Buzz Stocks: Avago, GoPro, and Seadrill Limited

Today's stocks to watch in the news are Avago Technologies Ltd (NASDAQ:AVGO), GoPro Inc (NASDAQ:GPRO), and Seadrill Ltd (NYSE:SDRL)

May 28, 2015 at 9:30 AM
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Futures are lower this morning, on reports a Greece debt deal may not happen. Back on the homefront, semiconductor specialist Avago Technologies Ltd (NASDAQ:AVGO), wearable camera maker GoPro Inc (NASDAQ:GPRO), and oil-and-gas issue Seadrill Ltd (NYSE:SDRL) are all garnering their fair share of attention.

  • Confirming yesterday's speculation, AVGO said it will purchase sector peer Broadcom Corporation (NASDAQ:BRCM) for $37 billion in cash and stock -- making it the biggest purchase in the semiconductor space to date. The news is being received well on the Street, with shares of AVGO up 3.3% in electronic trading -- and on track to notch a new record high. Longer term, the stock has been a technical standout, boasting a nearly 41% year-to-date lead. A continued rise could prompt some price-target hikes. Avago Technologies Ltd's average 12-month price target of $142.38 is within a chip-shot of last night's close at $141.49. In other news, the company reported better-than-expected fiscal second-quarter earnings last night.

  • GPRO has been charting a path steadily higher in recent months -- a move analysts have started taking note of -- tacking on 43.5% from its March 10 low of $37.13 to trade at $53.28. The stock looks poised to add to these gains today -- up 6% ahead of the bell -- following reports the company plans to build its own quadcopter, which CEO Nick Woodman says is "in some ways the ultimate GoPro accessory." GoPro Inc could get an additional boost, too, should short sellers capitulate to the equity's upward momentum. Although short interest dipped 3% in the latest reporting period, it still accounts for 39% of the equity's available float.

  • It's been a volatile month for SDRL, and today, the shares are signaling a lower start. Stoking the day's bearish bias is a downbeat outlook on the global rig market, with Seadrill Ltd predicting a struggling oil market through 2016 -- which comes despite the firm's first-quarter earnings beat. On the charts, the stock has shed 68.5% since hitting an annual high of $40.44 in late June, and settled Wednesday at $12.73. More recently, the shares have encountered a stern layer of resistance from their 160-day moving average. Meanwhile, in the options pits, short-term speculators have shown a distinct preference for puts over calls. In fact, SDRL's Schaeffer's put/call open interest ratio (SOIR) of 1.56 rests in the 86th percentile of its annual range.

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