Buzz Stocks: Valeant Pharmaceuticals Intl Inc, Xerox Corp, and PMC-Sierra Inc

Today's stocks to watch include Valeant Pharmaceuticals Intl Inc (VRX), Xerox Corp (XRX), and PMC-Sierra Inc (PMCS)

by Kirra Fedyszyn

SWKS
MSCC
PMCS
XRX
VRX

Published on Nov 24, 2015 at 9:47 AM

Updated on Jun 24, 2020 at 10:16 AM

It's looking like another rough day for U.S. stocks, as an upwardly revised GDP increases the odds of a December rate hike. Among the equities in focus are biotech concern Valeant Pharmaceuticals Intl Inc (NYSE:VRX), office supply producer Xerox Corp (NYSE:XRX), and semiconductor maker PMC-Sierra Inc (NASDAQ:PMCS).

VRX is 2.2% lower this morning at $85.48, despite news that activist investor Bill Ackman has increased his stake in the recently-troubled drugmaker to 9.9% from 5.7%. Ackman says that he is taking advantage of heavy losses in the stock to build his stake; Valeant Pharmaceuticals Intl Inc has been plummeting on the charts since September, sparked by a scathing report from short seller Citron Research. The shares have finally started to make up a little ground over the past few days, after hitting a new two-year low just last week. But even as the stock floundered, options traders and analysts have remained surprisingly bullish. Currently, 10 of the 14 brokerages following VRX give it a "buy" rating or better, without a single "sell" on the books.

Carl Icahn is another investor making news today, as the billionaire disclosed that he has taken a 7.13% stake in XRX, calling the stock "undervalued." Xerox Corp is 1.1% higher on the news, last seen trading at $10.87. The shares had been trending lower since last December, but seem to have turned around after the company reported better-than-expected quarterly earnings at the end of October. Options traders should be especially pleased with today's upward momentum. XRX holds a 50-day call/put volume ratio of 20.35 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- indicating more than 20 calls bought for every put, and ranking higher than 80% of readings in the past year.

PMCS is 1.9% lower this morning at $11.63, after striking an agreement to be bought by Microsemi Corporation (NASDAQ:MSCC) in a $2.5 billion cash-and-stock deal. PMC-Sierra Inc has been holding steady between $11.50 and $12 for about a month, since news of a buyout -- first with a $2 billion offer from Skyworks Solutions Inc (NASDAQ:SWKS), and then a competing offer from Microsemi -- caused the shares to nearly double in value in a matter of days. Microsemi is also headed lower on the news, last seen down 6.8% at $33.76.

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