Schaeffer's Trading Floor Blog

New Annual Highs: AOL, OREX, and COST

AOL, Orexigen Therapeutics, and Costco climbed to new heights today

by 6/28/2012 1:46 PM
Stocks quoted in this article:

U.S. stocks are wallowing in the red this afternoon, as the U.S. Supreme Court's much-anticipated healthcare ruling weighs heavily on the markets. Despite today's broad-market sell-off, it's a fairly even mix of stocks at new annual highs versus stocks at new annual lows. The NYSE has seen 43 equities tag 52-week peaks, while securities on the NASDAQ have tallied 23. Among the stocks reaching new heights in today's session are AOL, Inc. (NYSE:AOL - 27.44), Orexigen Therapeutics, Inc. (NASDAQ:OREX - 5.84), and Costco Wholesale Corporation (NASDAQ:COST - 92.59).

  • AOL jumped to a two-year high of $28.36 in early trading, after the company announced plans to buy back 16% of its outstanding shares in a "modified Dutch auction." The repurchasing program will cost approximately $400 million, with the pricing to range between $27 and $30 per share. Today's price action mimics AOL's upward momentum of late. In addition to outperforming the broader S&P 500 Index (SPX) by 55% during the past 60 sessions, AOL is sitting on an impressive 82.7% year-to-date gain.

  • OREX hit its stride right out of the gate, following an early morning bullish brokerage nod from J.P Morgan. The stock's 19% pop pushed OREX to a new annual high of $5.88, and the security now boasts a 267% year-over-year advance. Short sellers have yet to be convinced, though. Short interest rose 6.6% over the last two reporting periods, and now accounts for a healthy 6.9% of OREX's available float.

  • Also seeing its price jump on the heels of some positive broker feedback is COST. The shares soared to an all-time high of $92.87 this morning, after Deutsche Bank hiked its price target on the stock to $107 from $85. COST is now enjoying a comfortable 11% year-to-date lead, and additional analyst-related tailwinds could be in store. No fewer than 11 out of 22 covering analysts maintain a "hold" or "strong sell" rating toward the stock, and its average 12-month price target of $88.52 represents a discount to COST's current perch.

Click here to read the new lows list, including JinkoSolar's (NYSE:JKS) slump to an all-time bottom.


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