Buzz Stocks: Transocean, Starwood Hotels, Zillow

Today's stocks to watch include Transocean LTD (RIG), Starwood Hotels & Resorts Worldwide Inc (HOT), and Zillow Inc (Z)

by Andrea Kramer

Published on Feb 17, 2015 at 9:12 AM
Updated on Jul 1, 2020 at 4:53 PM

U.S. benchmarks are holding steady ahead of the bell, as Wall Street digests a Greek bailout bust. Among the equities in focus are drilling issue Transocean LTD (NYSE:RIG), lodging concern Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), and online real estate firm Zillow Inc (NASDAQ:Z).

  • RIG is in the spotlight this morning, after the firm slashed its dividend and said CEO Steven Newman is hitting the bricks. Chairman Ian Strachan will act as CEO in the interim. In pre-market action, the shares of Transocean LTD are wavering around breakeven at $19.05. From a longer-term standpoint, the equity has made strides recently, up 3.9% year-to-date, but remains nearly 56% lower on a year-over-year basis. As such, short-term option traders are more put-focused than usual, as the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.84 sits just 10 percentage points from an annual high. Likewise, not one of the 15 analysts covering RIG deems it worthy of a "buy," though Zephirin this morning hiked its price target by $4 to $35.

  • HOT is set to jump 2.5% out of the gate, on news of a "mutual" breakup with President and CEO Frits van Paasschen. Adam Aron, a director at Starwood Hotels & Resorts Worldwide Inc, will serve as interim CEO. On the charts, HOT settled at $78.55 on Friday -- and north of its 80-week moving average for the first time since early January, thanks to recently announced plans to spin off its timeshare business. After today's anticipated surge, the shares should be in the black on a year-to-date basis. A few short-term option traders could be left in the lurch; the stock's SOIR of 1.02 stands higher than 92% of all other readings from the past year.

  • Finally, Z is up 3.8% in electronic trading, after the company reported record fourth-quarter earnings and said its acquisition of Trulia Inc (NYSE:TRLA) could close as early as today. As such, CRT Capital upped its price target on Zillow Inc to $125 from $108, and reiterated a "fair value" assessment. The shares of Z have outperformed the broader S&P 500 Index (SPX) during the past month, and today's expected lift could spook some short sellers into hitting the exits. In fact, more than half of Z's float is dedicated to short interest, representing two weeks' worth of pent-up buying demand, at the stock's average pace of trading -- plenty of fuel for a short-covering rally. Z ended at $106.50 on Friday.

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