Core Laboratories N.V. (CLB)

[RC2]

Merrill downgrades CLB, attributing price action to short covering:

Bank of America/Merrill Lynch analyst Douglas Becker downgraded oil service company Core Laboratories (CLB) to Underperform from Buy today, arguing that much of the stock’s recent strength is due to short covering.

Becker writes that Core Labs is now trading at 24 times forward earnings, above the high end of its traditional trading range. And the stock’s momentum could slow as a program to settle warrants goes away.

“Since May CLB has entered four accelerated programs to settle roughly 6.6 million warrants originally scheduled to settle over a 20 day period ending in Jan. 2012. We believe shares have been shorted against these warrants, resulting in short covering when the warrants are settled, driving volume – and arguably the shares – higher.”


http://blogs.barrons.com/stockstowatchtoday/2011/09/14/core-labs-shouldnt-be-a-core-holding-analyst/?mod=yahoobarrons