Buzz Stocks: Reynolds American, Novavax, and Yahoo!

Today's stocks to watch include Reynolds American, Inc. (RAI), Novavax, Inc. (NVAX), and Yahoo! Inc. (YHOO)

Sep 29, 2015 at 10:20 AM

U.S. benchmarks are modestly higher this morning, bouncing back from yesterday's sell-off. Today's equities in focus are cigarette company Reynolds American, Inc. (NYSE:RAI), vaccine maker Novavax, Inc. (NASDAQ:NVAX), and Internet giant Yahoo! Inc. (NASDAQ:YHOO).

RAI is 1.5% higher at $44.05 this morning, and just tagged a record peak of $44.44, after news surfaced that it will sell its non-U.S. Natural American Spirit tobacco business to Japan Tobacco Inc for $5 billion. The deal between Japan Tobacco and Reynolds American, Inc. will need regulatory approval and should close in early 2016. Technically, shares of RAI have added nearly 38% in 2015, cruising along support from their 10-week moving average. While RAI has racked up steady gains, option players remain skeptical. At last check, the equity's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 0.72 is higher than 77% of the readings taken during the past 52 weeks. An exodus of option bears could help push the stock higher.

After waffling in early trading, NVAX is 2.7% higher at $8.38, after data demonstrated that its RSV vaccine was effective in protecting infants from a common respiratory virus -- the second bit of good news in the past few weeks for this vaccine. Novavax, Inc.is now hosting its third annual analyst and investor day meeting. Shares of the vaccine company have slumped along with biotechs lately, dropping 44% from a decade-plus high of $15.01 in mid-August. Short sellers have stocked up on NVAX, as nearly 11% of the firm's float is sold short -- representing nearly six sessions' worth of pent-up buying demand, at the stock's average pace of trading.

After hitting a two-year low of $27.20 yesterday, YHOO is 5.8% higher at $29.20, thanks to news that it is going to continue with a planned spin-off of its Alibaba Group Holding Ltd (NYSE:BABA) stake, despite the tax consequences. The decision has overshadowed a price-target cut to $40 from $43 at Mizuho. Technically, Yahoo! Inc. shares have had a rather rough 2015, dropping 42.2%. Nevertheless, analysts remain bullishly aligned toward the search giant. Currently, 20 brokerages hang a "buy" or better ranking on YHOO, compared to seven "holds" and not a single "sell." Downgrades from this group could spell further downside for the stock.

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