Schaeffer's Trading Floor Blog

Analyst Downgrades: Crocs, Inc., Macy's, Inc., and Yamana Gold Inc. (USA)

Analysts downwardly revised their ratings on CROX, M, and AUY

by 9/11/2014 9:25 AM
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Analysts are weighing in today on plastic shoe maker Crocs, Inc. (NASDAQ:CROX), department store chain Macy's, Inc. (NYSE:M), and commodity concern Yamana Gold Inc. (USA) (NYSE:AUY). Here's a quick roundup of today's bearish brokerage notes on CROX, M, and AUY.

  • CROX is pointed 3.6% lower in pre-market action, after Buckingham Research downgraded the stock to "neutral" from "buy." Since its post-earnings bull gap in late July, Crocs, Inc. has shed almost 10% of its value, ending at $15.04 on Wednesday. The shares are now testing their mettle atop their 200-day moving average, which has acted as a steady foothold for CROX in 2014. Short sellers are gambling on more downside for the equity, as short interest jumped 30% during the past two reporting periods, and now represents nearly seven sessions' worth of pent-up buying demand, at CROX's average pace of trading.


  • M is poised to drop 1.5%, after settling at $59.59 yesterday, as traders mull a downgrade to "neutral" from "buy" at Sterne Agee. Macy's, Inc. has stair-stepped 11.6% higher in 2014, and touched a record high of $63.10 in late August, but has since taken a breather. While most analysts are in the bullish camp -- 10 out of 13 offer up "buy" or better opinions -- options traders have been picking up puts over calls at an accelerated clip. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.49 stands higher than 83% of all other readings from the past year.


  • Finally, AUY closed at $7.33 on Wednesday -- not far from annual-low territory -- after the company temporarily suspended ramp-up activities at its C1 Santa Luz project. The shares of Yamana Gold Inc. (USA) are headed lower out of the gate today, after Morgan Stanley, Credit Suisse, and Raymond James trimmed their price targets to $10.70, $10.50, and $10, respectively. Earlier this week, GMP downgraded the stock to "hold" from "buy," and there could be more on the way. Despite underperforming the broader S&P 500 Index (SPX) by more than 20 percentage points during the past month, AUY still boasts 10 "buy" or better recommendations, compared to one tepid "hold" and one "strong sell."

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Buzz Stocks: JDS Uniphase Corp, MasterCard Inc, and RadioShack Corporation

Today's stocks to watch in the news include JDSU, MA, and RSH

by 9/11/2014 9:24 AM
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Futures are sagging ahead of the bell, after President Barack Obama last night committed the U.S. to an international fight against the Islamic State. In company news, today's stocks to watch include networking equipment maker JDS Uniphase Corp (NASDAQ:JDSU), credit card issue MasterCard Inc (NYSE:MA), and electronics retailer RadioShack Corporation (NYSE:RSH).

  • JDSU announced it will split into two publicly traded companies by spinning off its optical components and commercial lasers unit from its software and services division. The firm projected the spinoff will lower costs by roughly $50 million, and allow the two resulting companies to focus on more specific objectives. In the wake of the news, RBC raised its outlook on the security to "outperform" from "sector perform." Taking a step back, shares of JDS Uniphase Corp have languished, losing nearly 20% year-over-year to their current perch at $12.10, but are up nearly 14% ahead of the bell. Meanwhile, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have grown increasingly optimistic. The stock's 10-day call/put volume ratio across these exchanges is a brow-raising 102.78, with more than 100 calls bought to open for every put during the last two weeks. What's more, this reading ranks in the 100th percentile of its annual range, suggesting the preference for bullish bets over bearish has never been stronger.

  • The European Union's (EU) highest court ruled against MA yesterday, upholding the EU's ban on cross-border card fees. The decision could encourage European governments to cap credit- and debit-card fees -- a lucrative revenue source for MasterCard Inc. On the charts, shares of the credit card giant have struggled, losing 8.3% this year to trade at $76.65. Nevertheless, the brokerage bunch is bullish on MA, handing out 15 "buy" or better recommendations, versus eight "holds" and not a single "sell" recommendation. Should the shares continue to sputter, a round of downgrades could pressure the stock lower.

  • Finally, RSH is plummeting this morning, down about 10% following its latest earnings miss and continued same-store-sales struggles. As a result, the retailer is currently exploring a number of strategic alternatives, including debt restructuring, consolidation of its stores, and possibly bankruptcy. Shares of RadioShack Corporation are down more than 64% this year at $0.93, and in the options pits, short-term traders have displayed a pronounced preference for puts over calls. Specifically, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.14 sits at an annual put-skewed extreme.

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Analyst Upgrades: Intel Corporation, General Electric Company, and Chipotle Mexican Grill, Inc.

Analysts upwardly revised their ratings on INTC, GE, and CMG

by 9/11/2014 9:00 AM
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Analysts are weighing in today on tech titan Intel Corporation (NASDAQ:INTC), fellow blue chip General Electric Company (NYSE:GE), and restaurant issue Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick roundup of today's bullish brokerage notes on INTC, GE, and CMG.

  • INTC -- which settled at $35.02 on Wednesday -- saw its price target lifted to $35 from $33 at Canaccord Genuity. However, the brokerage firm maintained a lukewarm "hold" opinion of Intel Corporation, which has rallied nearly 35% in 2014, and touched a 12-year high of $35.56 earlier this week. In fact, despite outperforming the broader S&P 500 Index (SPX) by 13 percentage points during the past three months, just half the analysts following INTC deem it worthy of a "buy" or better rating. Furthermore, the consensus 12-month price target of $33.85 represents a discount to the stock's current perch. Additional price-target hikes or a round of upgrades could help INTC extend its quest for decade-plus highs.


  • J.P. Morgan Securities upped its price target on GE by $1 to $28, but upheld a "neutral" rating. On the charts, the shares have surrendered 7.4% year-to-date, ending at $25.95 on Wednesday, and have come under recent pressure from their formerly supportive 200-day moving average. Off the charts, General Electric Company recently announced the sale of its appliance business, and has grown increasingly popular among put buyers. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 0.35 stands higher than 78% of all other readings from the past year, pointing to a healthier-than-usual appetite for long puts over calls during the past two weeks.


  • Finally, Janney raised its price target on CMG by $25 to $800 -- more than 100 points above the stock's current all-time high -- and offered up a "buy" endorsement. Since its post-earnings bull gap in late July, Chipotle Mexican Grill, Inc. has been range-bound on the charts, dawdling between $670 and $690. The security is currently perched at the lower end of this range, at $671.36. Meanwhile, option buyers have been picking up puts over calls with a vengeance. On the ISE, CBOE, and PHLX, the stock's 10-day put/call volume ratio of 1.99 sits just 6 percentage points from an annual peak.

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Analyst Update: Citrix Systems, Inc., Mobileye NV, and VMware, Inc.

Analysts adjusted their ratings on CTXS, MBLY, and VMW

by 9/10/2014 1:04 PM
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Analysts are weighing in today on cloud computing firm Citrix Systems, Inc. (NASDAQ:CTXS), mobile camera issue Mobileye NV (NYSE:MBLY), and IT services provider VMware, Inc. (NYSE:VMW). Here's a quick look at today's brokerage notes on CTXS, MBLY, and VMW.

  • MKM initiated coverage on CTXS today with a "buy" rating. Right now, the stock is sitting at $71.50, a 0.6% gain, and is 13% higher year-to-date. Analysts are split down the middle when it comes to Citrix Systems, Inc., with 50% of the 24 covering analysts issuing "buy" or better recommendations. Meanwhile, CTXS's Schaeffer's put/call open interest ratio (SOIR) of 1.23 stands higher than 98% of all other readings in the past year, suggesting short-term options traders are more put-heavy than usual right now.

  • MBLY is down at 1% at $56.04 today, after Deutsche Bank cut its rating to "hold" from "buy." This comes the day after Mobileye NV hit a new record high of $58.61 and Morgan Stanley raised its price target by $19 to $65. However, eight brokerage firms have released "buy" or better recommendations for the stock, with just one "hold." In the options pits, MBLY calls are trading at three times the average intraday rate, with speculators buying to open the September 55 call. Right now, the equity's SVI is at 73%, in the 95th percentile of its annual range, implying that MBLY's short-term options are relatively expensive, at the moment.

  • VMW has tacked on 1.5% to trade at $96.93, after MKM assumed coverage with a "buy" rating. Wall Street is weighing in on the stock with 15 "buy" ratings, compared to eight "holds." VMware, Inc.'s consensus 12-month target sits at $110.81, representing a 14% premium to the stock's current perch.

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Stocks On the Move: Huntsman Corporation, Krispy Kreme Doughnuts, and Lands' End, Inc.

HUN, KKD, and LE are moving sharply in Wednesday's trading

by 9/10/2014 11:43 AM
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Around midday, three of the top market movers are chemical maker Huntsman Corporation (NYSE:HUN), chain confectionery Krispy Kreme Doughnuts (NYSE:KKD), and casual apparel designer Lands' End, Inc. (NASDAQ:LE). Here's a quick roundup of how HUN, KKD, and LE are performing on the charts so far.

  • HUN has rallied 4.1% to trade at $28.05, after its deal to acquire Rockwood Holdings, Inc.'s (NYSE:ROC) titanium dioxide unit was met with regulatory approval from the European Union. In addition, Citigroup weighed in by upgrading HUN to "buy" from "neutral." On a year-over-year basis, Huntsman Corporation shares are now up roughly 50%. Still, there are plenty of skeptics in the options pits, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.19 -- which is higher than 88% of similar readings from the past year. Should these doubters capitulate amid HUN's consistent technical strength, it could usher in a fresh wave of buying power.


  • KKD has plunged nearly 5% to hover around $16.76, following a poorly received fiscal second-quarter earnings report. In fact, year-to-date, the stock is off more than 13%. Not surprisingly, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been buying to open puts over calls at a rapid-fire rate. Specifically, Krispy Kreme Doughnuts' 10-day put/call volume ratio across this trio of exchanges is 3.69 -- just 2 percentage points from a 12-month bearish peak.


  • LE is soaring around midday, up nearly 14% at $37.91, and fresh off a record high of $38.64. Since being spun off from Sears Holdings Corp (NASDAQ:SHLD) in late March, the stock is up more than 34%. All things considered, short sellers may be starting to get nervous. Currently, 32% of Lands' End, Inc.'s float is sold short, which would take about three weeks to cover, at the equity's average daily trading volume.

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