Schaeffer's Trading Floor Blog

Analyst Update: Agnico Eagle Mines Ltd (USA), iGATE Corporation, and The Fresh Market Inc

Analysts adjusted their ratings on AEM, IGTE, and TFM

by 7/17/2014 2:33 PM
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Analysts are weighing in today on gold producer Agnico Eagle Mines Ltd (USA) (NYSE:AEM), IT services provider iGATE Corporation (NASDAQ:IGTE), and upscale grocery chain The Fresh Market Inc (NASDAQ:TFM). Here's a quick look at today's brokerage notes on AEM, IGTE, and TFM.

  • Reports of a downed Malaysian Airlines plane have sent gold futures soaring on safe-haven demand, and AEM is up 2.4% this afternoon to trade at $41.09. Late Wednesday, meanwhile, the stock scored a price-target hike to $50 from $48 at Credit Suisse, and the firm also backed its "outperform" endorsement for Agnico Eagle Mines Ltd (USA). The shares have rallied an impressive 55.9% so far in 2014, so it's no shock to find analysts crowded into the bullish camp for AEM. Currently, 59% of brokerage firms call the stock a "buy" or better.

  • IGTE is off 4.3% at last look to trade at $38.94, with the stock erasing Wednesday's post-earnings gains. A negative note from Nomura seems to have sparked today's slide, as the brokerage firm lowered its rating on iGATE Corporation to "reduce" from "neutral" ahead of the bell. The analysts softened the blow a bit by raising their price target on IGTE to $35 from $29 -- but the new target is still more than 10% below the equity's current perch. Technically speaking, IGTE was due for a pullback; heading into today's session, the stock's 14-day Relative Strength Index (RSI) of 74 was signaling an overbought condition.

  • Credit Suisse started coverage of TFM with an "underperform" rating, which has pressured the stock to a 2.5% loss in afternoon trading. Today's decline is just more of the same for The Fresh Market Inc, which has shed 23.5% year-to-date to hover at $30.98. Short sellers appear to be firmly in control of TFM, as the number of shares sold short ramped up by 9.6% during the past two reporting periods. These bearish bets now account for 27.1% of the equity's float, or 10.2 times TFM's average daily trading volume.

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Stocks On the Move: Mattel, Inc., Qiwi PLC, and Select Comfort Corp.

MAT, QIWI, and SCSS are moving sharply in Thursday's trading

by 7/17/2014 2:05 PM
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In afternoon trading, three of the top market movers are Barbie parent Mattel, Inc. (NASDAQ:MAT), payment services provider Qiwi PLC (NASDAQ:QIWI), and mattress expert Select Comfort Corp. (NASDAQ:SCSS). Here's a quick roundup of how this trio of names is performing on the charts so far.

  • MAT has fallen 6.6% this afternoon to trade at $36.45, on the heels of this morning's second-quarter earnings miss. Today's losses only add to Mattel, Inc.'s 2014 turmoil, as the shares are down more than 23% year-to-date. Nevertheless, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have displayed optimism toward the stock in recent months. The equity's 50-day call/put volume ratio across this trio of exchanges checks in at 1.73 -- higher than 94% of comparable readings from the past year. Should MAT continue to stumble, a capitulation among option bulls could result in headwinds.

  • QIWI is in even worse shape than MAT today, down 8.6% at $40.65 amid fresh geopolitical tensions for Russia. However, the shares are testing support at their 50-day moving average and the $40 level. Today's pullback aside, Qiwi PLC has outperformed the market for some time -- besting the broader S&P 500 Index (SPX) by 30 percentage points during the past three months. Not surprisingly, the brokerage bunch is bullish. Three analysts rate the stock a "strong buy" (compared to just one "hold" and not a single "sell"), and QIWI's consensus 12-month price target rests at a lofty $54.60. If the stock fails to resume its longer-term uptrend, though, the shares could suffer from a round of downgrades and/or price-target reductions.

  • Unlike the previous pair of names, SCSS has rallied to the tune of an 8.1% gain, and currently hovers at $20.52. Sparking the upward move was last night's second-quarter earnings beat. Longer-term, however, Select Comfort Corp. has struggled on the charts, down nearly 23% year-over-year. As such, short sellers have flocked to the equity, with 7.8% of its float sold short (which would take more than two weeks to cover, at the stock's average daily trading volume). In fact, it's possible some of today's gains are the result of short sellers covering their bearish bets, following SCSS' positive fundamental news.

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Earnings on Deck: Google Inc (GOOGL), Seagate Technology PLC, and General Electric Company

Taking a closer look at GOOGL, STX, and GE ahead of their earnings reports

by 7/17/2014 10:45 AM
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Earnings season is hitting its stride, with roughly a quarter of Dow components and about 58 S&P 500 Index (SPX) companies reporting this week. On tap tonight are quarterly results from tech issues Google Inc (NASDAQ:GOOGL) and Seagate Technology PLC (NASDAQ:STX), while blue chip General Electric Company (NYSE:GE) will unveil its report ahead of tomorrow's open. Here's a quick look at this trio of names as earnings approach.

  • GOOGL's highly anticipated second-quarter earnings report will hit the Street after tonight's close, and over the past eight quarters, the company has fallen short of bottom-line estimates four times. Following its last turn in the confessional in mid-April, a 14-cent profit miss sent the shares 3.7% lower in the subsequent session, which widened to a loss of 5.2% going out one week. Another poorly received report could spark another wave of post-earnings downgrades and/or price-target cuts. Currently, 89% of covering analysts maintain a "buy" rating on Google Inc, while the consensus 12-month price target of $660.37 stands at a healthy 12.5% premium to the equity's present price of $586.74.

  • STX also has a mixed history on the earnings stage, and has fallen short of consensus profit estimates in four of the past eight quarters. The stock has been in rally mode in the two months leading up to tonight's report -- nearly 26% higher from its May 9 low of $48.49 to trade at $61.01, thanks to a sharp bounce off its 200-day moving average. In the options pits, pre-earnings traders have shown a preference for long calls, as evidenced by the security's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.74, which ranks in the bullishly skewed 66th annual percentile. With 6.2% of the stock's float sold short, though, a portion of this activity could be at the hands of shorts hedging against any post-earnings upside. One week after a bottom-line win in May 2013, Seagate Technology PLC was sitting 14.6% higher.

  • In the wake of reports that GE is looking to unload its home appliance unit, the security is down 0.5% to linger near $26.89. If past is prologue, the stock could be poised to pare these losses after reporting earnings tomorrow morning. Specifically, the equity has averaged a single-session post-earnings gain of 0.5% over the past eight quarters, which includes a 1.7% pop in the wake of last April's first-quarter results. Sentiment toward the Dow component has been strongly bullish of late. At the ISE, CBOE, and PHLX, the stock's 50-day call/put volume ratio of 4.91 ranks higher than 90% of comparable readings taken in the past year. Additionally, short interest accounts for a slim 0.7% of the security's float, and would take roughly two sessions to cover, at General Electric Company's average daily pace of trading.

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Buzz Stocks: Microsoft Corporation, Orbitz Worldwide, Inc., General Electric Company, and eBay Inc

Today's stocks to watch in the news include MSFT, OWW, GE, and EBAY

by 7/17/2014 9:23 AM
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Futures are sitting in the red ahead of the bell, following a fresh round of U.S. and European sanctions against Russia. In company news, here are some stocks to watch today:

  • This morning, Microsoft Corporation (NASDAQ:MSFT) announced it will lay off up to 18,000 workers through the end of the year, with roughly two-thirds coming from its recently acquired Nokia Devices and Services business. MSFT said the cuts will result in pre-tax charges between $1.1 billion and $1.6 billion over the next four quarters, related to severance and other costs. (Re/code)

  • Orbitz Worldwide, Inc. (NYSE:OWW) reported last night that Travelport Ltd. -- the online travel firm's biggest shareholder -- will sell half its stock in the company. As a result, OWW -- which won't receive any proceeds from the sale -- will no longer need to get Travelport's consent on key decisions. (The Wall Street Journal, subscription required)

  • According to inside sources, General Electric Company (NYSE:GE) is seeking a buyer for its iconic home appliance unit, known for its refrigerators and washing machines. While the business remains profitable, GE has been re-focusing its business on the production of more lucrative heavy equipment, such as gas turbines and jet engines. (MarketWatch)

  • Also, UnitedHealth Group Inc. (NYSE:UNH), eBay Inc (NASDAQ:EBAY), Morgan Stanley (NYSE:MS), and Yum! Brands, Inc. (NYSE:YUM) reported quarterly earnings. (MarketWatch; The New York Times; USA Today; Bloomberg)

  • Finally, the owners of the 72-story U.S. Bank Tower are planning to construct an observation deck and restaurant on the 69th, 70th, and 71st floors, allowing visitors to get a panoramic view of surrounding L.A. The owners plan to charge $25 per person to enter the observation deck, which they believe may attract up to 500,000 people annually. (Mashable)

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Analysts are downwardly revising their ratings today on entertainment company Twenty-First Century Fox Inc (NASDAQ:FOXA), casino operator Las Vegas Sands Corp. (NYSE:LVS), and cable provider Charter Communications, Inc. (NASDAQ:CHTR). Here's a quick look at today's bearish brokerage notes on FOXA, LVS, and CHTR.

  • ISI Group downgraded FOXA to "buy" from "strong buy," and stripped the stock of its "top pick" status. This downward revision follows Wednesday's news that Twenty-First Century Fox Inc launched an unsuccessful $80 billion bid to acquire Time Warner Inc (NYSE:TWX). FOXA fell 6.2% yesterday to end at $33, but the shares are hovering around breakeven in electronic trading this morning. Today's downgrade -- which isn't exactly a bearish call -- exemplifies the high hopes analysts have for FOXA. Among the 15 firms tracking the shares, all but one considers them worthy of a "buy" or better recommendation.

  • Last night's second-quarter earnings miss for LVS has triggered three price-target cuts for the stock this morning. J.P. Morgan Securities cut its forecast to $83 from $89, Deutsche Bank lowered its target to $84 from $86, and Stifel revised its outlook to $95 from $100. Las Vegas Sands Corp. has shed 6.4% year-to-date, and ended Wednesday's session at $73.80 -- but the stock is off another 2.5% ahead of today's opening bell. Meanwhile, short-term options traders seemed to be bracing for a post-earnings pullback from LVS. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.50 arrives in the 90th annual percentile, as speculative players have been more put-heavy only 10% of the time during the past year.

  • Jefferies downgraded CHTR to "hold" from "buy," but raised its price target to $175 from $160, with the brokerage firm apparently feeling uncertain after the stock's year-to-date gain of nearly 20%. Charter Communications, Inc. ended yesterday's session at $163.98 -- just above analysts' average 12-month price target of $162.69. Elsewhere, it seems that short sellers are betting against CHTR's uptrend. Short interest accounts for a healthy 7.9% of the stock's float, or 5.9 times its average daily trading volume.

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