Buzz Stocks: GoPro, Inc., Exelis Inc., and BlackBerry Limited

Today's stocks to watch include GoPro Inc (GPRO), Exelis Inc (XLS), and BlackBerry Ltd (BBRY)

Feb 6, 2015 at 9:02 AM
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After dawdling near the flatline earlier, U.S. stocks are poised to jump in the wake of a solid jobs report. Among the equities in focus are mobile camera maker GoPro Inc (NASDAQ:GPRO), aerospace issue Exelis Inc (NYSE:XLS), and smartphone maker BlackBerry Ltd (NASDAQ:BBRY).

  • GPRO is set to disappoint a slew of option bulls this morning. The stock is pointed nearly 13% lower ahead of the bell, after the company issued a profit warning and announced the resignation of Chief Operating Officer Nina Richardson. As a result, no fewer than four brokerage firms cut their price targets on GPRO, including a $10 cut to $35 from Oppenheimer; the new target represents expected downside of 35.6% to GoPro Inc's settlement price of $54.37 on Thursday. However, one group likely cheering the news: short sellers. Short interest represents close to 29% of GPRO's total available float.

  • XLS is set to skyrocket 35% out of the gate, after military supplier Harris Corporation (NYSE:HRS) agreed to buy the firm (subscription required) for about $4.4 billion, or roughly $23.75 per share -- a premium of 34.1% to XLS' closing price of $17.71 on Thursday, and in uncharted territory for the stock. The news could send some recent Exelis Inc shorts scrambling, as short interest soared 57.4% during the most recent reporting period. Prior to today, XLS spent the past few months stagnating between $17 and $18, with its 80-week moving average emerging as support.

  • Finally, BBRY is set to test its footing near $10, after closing at $10.09 last night, amid reports of a Securities and Exchange Commission (SEC) probe. Specifically, regulators are looking into questionable options trades on Jan. 14 -- just hours before rumors of a Samsung bid for BlackBerry Ltd, which translated into a 30% rally to fresh annual highs. Since then, BBRY has taken a breather atop long-term support at its 200-day moving average, and bears have grown increasingly active. Short interest now accounts for almost 26% of the stock's total available float -- representing nearly six days' worth of pent-up buying demand, at the security's average pace of trading. Plus, the stock's Schaeffer's put/call open interest ratio (SOIR) has grown to 0.88, higher than 84% of all other readings from the past year, suggesting near-term option traders are more put-heavy than usual. Should BBRY once again bounce from trendline support, a mass exodus of bears could translate into tailwinds.
 

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