Schaeffer's Trading Floor Blog

Analyst Downgrades: Molycorp, Marvell Technology Group, and Lumber Liquidators

Analysts downwardly revised their ratings on MCP, MRVL, and LL

by 11/13/2012 9:17 AM
Stocks quoted in this article:

Analysts are weighing in today on mining concern Molycorp Inc (NYSE:MCP - 7.17), semiconductor stock Marvell Technology Group Ltd. (NASDAQ:MRVL - 7.78), and hardwood flooring retailer Lumber Liquidators Holdings Inc (NYSE:LL - 55.12). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 3% in pre-market action, MCP was downgraded to "equal weight" from "overweight" at Morgan Stanley today, while CIBC lowered its price target on the stock to $20 from $30. The stock has shed more than 78% from the year-ago period -- while also trailing the broader S&P 500 Index (SPX) by more than 43 percentage points during the past two months -- which may be attracting bearish traders. Short interest currently accounts for nearly 49% of the equity's available float. In fact, it would take roughly nine days to unwind these bearish bets, at MCP's average daily trading volume.

  • MRVL -- which is due to report quarterly earnings after Thursday's close -- received a price-target cut to $8 from $9 at Barclays ahead of the opening bell. The equity has declined nearly 44% year-to-date, yet calls are still ruling the options pits. 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 7.89 for MRVL, indicating traders have bought to open nearly eight calls for every put during the past two weeks. This ratio ranks in the 57th annual percentile, reflecting a slightly stronger-than-usual appetite for calls over puts lately.

  • Despite a whopping year-over-year gain of nearly 226%, LL was cut to "sell" from "hold" at Stifel Nicolaus this morning. Meanwhile, near-term bears seem to share this downbeat attitude toward the security. Schaeffer's put/call open interest ratio (SOIR) for LL checks in at 1.67, confirming puts easily outnumber calls among options scheduled to expire in the next three months. This ratio ranks higher than 91% of comparable readings collected during the last 12 months, signaling short-term traders have rarely been more bearishly biased toward the stock during the past year.

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