Analyst Update: Harmony Gold Mining Co. (ADR), Commercial Metals Company, and Silver Wheaton Corp. (USA)

Analysts are weighing in on Harmony Gold Mining Co. (ADR) (HMY), Commercial Metals Company (CMC), and Silver Wheaton Corp. (USA) (SLW)

Nov 11, 2016 at 3:15 PM
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U.S. stocks are modestly lower this afternoon, though the Dow is still on pace for its biggest weekly gain since 2011. Among stocks in focus today are metal names Harmony Gold Mining Co. (ADR) (NYSE:HMY), Commercial Metals Company (NYSE:CMC), and Silver Wheaton Corp. (USA) (NYSE:SLW). Here's a quick roundup of today's brokerage notes on HMY, CMC, and SLW.

  • Mining stock HMY is falling in step with gold futures, down 15.2% at $2.51, despite delivering its highest quarterly revenue ever. While Morgan Stanley upgraded HMY to "equal weight" from "underweight," Citigroup cut HMY to "sell," and slashed its price target to 40 rand, forecasting lower earnings for 2017. HSBC also downgraded the gold stock to "hold" from "buy," and lowered its price target to 50 rand from 73 rand. Even with today's drop, Harmony Gold Mining Co. (ADR) shares are up over 170% since the beginning of 2016, though they're on pace to close below their 320-day moving average for the first time since mid-January. While absolute volume is historically light, HMY calls have been the options of choice among recent buyers. HMY's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) currently sits at a whopping 19.44, higher than 79% of all other readings from the past 12 months.
  • Steel stock CMC is trading up 0.8% at $20.52, in spite of a downgrade to "neutral" from "buy" by D.A. Davidson, which also raised its target price to $22. CMC is up over 20% since the U.S. election results came in, and yesterday hit an annual high of $20.99, as Donald Trump is seen as favorable for the steel industry. Near-term option players are likely cheering Commercial Metals Company's price action over the past few days, given the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.36 sits in just the 18th percentile of its annual range, suggesting a stronger-than-usual call-skew among near-term traders.

  • SLW is down 9.4% at $18.14, extending yesterday's post-earnings slide, exacerbated by a price-target cut to $31 from $33 at CIBC today. SLW has plummeted nearly 25% this week, and is now testing a foothold atop its 320-day trendline.  A few Silver Wheaton Corp. (USA) option bulls are likely kicking rocks today, with the security's 10-day call/put volume ratio at the ISE/CBOE/PHLX showing almost nine calls bought to open for every put over the last two weeks -- a reading that sits higher than 93% of all others from the past 12 months.
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