Analyst Update: FARO, Iconix, MGIC Investment

Analysts adjusted their ratings on FARO Technologies, Inc. (FARO), Iconix Brand Group Inc (ICON), and MGIC Investment Corp. (MTG)

Apr 20, 2015 at 11:54 AM
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Analysts are weighing in today on 3-D imaging software developer FARO Technologies, Inc. (NASDAQ:FARO), brand management firm Iconix Brand Group Inc (NASDAQ:ICON), and mortgage insurer MGIC Investment Corp. (NYSE:MTG). Here's a quick look at today's brokerage notes on FARO, ICON, and MTG.

  • The shares of FARO have plummeted 24.7% to $46.87, after the firm warned that its first-quarter sales figures will come in below analysts' expectations. In response, Needham lowered its opinion on FARO Technologies, Inc. to "hold" from "buy," and Canaccord Genuity lowered its price target to $65 from $70 while keeping its "buy" rating. Before today's bear gap, the shares of FARO were within striking distance of their all-time high of $65.63, tagged Dec. 26. Still, short interest increased by 13.3% over the last two reporting periods, and now accounts for 5.6% of FARO's available float, which would take nearly seven sessions to cover, at average trading volumes. Today, however, FARO has been relegated to the short-sale restricted (SSR) list.

  • Roth Capital Partners cut its price target on ICON by $6 to $36 while keeping its "buy" opinion, sending the shares 14.5% lower to $27.40 -- and earlier to an annual low of $26.40. Year-to-date, the shares of Iconix Brand Group Inc are now 20.4% in the red. Accordingly, traders have favored puts over calls lately, as ICON's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.45 reads in the 90th percentile of its annual range. Echoing this indicator is the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.03, which is the highest such reading taken over the past year. Simply stated, near-term speculators have never been this put-skewed on ICON during the past 12 months. Meanwhile, nearly one-third of the equity's available float is sold short, which would take about 16 sessions to cover, at average trading volumes. Like FARO, though, ICON was placed on the SSR list today.

  • The shares of MTG are up about 5% to $10.40 -- and earlier touched a four-year high of $10.50 -- after JMP Securities and Credit Suisse offered upbeat analyst attention. Specifically, the former raised its price target to $10 from $8.50 while upgrading MGIC Investment Corp. to "neutral" from "underperform," and the latter raised its price target to $11.50 from $10.50 while keeping its "market outperform" rating. "Overall, we view the softening of capital requirements and the respite from the uncertainty of the unknown as a positive" for the private mortgage industry, wrote JPM Securities, referring to new Federal Housing Finance Agency rules. Technically speaking, the shares of MTG have performed well recently, up 11.5% year-to-date. However, traders have been picking up MTG puts over calls at a faster-than-usual clip ahead of the firm's trip to the earnings spotlight tomorrow morning. Drilling down, MTG's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.41 reads in the 100th percentile of its annual range.

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