Schaeffer's Trading Floor Blog

Analyst Upgrades: Sirius XM Radio, Discover Financial Services, and Ctrip.com

Analysts upwardly revised their ratings on SIRI, DFS, and CTRP

by 12/18/2012 8:58 AM
Stocks quoted in this article:

Analysts are weighing in today on satellite radio issue Sirius XM Radio Inc (NASDAQ:SIRI - 2.92), banking giant Discover Financial Services (NYSE:DFS - 40.18), and travel service provider Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP - 22.08). Here's a quick roundup of today's bullish brokerage notes.

  • SIRI --which sits on a year-over-year advance of more than 61% -- was started with a "buy" recommendation at Goldman Sachs this morning. The equity has also bested the broader S&P 500 Index (SPX) by nearly 21 percentage points during the past three months, but that hasn't kept the skeptics at bay. Short interest on SIRI jumped by more than 14% over the most recent reporting period, and now accounts for close to 11% of the security's available float. In fact, it would take more than a week to unwind these bearish bets, at the stock's average daily trading volume.

  • As DFS prepares to report quarterly earnings on Thursday, the equity received price-target hikes at RBC (to $50 from $49) and Guggenheim (to $48 from $46) ahead of the open. The shares have gained more than 70% during the past year, yet puts have had a slight edge over calls lately, as evidenced by DFS' 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.02. This ratio ranks in the 86th annual percentile, meaning traders have been picking up puts over calls at a faster-than-usual pace.

  • CTRP was upgraded to "outperform" from "neutral" at Macquarie today, which could help ease the stock's year-to-date decline of roughly 6%. Meanwhile, short-term bears have been converging on the equity of late, as CTRP's Schaeffer's put/call open interest ratio (SOIR) checks in at 2.49. In other words, puts more than double calls among options slated to expire in the next three months. This ratio is just 10 percentage points shy of a bearish peak, indicating near-term options players have rarely been more put-heavy toward the security during the past year.

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