Schaeffer's Trading Floor Blog

Analyst Downgrades: QUALCOMM, Amgen, and Virgin Media

Analysts downwardly revised their ratings on QCOM, AMGN, and VMED

by 2/12/2013 9:17 AM
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Analysts are weighing in today on telecom issue QUALCOMM, Inc. (NASDAQ:QCOM - 67.18), biotech firm Amgen, Inc. (NASDAQ:AMGN - 84.92), and entertainment giant Virgin Media Inc. (NASDAQ:VMED - 45.88). Here's a quick roundup of today's bearish brokerage notes.

  • Despite a gain of close to 9% so far this year, QCOM was downgraded to "neutral" from "overweight" at J.P. Morgan Securities this morning. Short-term traders, however, seem to have a more favorable opinion of the stock. QCOM's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.66, with calls comfortably outpacing puts among options with a shelf-life of three months or less. This ratio ranks in the 27th percentile of its annual range, meaning near-term speculators are more bullishly aligned toward the security than usual.

  • AMGN -- which hovers about 1.5% below breakeven year-to-date -- was cut to "market perform" from "outperform" at William Blair ahead of the open. Meanwhile, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio sits at 2.75, indicating traders have bought to open 275 calls for every 100 puts during the past 10 weeks. This ratio is 6 percentage points away from a yearly peak, signaling traders have been snapping up calls over puts at a near annual-high pace.

  • Although VMED boasts a year-over-year advance of almost 79%, the stock was reduced to "hold" from "buy" at Berenberg today. (However, the brokerage firm upped its price target to $47 from $34, presumably to correspond with Liberty Global Inc.'s [NASDAQ:LBTYA] $47.87-per-share buyout offer). The security's technical prowess and takeover buzz hasn't dampened the bearish speculation surrounding VMED, as short interest on the stock rose by nearly 3% during the most recent reporting period. These pessimistic bets now account for more than 13% of the equity's available float. It would take more than 13 sessions to unwind these shorted shares, at VMED's average pace of trading.

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