Buzz Stocks: BlackBerry, Cyberonics, and Aruba Networks

U.S. stocks are modestly higher out of the gate. Among the equities in focus are tech issue BlackBerry Ltd (NASDAQ:BBRY), medical device maker Cyberonics, Inc. (NASDAQ:CYBX) and network solutions provider Aruba Networks, Inc. (NASDAQ:ARUN).

• BBRY is up 1.5% in early trading at $10.70, after announcing a new partnership with Google Inc (NASDAQ:GOOGL). Technically speaking, BlackBerry Ltd has been pushing forward recently, gaining 5.4% month-to-date. Regardless, one-fifth of the equity's float remains sold short. What's more, these bearish bets represent more than a week's worth of pent-up buying power, at typical trading levels. Changing direction, analysts have taken a wait-and-see approach toward the shares. Three brokerage firms currently rate BBRY a "buy" or better, with 12 deeming it a "hold," and four others handing out "sell" or worse recommendations. If the security can extend its recent rally, there's potential for an exodus of shorts, and a shift in analyst sentiment, to boost the stock.


• CYBX is booming today, adding 24%, after announcing a merger with fellow medical device maker Sorin, and posting an earnings beat. Not that the shares needed a stimulus, having already added over 55.4% since hitting an annual low of $48.19 on Nov. 20, last seen at $74.87. What's interesting is, like BBRY, Cyberonics, Inc. has been heavily targeted by short sellers. The 13.4% of its float sold short represents nearly two weeks of trading, at its normal daily trading pace. As far as analysts go, four give CYBX a "strong buy" rating, while the remaining three maintain tepid "hold" recommendations. This could pave the way for possible short-covering activity and/or a round of upgrades.


• ARUN rallied toward the end of yesterday's session, finishing more than 21% higher at $22.24, on reports that Hewlett-Packard Company (NYSE:HPQ) is considering buying the company. Before yesterday's jump, Aruba Networks, Inc. had been hovering around breakeven on a year-to-date basis, but speculators had been placing bets in anticipation of a breakout. Specifically, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 10.19 ranks higher than three-fourths of readings from the past year. In short, option traders have been buying to open calls over puts at a rate quicker than usual. Meanwhile, the stock is 0.4% lower at $22.19, as the company prepares for its fiscal second-quarter earnings report, scheduled for after the close today.