Analyst Update: BioScrip, Cliffs Natural, Plug Power

Analysts adjusted their ratings on BioScrip Inc (BIOS), Cliffs Natural Resources Inc (CLF), and Plug Power Inc (PLUG)

Apr 9, 2015 at 12:04 PM
facebook twitter linkedin

Analysts are weighing in today on health care firm BioScrip Inc (NASDAQ:BIOS), commodity concern Cliffs Natural Resources Inc (NYSE:CLF), and fuel cell developer Plug Power Inc (NASDAQ:PLUG). Here's a quick look at today's brokerage notes on BIOS, CLF, and PLUG.

  • Craig-Hallum initiated coverage on BIOS with a "buy" rating and a $7 price target, with the brokerage firm saying it expects the company to put in a "substantially better operating performance" this year. The shares of BioScrip Inc have been staging a comeback lately, up 50.4% from their March 12 five-year low of $3.41 to hover near $5.13, including an 7.6% pop today. Meanwhile, traders have been picking up puts at a rapid-fire clip in recent months, as BIOS' 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 5.07 stands higher than 98% of all equivalent readings taken in the past year. Short sellers have taken note of the security, as well, as short interest increased 16% over the past two reporting periods. It now accounts for roughly 22.7% of BIOS' available float, which would take nearly a week to cover, at average trading volumes.

  • CLF is 2.7% higher to $4.94, despite receiving some downbeat brokerage attention. Specifically, BMO lowered its price target to $4 from $8 and its rating to "underperform" from "market perform," saying the "company's cash flow is under strong pressure from low iron ore prices." Meanwhile Morgan Stanley cut its price target to $3 from $5 -- territory not charted in 11 years. The negative analyst notes come as no surprise, considering the shares of Cliffs Natural Resources Inc have lost about 30.8% of their value year-to-date. Despite this dismal technical performance, call buying in the options pits has reached fever pitch -- over the past 10 days at the ISE, CBOE, and PHLX, 7.29 CLF calls have been bought to open for every put, which is the highest such ratio taken over the past year. However, over 42% of the equity's available float is sold short, implying that a portion of this call buying could be at the hands of short sellers looking to hedge their positions.

  • Morgan Stanley started coverage on PLUG with an "equal weight" rating and a $3 price target, explaining the firm's blue-chip customer base -- which includes Wal-Mart Stores, Inc. (NYSE:WMT) and Kroger Co (NYSE:KR) -- create strong growth opportunity. At last check, the shares are about 3.6% higher to hit $2.58. Despite today's pop, Plug Power Inc has been a long-term technical laggard, with the shares down 63.4% year-over-year. Accordingly, puts have never been more popular over the past year, as PLUG's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.60 stands in the top percentile of its annual range. What's more, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.07 is higher than 99% of all equivalent readings taken over the last 12 months, indicating near-term traders are more put-skewed than usual.

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners