Schaeffer's Trading Floor Blog

Analyst Downgrades: Monster Beverage, Zynga, and Tyco International

Analysts downwardly revised their ratings on MNST, ZNGA, and TYC

by 10/10/2012 9:16 AM
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Analysts are weighing in today on energy drink giant Monster Beverage Corp (NASDAQ:MNST - 56.74), online game provider Zynga Inc (NASDAQ:ZNGA - 2.43), and diversified products name Tyco International Ltd. (NYSE:TYC - 28.07). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 3% in pre-market trading, MNST was downgraded to "hold" from "buy" at Stifel Nicolaus today, even though the security has gained about 26% during the past year. Short-term options players seem to share this pessimism, as the stock's Schaeffer's put/call open interest ratio (SOIR) stands at 1.11 -- confirming that puts outpace calls among the front three-months' series of options. This ratio arrives in the 82nd percentile of its annual range, meaning near-term traders have been more put-heavy toward MNST just 18% of the time during the past year.

  • With quarterly earnings looming on the horizon, ZNGA was cut to "neutral" from "overweight" at Piper Jaffray this morning, with the brokerage firm commenting, "Social gaming is as unpopular among teens as it has ever been." The beleaguered stock has shed more than 74% year-to-date, and has trailed the broader S&P 500 Index (SPX) by nearly 50% during the past three months. Not surprisingly, most of the covering analysts seem wary of the stock. ZNGA currently sports just three "strong buy" endorsements, compared to 15 "holds" and two "sell" or worse suggestions.

  • Despite a year-over-year gain of more than 30%, TYC was lowered to "neutral" from "outperform" at Credit Suisse ahead of the opening bell. Nevertheless, calls have been ruling the options pits, as data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 26.02 for the security. In other words, traders have bought to open more than 26 calls for every put during the past two weeks. This ratio is just nine percentage points shy of a yearly peak, meaning traders have rarely picked up calls over puts at a faster pace during the last 12 months.

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