Buzz Stocks: Alibaba Group Holding Ltd, Advanced Micro Devices, Inc., and Zafgen Inc

Today's stocks to watch include Alibaba Group Holding Ltd (BABA), Advanced Micro Devices, Inc. (AMD), and Zafgen Inc (ZFGN)

by Mark Fightmaster

Published on Oct 16, 2015 at 10:21 AM
Updated on Oct 16, 2015 at 10:21 AM

U.S. benchmarks are a touch higher this morning, as investors digest earnings and economic data, and after Shanghai stocks logged a second straight weekly gain. Today's equities in focus are Chinese Internet issue Alibaba Group Holding Ltd (NYSE:BABA), semiconductor producer Advanced Micro Devices, Inc. (NASDAQ:AMD), and biopharmaceutical concern Zafgen Inc (NASDAQ:ZFGN).

  1. BABA is in the news this morning, after offering to buy the rest of Chinese video streaming site Youku Tudou (ADR) (NYSE:YOKU) for $3.6 billion. Alibaba Group Holding Ltd (which already owns 18.3% of YOKU) is 2.1% higher at $73.30 in reaction to the news. Since hitting an all-time low of $57.20 late last month, the shares have rebounded 28.1%, and are on pace to end atop their 80-day moving average for the first time since June. While option buyers have demonstrated a penchant for BABA puts lately, analysts are bullish. Specifically, BABA sports 17 "strong buys" and two "buys" out of 22 total rankings. 
  • AMD is a 1% lower at $1.95, after reporting third-quarter earnings and offering lackluster guidance (subscription required), and announcing that it will raise $371 million by selling test-and-assembly plants in China.  Technically, shares of Advanced Micro Devices, Inc. have lost roughly 27% in 2015, and have spent the past few months backing down from resistance in the $2-$2.10 area. Nevertheless, option players maintain a bullish stance toward the semiconductor concern. AMD's 50-day call/put volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 2.53. This ratio ranks higher than 92% of the readings taken in the past 52 weeks, suggesting buyers have picked up calls over puts at a faster-than-usual clip in recent weeks. Capitulation from this bullish bunch could result in further downside pressure on the struggling shares.
  • ZFGN plummeted 31.7% to $14.24, after the U.S. Food and Drug Administration (FDA) put a partial hold on trials of the firm's obesity drug following a patient death. When news of the death surfaced earlier this week, Zafgen Inc fell to a new all-time low of $10.90, before bouncing back to end the day higher. The security is in danger of further downside pressure, should analysts abandon the bulls' camp, as all five of the brokerages tracking ZFGN rate it a "buy" or better.

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