Buzz Stocks: Alibaba Group Holding Limited, Amazon.com, Inc., and McDonald's Corporation

Today's stocks to watch in the news include Alibaba Group Holding Ltd (BABA), Amazon.com, Inc. (AMZN), and McDonald's Corporation (MCD)

by Karee Venema

Published on Jan 29, 2015 at 9:12 AM
Updated on Apr 20, 2015 at 5:32 PM

Futures are signaling a higher start, as traders digest the latest raft of earnings reports. Meanwhile, among specific stocks in focus are e-commerce concerns Alibaba Group Holding Ltd (NYSE:BABA) and Amazon.com, Inc. (NASDAQ:AMZN), as well as fast food giant McDonald's Corporation (NYSE:MCD).

  • BABA is bracing for an 8% drop out of the gate, after the company reported lower-than-expected revenue for the fiscal third quarter. It's already been a rough week for Alibaba Group Holding Ltd, with the stock off 4.5% since last Friday's close to trade at $98.45, following a handful of fundamental developments. A continued slide could spark a round of downgrades and/or price-target cuts. Currently, all 22 analysts covering the shares maintain a "buy" or better rating, while the average 12-month price target of $120.31 stands in territory yet to be charted by the Wall Street freshman.

  • Ahead of tonight's quarterly earnings report, AMZN's cloud computing business unit unveiled a new corporate email and scheduling service, WorkMail, which will be launched in the second quarter. On the charts, the stock has been a long-term laggard, and is down 20.9% year-over-year to trade at $303.91. As such, short-term speculators have shown a preference for puts over calls, as evidenced by the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.55, which ranks in the 97th annual percentile. With earnings on the horizon, those purchasing premium on AMZN's front-month options are willing to pay a pretty penny. In fact, the security's Schaeffer's Volatility Index (SVI) of 51% rests higher than all other readings taken in the past year, meaning premium is relatively expensive at the moment.

  • MCD announced today that CEO Don Thompson will step down, and be replaced by the firm's current chief brand officer, Steve Easterbrook, effective March 1. The news follows a dismal showing by MCD both on and off the charts, with the equity tumbling 1.5% last week in the wake of an uninspiring fourth-quarter earnings report. Longer term, shares of MCD have surrendered more than 14% since topping out at a record high of $103.78 in mid-May, and closed last night at $88.78. Options traders have kept the faith, though, and at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MCD's 50-day call/put volume ratio of 3.84 ranks just 7 percentage points from a 52-week peak. Should the shares continue to struggle, an unwinding of these bullish bets could translate into headwinds for McDonald's Corporation.

A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Research Exposes Shortcut to Stock Market Wins
A simple way to stop picking losers, and start cashing in like Wall Street's elite.
Google Postpones Android Reveal, "Now is Not the Time to Celebrate"
"Now is not the time to celebrate," Google said in a message on its website
ZNGA Zooms to 8-Year High on Billion-Dollar Deal
ZNGA is planning to buy Peak for $1.8 billion
Huge New Legal Marijuana Market Has Shortage Crisis
250 million Europeans have access to medical marijuana. There's already a shortage....