Schaeffer's Trading Floor Blog

Analyst Upgrades: Whole Foods Market, UnitedHealth Group, and Zipcar

Analysts upwardly revised their ratings on WFM, UNH, and ZIP

by 11/20/2012 8:56 AM
Stocks quoted in this article:

Analysts are weighing in today on organic supermarket chain Whole Foods Market, Inc. (NASDAQ:WFM - 91.41), health insurance firm UnitedHealth Group Inc. (NYSE:UNH - 52.91), and car sharing network Zipcar Inc (NASDAQ:ZIP - 7.03). Here's a quick roundup of today's bullish brokerage notes.

  • WFM was upgraded to "buy" from "neutral" at Goldman Sachs this morning, amid reports that the company plans to increase its share repurchase program by $300 million. The security has gained more than 43% during the past year, but that hasn't swayed put buyers. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.40 for WFM, indicating puts bought to open have outpaced calls during the past two weeks. This ratio arrives in the 75th annual percentile, reflecting a stronger-than-usual preference for puts over calls.

  • Lazard started coverage of UNH with a "buy" recommendation and a price target of $70 today, which could add to the stock's year-over-year gain of about 19%. Meanwhile, calls seem to be quite popular with the near-term crowd, as evidenced by the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.65. In other words, calls easily outstrip puts among option expiring in the next three months. This ratio registers in the 19th percentile of its annual range, meaning traders have been more call-heavy toward UNH less than one-fifth of the time during the past year.

  • Up nearly 7% in pre-market trading, ZIP was raised to "buy" from "neutral" at Goldman Sachs ahead of the opening bell. However, the equity has surrendered roughly 61% from the year-ago period, which may be attracting some bearish speculation. Short interest on ZIP rose by 2% during the past two reporting periods, and now accounts for a hefty 19% of the security's available float. In fact, it would take a whopping 32 days to unwind these pessimistic bets, at the stock's average daily trading volume.

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