Options Wonderland

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10-10-2012 ups & downs

08:22 SUMRX Gapping up/down: YUM +3.8%, COST +2.4% following earnings, TRLG +20.9%... CMI -4.9%, AVT -4.5%, CVX -1.8%, AA -0.8% following earnings/guidance

Gapping up:
In reaction to strong earnings/guidance: MG +4.8% (light volume), YUM +3.8% (also upgraded to Buy from Outperform at Credit Agricole), GLUU +3%, COST +2.4%, FDX +2%, (announces programs targeting $1.7 bln in annual profit improvement by end of Fiscal 2016; reaffirms Q2 and FY guidance).

Select metals/mining stocks trading higher: HMY +2.4%, MT +1.1%, AG +0.6%, RIO +0.4%, .

Other news: TRLG +20.9% (confirms Exploration of Strategic Alternatives), CLNT +18.1% (receives $2.2 mln purchase orders for Airflow Dyeing Machines), AUQ +10.6% (expands Flame & Moth deposit: reports grades up to 71 ounces per ton silver over 2.9 meters, mineralized intervals to 7.4 meters grading 25.7 ounces per ton silver, and accompanying gold),GEVO +2% (awarded patent covering low-cost technology that removes isobutanol from fermentation broth).

Analyst comments: QLIK +3.6% (upgraded to Buy from Neutral at UBS), RLJ +1.9% (upgraded to Outperform from Sector Perform at RBC Capital), ANF +1.6% (upgraded to Overweight from Neutral at Piper Jaffray), RL +1% (Polo Ralph Lauren upgraded to Overweight from Neutral at Piper Jaffray ), QCOM +0.5% (upgraded to Outperform from Neutral at Exane BNP Paribas), AUY +0.4% (initiated with a Overweight at Morgan Stanley)


Gapping down:
In reaction to disappointing earnings/guidance: FOE -14%, (revises earnings guidance and expects impairment charges; exploring strategic options for solar pastes business, downgraded to Equal Weight from Overweight at First Analysis), BLDP -9.4% (thinly traded), ESE -6.2% (also downgraded to Hold at Needham), HELE -6.1%, CMI -4.9%, AVT-4.5% (light volume), CVX -1.8%, AA -0.8%.

A few CMI peers are under pressure: NAV -3%, JOY -1.6%, PCAR -1.4%, CAT -1.2%, DE -0.9%

Other news: CWH -7.9% (announced new quarterly Common Share dividend rate of $0.25/share, reduction from the quarterly dividend rate of $0.50/share), LXP -4.2% (commenced an underwritten registered public offering of 15,000,000 common shares), HRB -3.5% (discloses that Fed capital reserve requirements may restrict its capital allocation; exploring alternatives to cease being a savings and loan holding company), VRNG -3.1% (continuing to pullback), DYN -2.4% (still checking), MRC -2.2% (announces shelf registration statement on behalf of selling shareholder), STZ -0.8% (following late sell-off on antitrust speculation for AB InBev and Modelo deal), VTNC -0.6% (commented on the Schedule 13D filings made by Clarke Inc. with respect to its shareholdings in Vitran).

Analyst comments: MNST -3.4% (downgraded to Hold from Buy at Stifel Nicolaus ), SNN -2.3% (ticking lower, initiated with a Sell at Societe Generale), KGC -2.1% (downgraded to Underweight from Equal-Weight at Morgan Stanley), VIAB -1.6% (downgraded to Underperform from Mkt Perform at Bernstein), SAP -1.4% ( downgraded to Equal Weight from Overweight at Barclays), JCI -1.3% (downgraded to Neutral from Buy at BofA/Merrill), FITB -0.8% (downgraded to Neutral from Buy at BofA/Merrill), AEO -0.7% (downgraded to Neutral from Overweight at Piper Jaffray), HD -0.7% (downgraded to Perform at Oppenheimer based on valuation).
07:54 KERX Keryx Biopharma target raised to $5 at Ladenburg Thalmann (2.75 )

Ladenburg Thalmann raises their KERX tgt to $5 from $3. They continue to believe Zerenex represents an undervalued asset in Phase III development. They note data from the long-term Zerenex Phase III study (data expected Q4 2012) represents a significant near-term event for KERX. Their base case scenario encompasses Zerenex's current product profile (lower pill burden, improved safety profile: no risk of elevated calcium or heavy metal accumulation) while providing similar (and potentially better) efficacy and tolerability than currently marketed phosphate binders.