDA) Expanded Access Program. In addition to this fundamental win, the stock received price-target hikes from Roth Capital (to $6 from $5) and Piper Jaffray (to $5 from $4), with the brokerage firms underscoring their respective "buy" and "overweight" ratings. Considering Catalyst Pharmaceutical Partners, Inc. is already up 53.3% in 2014 to hover at $2.99, sentiment among the options crowd is tilted toward the bullish side. Specifically, speculators at the ISE, CBOE, and PHLX have bought to open 3.11 calls for every put over the past 10 sessions.

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Analyst Downgrades: Alcatel Lucent SA (ADR), Angie's List Inc, and Visa Inc

Analysts downwardly revised their ratings on ALU, ANGI, and V

by 9/30/2014 9:22 AM
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Analysts are weighing in today on networking solutions provider Alcatel Lucent SA (ADR) (NYSE:ALU), business review site Angie's List Inc (NASDAQ:ANGI), and credit card concern Visa Inc (NYSE:V). Here's a quick roundup of today's bearish brokerage notes on ALU, ANGI, and V.

  • After agreeing to loan Ikanos Communications, Inc. (NASDAQ:IKAN) up to $10 million yesterday, ALU was hit this morning with a price-target cut to $4.10 from $4.40 at Goldman Sachs. With the shares already off nearly 30% year-to-date to trade at $3.10, additional bearish brokerage notes could be forthcoming. After all, Alcatel Lucent SA's (ADR) consensus 12-month price target of $4.69 represents a more than 50% premium to current trading levels, and stands in territory not explored since July 2011.

  • Cowen initiated coverage on ANGI with a "market perform" rating and $7 price target. This, after the company announced on Monday a new debt refinancing program. Meanwhile, on the charts, Angie's List Inc has tumbled 57% year-to-date to its perch at $6.52, and yesterday hit an all-time low of $6.38. Short sellers have taken notice of these technical woes, too. In fact, more than one-fifth of the equity's float is sold short, which would take three weeks to cover, at ANGI's average pace of trading.

  • Finally, V received a price-target cut to $261 from $268 at Evercore -- although the new target still represents a nearly 24% premium to the stock's current perch at $210.93. Technically speaking, Visa Inc has struggled in 2014, down 5.3%. As such, bearish betting has heated up in recent months at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, V's 50-day put/call volume ratio across this trio of exchanges is 0.91 -- or just 6 percentage points from a 52-week bearish peak.

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Analyst Upgrades: Facebook Inc (FB), Huntsman Corporation, and Rambus Inc.

Analysts upwardly revised their ratings on FB, HUN, and RMBS

by 9/30/2014 8:57 AM
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Analysts are weighing in today on social network Facebook Inc (NASDAQ:FB), chemical products maker Huntsman Corporation (NYSE:HUN), and tech name Rambus Inc. (NASDAQ:RMBS). Here's a quick roundup of today's bullish brokerage notes on FB, HUN, and RMBS.

  • Despite seeing its Instagram unit get blocked by China yesterday, FB received a price-target hike to $95 from $90 at Evercore. The brokerage firm also underscored an "overweight" rating. This latest bullish brokerage note is par for the course, with the stock boasting 29 "buy" or better recommendations, compared to three "holds" and not a single "sell" rating. Technically speaking, Facebook Inc has been a market outperformer, besting the broader S&P 500 Index (SPX) by 19 percentage points during the past three months, to rest at $79.

  • Having just announced the construction of a new chemical plant, HUN saw its price target upped to $34 from $32 at Keybanc, which also reaffirmed its "buy" opinion. On the charts, the shares have racked up about a 28% year-over-year gain. Nevertheless, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been betting bearishly, per Huntsman Corporation's 10-day put/call volume ratio of 1.03 -- which is higher than 81% of all readings from the past year. An unwinding of this pessimism could result in tailwinds for the security.

  • Finally, Jefferies lifted its price target on RMBS to $14 from $13.50, while maintaining its "hold" assessment on the stock. The shares have had an excellent 2014 -- rallying almost 31% to trade at $12.40 -- helped higher by a steady layer of support at their 32-week moving average. However, Rambus Inc.'s short interest-to-float ratio stands at 7.6%, and it would take 12.5 sessions to buy back these bearish bets, at the stock's average daily trading volume. In other words, RMBS could be on the verge of a short-covering rally.

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