Yelp Inc (NYSE:YELP)
The headquarters of YELP and more than 20 other companies are scheduled as stops during the B. Riley Silicon Valley Tech Tour, which runs from today through Thursday. During the tour, various tech firms will offer presentations and walk-throughs of their facilities, each one lasting about an hour.
Focusing on the aforementioned Internet review site, we notice high levels of skepticism. Current short interest levels are sky high, with 22.9% of the shares sold short right now. Elsewhere, 10 out of 17 analysts following Yelp Inc slap it with a "hold" rating, compared to just seven "buy" or better suggestions. On top of that, analysts' consensus 12-month estimate of $46.39 for YELP represents a significant discount to the stock's per-share price tag of $51.83.
This is all quite surprising, given YELP's meteoric rise on the charts. In fact, the equity has rallied more than 165% during the past 12 months, and has outperformed the broader S&P 500 Index (SPX) by nearly 74 percentage points during the previous 60 sessions. If Yelp continues to display strength on the charts, it could lead to a potential short-squeeze situation -- or alternatively, a series of analyst upgrades and/or price-target hikes -- that could propel the shares to even greater heights.
United Parcel Service, Inc. (NYSE:UPS)
UPS is scheduled to appear at a pair of roadshows on Tuesday in Milwaukee and Minneapolis. There's plenty of interest in the package delivery business, too, after its recent, headline-grabbing changes to employee health benefits.
Technically speaking, the equity is up 18.2% in 2013, with the shares checking in at $87.17. Additionally, after hitting an all-time high of $91.78 last month, UPS pulled back, but found a level of support in the form of its 120-day moving average -- a trendline that also contained a mid-July pullback.
Still, attitudes toward United Parcel Service are bearish. The shorts have upped their antes drastically, with short interest increasing 53% in the past two reporting periods. Currently, it would take nearly a week to buy back the shorted shares, given the stock's typical daily trading volume. In the options pits, UPS' Schaeffer's put/call open interest ratio (SOIR) of 1.01 is higher than 94% of like readings recorded in the past year. In other words, traders targeting the front three-month series' of options have rarely preferred puts more, relative to calls.
If pessimism unwinds in the face of resilient technicals, however, United Parcel Service could find its year-to-date rally extended into the foreseeable future.
JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO)
JASO is scheduled to report second-quarter earnings before the market opens on Thursday, and analysts are predicting a loss of 53 cents per share. Historically, the solar panel concern has tanked in the earnings confessional, falling short of the average Wall Street estimate in seven of the past eight quarters. That hasn't hurt the stock, however -- JA Solar has averaged a 9.8% gain in the day following each of those quarterly report releases.
Taking a step back, the Shanghai-based company has been an all-star on the charts. Year-to-date, the shares have advanced more than 95%, and closed last Friday at $8.34. On a relative-strength basis, JASO has outperformed the broader S&P 500 Index (SPX) by nearly 13 percentage points during the past two months.
Still, sentiment is stacked against JA Solar, whose 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the 71st percentile of its annual range. In other words, puts are being bought to open over calls at a faster-than-usual pace. What's more, the SOIR for JASO is 0.64, which is a mere 13 percentage points from a 52-week high, indicating short-term speculators are more put-slanted than usual.
Should JA Solar Holdings Co. maintain its 2013 trajectory, an unraveling of those bearish options bets could spell a contrarian boon for the shares.
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