Buzz Stocks: General Electric, LeapFrog, and Sony

Today's stocks to watch in the news include General Electric Company (GE), LeapFrog Enterprises, Inc. (LF), and Sony Corp (ADR) (SNE)

Jan 23, 2015 at 9:24 AM
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U.S. markets are pointed higher in electronic trading, thanks to carryover from yesterday's stimulus-related optimism. In company news, today's stocks to watch include tech and finance conglomerate General Electric Company (NYSE:GE), children's entertainment company LeapFrog Enterprises, Inc. (NYSE:LF), and electronics-and-media issue Sony Corp (ADR) (NYSE:SNE).

  • GE reported better-than-expected fourth-quarter earnings, powered by a strong performance in its turbine business. Nevertheless, the shares are pointed slightly lower ahead of the bell, threatening to add to their 6% year-over-year deficit at $24.28, after the blue chip's CFO warned of a "challenging year" for the company's oil and gas unit. Put buying has been relatively popular of late in General Electric Company's options pits. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.84 ranks in the 94th percentile of its annual range. Along similar lines, GE's Schaeffer's put/call open interest ratio (SOIR) of 1.17 is just 1 percentage point from a 12-month high -- meaning short-term speculators have rarely been so put-skewed.

  • LF said holiday sales fell well short of internal projections, forcing the firm to reduce its quarterly estimates and withdraw its full-year guidance. "In light of our significant sales decline and losses, we are thoroughly reviewing our product strategies, operations and cost structure in order to improve our financial performance," the company said. In the aftermath of this news, CRT Capital cut is price target on LeapFrog Enterprises, Inc. to $3 from $5, while maintaining a "fair value" rating," and Monness, Crespi, Hardt downgraded the stock to "neutral" from "buy." As such, the shares are down 33% in electronic trading. Longer term, things haven't been pretty, either -- LF has shed nearly half of its value year-over-year to perch at $3.90, and yesterday hit a three-year low of $3.76. Not surprisingly, the brokerage bunch has shown skepticism toward the stock, with all six covering analysts levying lukewarm "hold" assessments.

  • Finally, SNE, which was supposed to release fiscal third-quarter earnings on Wednesday, Feb. 4, has delayed the event due to the recent North Korean cyberattack. While the company will still hold a call on Feb. 4 to provide an operational update, Sony Corp (ADR) will not publish quarterly data until mid-March, assuming its requested extension is approved. Meanwhile, ahead of the bell, the shares are up roughly 2%, putting them on track to open at a new annual high -- following a 32% year-over-year advance to $22.17. Traders aren't necessarily convinced of SNE's technical tenacity, though. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 3.08 is higher than 98% of all comparable readings from the last year. However, some of these put buyers may have been shareholders picking up downside hedges.

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