Buzz Stocks: Rock-Tenn Co, IBM, Cliffs Natural Resources

Today's stocks to watch include Rock-Tenn Company (RKT), International Business Machines Corp. (IBM), and Cliffs Natural Resources Inc (CLF)

Jan 26, 2015 at 9:08 AM
facebook twitter linkedin


Stocks are pointed lower to start the week, as traders react to Greece's snap election. Among the equities in focus are packaging concern Rock-Tenn Company (NYSE:RKT), blue-chip tech titan International Business Machines Corp. (NYSE:IBM), and mining issue Cliffs Natural Resources Inc (NYSE:CLF).

  • RKT is headed 2.4% higher ahead of the bell, after unveiling plans to merge with MeadWestvaco Corp. (NYSE:MWV). RKT shareholders will be allotted 49.9% of the new company (though current shareholders can opt for cash instead), while MWV shareholders will hold a 50.1% stake. Prior to the news, RKT was on a tear, adding 31% during the past year. In fact, the equity snagged a new record high of $64.34 on Friday, before settling at $62.99. Accordingly, six out of 10 analysts offer up "strong buy" opinions on Rock-Tenn Company, though short-term options traders are more put-heavy than usual. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.12 stands 2 percentage points from an annual peak.

  • IBM is flirting with a 0.8% gain in pre-market action, amid growing -- yet unconfirmed -- chatter that the company could lay off more than one-quarter of its workforce. On the charts, IBM suffered a post-earnings loss of 3.1% on Wednesday, and is poised to close beneath its 80-month moving average for the first time in six years. The stock -- which settled at $155.87 last week -- has underperformed the broader S&P 500 Index (SPX) by about 8 percentage points during the past three months, so it's no surprise to find most analysts are skeptical. International Business Machines Corp. boasts just four "buy" or better ratings, compared to 13 "hold" or worse suggestions.

  • Finally, CLF is poised to jump 5% out of the gate, after the firm said it's scrapping its quarterly dividend in order to reduce more debt. Technically speaking, it's been a rocky road for Cliffs Natural Resources Inc, with the shares surrendering 61.3% over the past year. Should CLF start to improve fundamentally and technically, a mass exodus of bears could fuel the security's rebound. Currently, more than half of CLF's total available float is dedicated to short interest, representing more than seven sessions' worth of pent-up buying demand, at the stock's average pace of trading. CLF finished at $7.49 on Friday.

What This Election Year Means for Stocks

Ipad with I voted sticker

  


 
Special Offers from Schaeffer's Trading Partners