Buzz Stocks: ACE Limited, NIKE, Greenbrier Companies

Today's stocks to watch in the news include ACE Limited (NYSE:ACE), Nike Inc (NYSE:NKE), and Greenbrier Companies Inc (NYSE:GBX)

Jul 1, 2015 at 9:29 AM
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Futures are hinting at a sharply higher open, as optimism builds over a potential bailout agreement in Greece. Among specific equities in focus are insurance issue ACE Limited (NYSE:ACE), athletic apparel giant Nike Inc (NYSE:NKE), and freight equipment maker Greenbrier Companies Inc (NYSE:GBX).

  • Following yesterday's big M&A news in the insurance sector, shares of ACE are up 8% in electronic trading after the company said it will will buy Chubb Corp (NYSE:CB) in a cash-and-stock deal worth $28.3 billion. (CB, meanwhile, is poised to pop 33% out of the gate.) Heading into today's session, ACE was staring at an 11.5% year-to-date deficit, yet sentiment around the Street has been tilted toward the bullish side. For starters, just 1.1% of ACE Limited's float is sold short. Plus, 69% of covering analysts maintain a "buy" or better rating, and the consensus 12-month price target of $119.33 stands at a 17.4% premium to last night's close at $101.68 -- and in territory yet to be charted.

  • It's been a standout run for NKE, which has rallied more than 38% year-over-year to trade at $108.02 -- and is fresh off an earnings-induced record high of $110.34. It appears co-founder Phil Knight wants to go out on top, and last night said he will step down from the role of chairman. Knight has tapped President and CEO Mark Parker as his successor. Despite Nike Inc's success both on and off the charts, option traders have been bracing for a pullback. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 0.80 rests in the 90th percentile of its annual range. In other words, puts have been bought to open over calls at a near-annual-high clip.

  • Unlike its last turn in the earnings confessional, GBX's fiscal third-quarter profit fell short of analysts' estimate -- the first time this has happened in five quarters. The results have the shares about 1.4% lower ahead of the bell, and on pace to add to their nearly 13% year-to-date loss. Should Greenbrier Companies Inc continue to struggle, a round of downgrades and/or price-target cuts could be on the horizon. The majority of analysts covering the stock currently maintain a "strong buy" recommendation, while the consensus 12-month price target of $70.20 represents expected upside of 50% to Tuesday's settlement at $46.85.

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