A daily feature available on SchaeffersResearch.com is "Street Chatter." Every day, we'll focus on three newsworthy stocks that are generating a lot of attention on Internet message boards. We hope that this will effectively offer stock information, particularly on equities that are currently popular among those in the investing community.
Cryptologic (CRYP: sentiment, chart, options) is a software and services provider to the worldwide Internet gaming market. The firm is responsible for the licensing of its gaming software and services to an international customer base. In addition to a product portfolio of more than 80 casino games, multi-player bingo and player-to-player poker, CRYP offers integrated e-cash management and customer care services in multiple currencies and multiple languages. The security is currently encountering resistance at the 33 level, while it clings to round-number support at the 30 level. Furthermore, the equity is resting on support at its ascending 10-week moving average, a trendline it has not closed a week below since the start of November.
Despite the equity's long-term uptrend, investors have grown quite skeptical of the shares. The stock's Schaeffer's put/call open interest ratio rests at 0.31. While that number appears to be rather small, it is actually higher than 91 percent of all those taken over the past 52 weeks. What's more, the number of CRYP shares sold short skyrocketed by 926 percent in March. However, this accumulation of bearish bets still accounts for only 1.24 percent of the stock's float and gives the security a short-interest ratio of just 0.31. Meanwhile, CRYP continues to hover below the Street's radar, as only one analyst currently following the firm. Any additional coverage could help to push the shares sharply higher.
The stock's stellar uptrend combined with some lingering skepticism in its sentiment has earned CRYP a Schaeffer's Equity Scorecard ranking of 8.0 out of 10.
According to Yahoo! Finance, Doral Financial (DRL: sentiment, chart, options) is a financial services company engaged in mortgage banking, including thrift operations, institutional securities operations and insurance agency activities. The firm conducts its mortgage banking activities in Puerto Rico through its four mortgage banking units: HF Mortgage Bankers, an operating division at the parent company level, Doral Mortgage Corporation, Centro Hipotecario de Puerto Rico and Sana Mortgage Corporation. Furthermore, in the United States, DRL conducts its mortgage banking activities through its subsidiary, Doral Money. The company was recently mentioned in a column in the latest edition of BusinessWeek. Analysts recently questioned the assumptions DRL used to value $879 million worth of certain securities when the company filed its 2004 10-K. However, Donald Gimbel of Carret Asset believes that with the housing shortage in Puerto Rico, mortgage demand should stay strong for DRL. The analyst expects earnings of $5 per share in 2005 and $5.50 to $6 per share in 2006.
Since hitting a near-term high on January 18, the shares have plunged roughly 60 percent under pressure from their declining 10-day and 20-day moving averages. Furthermore, DRL has dropped back below former resistance at the 20 level. This region could hinder any attempts made by the shares to rebound.
Traders have shrugged off the stock's weak performance and continue to bet on a rebound in the shares. Options speculators have favored calls over puts, resulting in a SOIR of just 0.50. This reading is lower than 81 percent of all those taken over the past year. And while short interest jumped by 17 percent during the most recent reporting period, these pessimistic positions can still be covered in approximately three days to trading. Wall Street is somewhat split over the firm's prospects. Zacks reports that four analysts weigh in with "buy" ratings while the other four following DRL give it a "hold."
The Schaeffer's Equity Scorecard ranking for DRL rests at a meager 2.5 out of 10, indicating that the stock may be facing additional downside as this optimism unwinds.
Looking ahead, DRL is slated to step into the earnings confessional on April 13, according to Zacks. The Street is expecting a profit of 94 cents per share, a 9.3-percent improvement over its year-ago earnings of 86 cents per share. Historically, the firm has surpassed the consensus estimate for the past five quarters by an average of 8.6 percent.
Sears Holdings (SHLD: sentiment, chart, options) is seeing some chatter on the message boards this morning. The firm said that it plans a "mass layoff" of at least 500 workers at its Chicago headquarters, according to a revised report filed with the state's Department of Commerce and Economic Opportunity. The firm reported that some layoffs will be announced by the end of April from among the 5,000 people working at the headquarters. However, the vast majority of the work force of 400,000 will keep their jobs. In other news, SHLD plans to launch an exclusive new line of home products from Ty Pennington, the design team leader on ABC's "Extreme Makeover: Home Edition." The newest addition to the Sears family of brands will appear in Sears stores nationwide April 18.
Sentiment toward the retailing giant is somewhat mixed at the moment. Options players have grown quite optimism, pushing the stock's SOIR down to 0.70 in the 21st percentile. On the other hand, short interest soared 16 percent higher in March to 13.4 million shares, or 25 percent of the equity's total float. Wall Street has its doubts as well, with two of the three analysts following SHLD rating it a "hold." This bearish configuration leaves ample room for future upgrades and/or additional coverage.
Technically speaking, the shares have risen along their 10-day moving average since March. What's more, SHLD has enjoyed the long-term support of its ascending 10-month moving average since January 2004.
This combination of technical strength against a backdrop of lingering pessimism has resulted in a Schaeffer's Equity Scorecard ranking of 7.0 out of 10.
For details on how you can put sentiment studies to work for you, please visit Schaeffer's StreeTools Quotes & Tools Section.
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