Buzz Stocks: Tesla Motors Inc, Alaska Air Group, Inc., and Zafgen Inc

Today's stocks to watch in the news include Tesla Motors Inc (NASDAQ:TSLA), Alaska Air Group, Inc. (NYSE:ALK), and Zafgen Inc (NASDAQ:ZFGN)

Apr 4, 2016 at 9:30 AM
facebook twitter linkedin

Stocks are signaling a positive start, thanks to rising oil prices. Meanwhile, among specific stocks in focus are electric car concern Tesla Motors Inc (NASDAQ:TSLA), regional airline issue Alaska Air Group, Inc. (NYSE:ALK), and biopharmaceutical firm Zafgen Inc (NASDAQ:ZFGN).

  • Pre-orders for TSLA's Model 3 jumped to 276,000 over the weekend -- more than half of CEO Elon Musk's goal of 500,000 orders by the end of the decade. Against this backdrop, shares of TSLA are up 4.1% in electronic trading, after closing at $237.59 last Friday. Should the shares extend their recent momentum -- Tesla Motors Inc is up 68.4% from its Feb. 9 two-year low of $141.05 -- another round of bullish brokerage attention could be on the horizon. More than half of analysts maintain a "hold" or worse recommendation on TSLA, while the average 12-month price target of $238.06 is in line with the stock's current price.

  • Putting a lid on recent rumors, ALK has confirmed it will purchase Virgin America Inc (NASDAQ:VA) for $2.6 billion to create the fifth-largest U.S. airline. While the news has shares of VA up 40% ahead of the bell, ALK is bracing for a 4.7% drop out of the gate. Heading into today's trading, Alaska Air Group, Inc. was up 33% from its Feb. 8 year-to-date low of $61.58, but running out of steam in the $82-to-$83 region -- and settling last week at $82.01. Option traders, meanwhile, have been buying to open puts relative to calls at a faster-than-usual clip in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ALK's 50-day put/call volume ratio of 0.66 ranks in the 87th annual percentile.

  • ZFGN is set to soar 14.6% out of the gate, after the company said its treatment for Prader-Willi Syndrome -- a life-threatening genetic obesity disorder -- was successful in a late-stage trial. The stock could certainly use a boost, considering it has shed 88% since hitting an all-time high of $55.36 last March, and closed Friday at $6.70. Today's projected price move could shake some of the weaker bearish hands loose. Short interest on Zafgen Inc jumped 10% in the most recent reporting period, and now accounts for 28.5% of the stock's available float, or 5.8 times the average daily trading volume.
Sign up now for Schaeffer's Opening View newsletter to get a head start on all the major pre-market news!

Special Offers from Schaeffer's Trading Partners