Schaeffer's Trading Floor Blog

Analyst Downgrades: Baidu, Clearwire, and Cree

Analysts downwardly revised their ratings on BIDU, CLWR, and CREE

by 2/5/2013 9:19 AM
Stocks quoted in this article:

Analysts are weighing in today on Chinese search engine Baidu, Inc. (ADR) (NASDAQ:BIDU - 107.20), telecom issue Clearwire Corporation (NASDAQ:CLWR - 3.17), and LED specialist Cree, Inc. (NASDAQ:CREE - 43.75). Here's a quick roundup of today's bearish brokerage notes.

  • Down more than 18% on a year-over-year basis, BIDU was hammered with negative attention this morning, after reporting lackluster fourth-quarter earnings ahead of the open. The stock was downgraded at Raymond James (to "market perform" from "outperform") and Stifel Nicolaus (to "hold" from "buy"), while analysts at Barclays and Brean Capital slashed their price targets. Nevertheless, there are still a number of analysts in BIDU's bullish camp. Currently, 11 out of the 16 brokerage firms following the stock have issued "buy" or better recommendations. This leave the door open for future downgrades, which could exacerbate the security's technical woes.

  • Although CLWR has advanced roughly 10% in 2013 -- and bested the broader S&P 500 Index (SPX) by north of 39 percentage points during the past three months -- the equity was cut to "underperform" from "neutral" at D.A. Davidson in pre-market activity. However, options players seem to have higher expectations for CLWR, which is flirting with offers from both Sprint Nextel (NYSE:S) and DISH Network (NASDAQ:DISH). CLWR's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio checks in at 2.89. In other words, calls bought to open have nearly tripled puts during the last four weeks.

  • Finally, CREE was lowered to "hold" from "buy" at Maxim Group today -- a move that could chip away at the security's year-to-date gain of nearly 29%. Meanwhile, sentiment in the options pits seems to mirror this morning's downbeat analyst adjustment. Data pulled from the ISE/CBOE/PHLX shows a 10-day put/call volume ratio of 1.55 for CREE, indicating traders have bought to open 155 puts for every 100 calls during the past couple of weeks. In fact, this ratio is just three percentage points shy of a bearish peak, meaning speculators have rarely picked up puts over calls at a faster pace within the last 52 weeks.

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