Stocks quoted in this article:
Based on survey results covering a variety of metrics -- salary, culture, co-worker interaction -- the website CareerBliss has ranked the 50 Happiest Companies in America. But does an agreeable workspace for employees mean a positive experience for shareholders? Not necessarily.
Eight of the top-10 names are publicly traded. While seven of these are in positive territory in 2013 (as of this writing), just three (highlighted in the table below) have managed to outperform the S&P 500 Index (SPX), which has gained almost 26% year-to-date.
As contrarians, we like to not only look at the price trends of stocks, but also gauge sentiment, to get an edge up on where we think an equity might be going next.
The Expectational Backdrop:
For the most part, opinions are pretty sanguine across the board on these names. Short interest, for example, is not elevated on any of these securities, when compared to their available floats.
Turning to the brokerage brunch, these eight companies collectively have 99 ratings of "buy" or better, compared to 50 "hold" designations and only four recommendations of "sell" or worse. Oddly enough, the company with the second-best performance among the group, Texas Instruments Incorporated (NASDAQ:TXN), faces the most skepticism among analysts, who have handed down eight "strong buys," 18 "holds," and a pair of "sells."
Texas Instruments has also attracted the highest degree of skepticism, relatively speaking, among those buying stock options. During the last 50 trading days on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than two times as many bearish put options have been purchased relative to their bullish call counterparts. The other seven names, on the flip side, are much more popular among traders looking to speculate with bullishly configured call options.
While seeing bullish ratings or speculative activity on a strongly outperforming stock is to be expected, continued optimism on mediocre or underperforming names leaves open the possibility of a gradual shift toward the bearish camp, which could result in some selling pressure. Conversely, skepticism on an outperforming name can be a positive sign of things to come, as there is theoretical room for additional bulls to emerge from the sidelines. So while employees of these companies may continue to enjoy their 9-to-5 existences throughout the coming year, shareholders may not necessarily always be smiling.