Buzz Stocks: Frontier, Michael Kors, and Pfizer Inc.

Today's stocks to watch in the news include Frontier Communications Corp (FTR), Michael Kors Holdings Ltd (KORS), and Pfizer Inc. (PFE)

Feb 5, 2015 at 9:14 AM
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U.S. equities are pointed higher this morning, following some big M&A news and dovish comments from one Fed president. In company news, today's stocks to watch include telecom issue Frontier Communications Corp (NASDAQ:FTR), accessories designer Michael Kors Holdings Ltd (NYSE:KORS), and pharmaceutical giant Pfizer Inc. (NYSE:PFE).

  • FTR is allegedly close to buying $10 billion worth of wireline assets from Verizon Communications Inc. (NYSE:VZ), as the latter seeks to focus on its wireless business and pay down debt. This report underscores rumors that surfaced earlier this week. Shares of Frontier Communications Corp are soaring on the news, up 10.4% ahead of the bell -- which would add to their 63.2% year-over-year advance, as of Wednesday's close at $7.28. In fact, the stock hit a three-year high of $7.54 on Tuesday -- a mark that could be toppled out of the gate. This is great news for a recent crop of option bulls. FTR's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 43.31 ranks in the 94th percentile of its annual range.

  • KORS is getting killed in pre-market trading, down 6% on disappointing fiscal fourth-quarter and full-year guidance. At the same time, however, the company's fiscal third-quarter earnings topped expectations. Technically speaking, it's already been a miserable year for Michael Kors Holdings Ltd, which has shed nearly 22% to trade at $71.38. Nevertheless, traders at the ISE, CBOE, and PHLX have bought to open nearly four calls for every put during the last two weeks, per KORS' 10-day call/put volume ratio of 3.65. What's more, this ratio registers in the bullishly skewed 94th percentile of its 12-month range.

  • Finally, PFE is buying injectable drug developer Hospira, Inc. (NYSE:HSP) for roughly $15 billion. "Hospira's business aligns well with our new commercial structure and is an excellent strategic fit for our Global Established Pharmaceutical business, which will benefit from a significantly enhanced product portfolio in growing markets," said Pfizer Inc. CEO Ian Read. Investors are responding positively to the news, with PFE up about 3% ahead of the open -- and on pace to flirt with fresh decade-plus highs. Longer term, the shares have been in recovery mode since bottoming at $27.51 on Oct. 16, adding 16.6% to trade at $32.07. On the sentiment front, the brokerage bunch is largely bullish toward PFE, with two-thirds of covering analysts sporting a "buy" or better rating.

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