Buzz Stocks: Twitter, Cytec Industries, and Alibaba

Today's stocks to watch in the news include Twitter Inc (NYSE:TWTR), Cytec Industries Inc (NYSE:CYT), and Alibaba Group Holding Ltd (NYSE:BABA)

Jul 29, 2015 at 9:24 AM
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Futures are pointed modestly higher this morning, as traders take a glass-half-full approach ahead of this afternoon's monetary policy update from the Fed. Meanwhile, among specific equities in focus are microblogging platform Twitter Inc (NYSE:TWTR), chemical concern Cytec Industries Inc (NYSE:CYT), and China-based e-commerce issue Alibaba Group Holding Ltd (NYSE:BABA).

  • TWTR has a history of making big post-earnings moves, and it looks like today's price action will be no exception. The stock is down 11.6% in electronic trading, and could plumb all-time lows, as disappointing data on the company's user growth -- and a laundry list of challenges highlighted by interim CEO Jack Dorsey -- overshadows better-than-expected second-quarter earnings. Additionally, a number of brokerage firms lowered their price targets on the security. SunTrust Robinson, for example, cut its target price to $38 from $40, saying TWTR needs to prove itself, while J.P. Morgan Securities reduced its price target to $50 from $55, saying improved user growth will take time. Pivotal Research, meanwhile, bumped its price target up by $1 to $42 -- representing expected upside of 14.9% to last night's close at $36.54, and a move into territory not seen since late April.

    Today's projected move lower should please option traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Twitter Inc's 10-day put/call volume ratio of 0.49 ranks in the 90th annual percentile. In other words, puts have been bought to open over calls at a faster clip just 10% of the time within the past year.

  • CYT is up 27.3% ahead of the bell -- and on its way to record-high territory -- after Belgium-based Solvay agreed to buy the firm in an all-cash deal valued at $5.5 billion, or $75.25 per share. On Tuesday, CYT settled the session at $58.39. Analysts, meanwhile, have taken the optimistic route toward a stock that's already up more than 26% year-to-date. Three-quarters of those following Cytec Industries Inc maintain a "strong buy" recommendation, with not a single "sell" to be found. Plus, the average 12-month price target of $65.60 sits above CYT's June 23 all-time high of $62.71.

  • BABA has thrown the gauntlet at Amazon.com, Inc. (NASDAQ:AMZN), saying it will invest $1 billion into its Aliyun cloud computing division. The company hopes to expand its cloud reach in the Middle East, Singapore, Japan, and Europe -- and comes in the wake of last week's announcement that AMZN's successful cloud service helped it bank a second-quarter profit. On the charts, BABA has struggled in 2015, down 22.5% at $80.56 -- and is fresh off a July 7 record low of $76.21. Option traders have kept the faith, though, and at the ISE, CBOE, and PHLX, have bought to open 3.71 calls for each put over the past two weeks.
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