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Early Edge: Mindspeed, SciClone Pharma, Level 3 Communications, and Red Hat

MSPD warned on revenue, SCLN unveiled buyback plans, LVLT announced plans to relocate to the NYSE, and RHT acquired Gluster

by 10/4/2011 9:22:02 AM
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Checking out a few of today's hot stocks on the move, we've got a fourth-quarter revenue shortfall from Mindspeed Technologies, Inc. (MSPD), a new stock buyback plan for SciClone Pharmaceuticals, Inc. (SCLN), a 1-for-15 reverse stock split for Level 3 Communications, Inc. (LVLT), and an all-cash acquisition for Red Hat, Inc. (RHT).

Mindspeed

Mindspeed Technologies, Inc. (MSPD - 4.93) this morning unveiled some preliminary fiscal fourth-quarter financial figures. Specifically, the semiconductor concern projected quarterly revenue of about $40.5 million, falling short of its previously predicted range of $42.2 million to $43.9 million. Mindspeed's full fourth-quarter results are due out on Tuesday, Nov. 1.

MSPD price chart"We experienced a weaker demand environment in the fiscal fourth quarter of 2011, primarily impacting our high-performance analog and legacy wide area networking business, as a result of weakening demand in the communications infrastructure market," explained CEO Raouf Y. Halim in a statement.

MSPD is down 4.3% in pre-market trading, extending its 52-week slide of 36.4%. The most recent leg of the stock's downtrend has been highlighted by resistance at its 20-day and 40-day moving averages.

In light of the equity's lackluster price action -- as well as today's freshly slashed revenue forecast -- MSPD could be vulnerable to potential downgrades. According to Zacks, all six analysts following the shares maintain a "buy" or better rating, leaving plenty of room for downward revisions.

SciClone Pharma

SciClone Pharmaceuticals, Inc. (SCLN - 3.47) announced today that its board has authorized a plan to buy back up to $20 million of its common stock over the next two years. Additionally, the drug company backed its guidance for fiscal 2011 earnings of 52 cents to 57 cents per share on revenue of $133 million to $138 million. Analysts, on average, were targeting a full-year profit of 50 cents per share on $134.3 million in revenue.

SCLN is up 11.8% ahead of the open, with the equity attempting to break out above resistance at its descending 10-day moving average. This trendline hasn't been surmounted on a daily closing basis since Sept. 16.

Speculative investors are apparently looking for SCLN's recent technical swoon to continue. The equity's Schaeffer's put/call open interest ratio (SOIR) checks in at 4.23, with puts more than quadrupling calls among options slated to expire within three months. This ratio registers in the 86th percentile of its annual range, implying that short-term options traders have been more bearishly aligned only 14% of the time during the past year.

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