Stocks To Watch Today: NQ Mobile, CBS, Seadrill...

by: SA Stocks To Watch


In this new feature, SA contributors highlight stocks investors should watch today for unusual movement, with their bias (long/short), and a brief explanation of why.

Stocks are listed alphabetically in order of their symbols. The name of the author of each Stock To Watch can be found after the name of the stock and his/her bias. Clicking on a contributor's name takes you to more articles by that contributor.

Most authors follow comments actively, so if you have a question, ask it in the comment stream or direct message the author if you prefer.

If anyone tries out Chris DeMuth's CBS/CBSO share exchange, let us know how it goes. Chris, a systemic arbitrageur, has a track-record with these kinds of opportunities.

ProShares Ultra Silver (NYSEARCA:AGQ) - long - Ken McGaha (long AGQ)

  • Silver has established a solid uptrend over the past few months.
  • The price of silver is up in overseas trading this morning.
  • AGQ is structured to leverage movements in the price of silver on a 2:1 basis; allowing holders to double the gains in the metal itself.

AeroVironment (NASDAQ:AVAV) - short - Jordan Flannery (no position)

  • Despite AVAV’s strong earnings report yesterday, the drone manufacturer still trades for 59x 2015 earnings estimates and the company is expecting low- to mid-single-digit revenue growth for fiscal 2015.
  • Look for AVAV’s remaining post-earnings pop to fade as today’s trading session progresses.

AeroVironment (AVAV) - long - Bill Maurer

  • Company announced revenue and EPS numbers that beat analyst expectations.
  • Revenue guidance for the fiscal year was solidly ahead of estimates.
  • Estimate and price target hikes likely.

CBS (NYSE:CBS) – long – Chris DeMuth Jr.

  • You can exchange CBS for CBSO at a 7% discount on Wednesday.
  • If you own fewer than 100 shares, you can avoid proration.
  • CBSO received a favorable REIT ruling from the IRS for a conversion.
  • CBSO can be lent out at a very high rate for added yield.

Tableau Software (NYSE:DATA) – short – Chris Lau

  • This momentum play fell 9.97% yesterday but failed to regain lost ground.
  • Short float is severe, at 12% compared to 5.92% for Splunk (NASDAQ:SPLK) and TIBCO Software (NASDAQ:TIBX) at 2.02%.
  • Tableau will keep dropping as market resumes its negative shift in sentiment and as investors avoid excessively valued software companies at risk of slower enterprise spending in the 2H of this year.

Dendreon (NASDAQ:DNDN) - short - Bill Maurer

  • Stock failed to break above $2.50 and reach 100-day moving average.
  • Another sharp rally quickly broke down.
  • Support not likely until 50-day moving average reached at $2.20.

DragonWave (NASDAQ:DRWI) – short (07/09/14 to 07/10/14) - The Deep Value Investor (long DRWI)

  • Stock is up more than +60% over last month.
  • The stock's price has likely got ahead of itself the last month on increased guidance from the company and analyst upgrades.
  • Earnings to be reported after close 07/09/2014. Anything short of a major earnings blow-out will likely cause stock to decline 20% in short term. Long-term outlook is bright however.

Lloyds Banking Group (NYSE:LYG) - long - Antonio Carradinha (no position)

  • While fundamentals are strong share prices are consolidating.
  • Investec reaffirms a Buy recommendation for LYG with a price target of 85p ($5.80 per ADR).
  • Yesterday’s closing price has probably created a setup for a move upward today.

Markit Ltd. (MRKT) - long - Don Dion

  • The 25-day quiet period on underwriter research related to MRKT will conclude on July 13, allowing the firm's IPO underwriters to release research reports on July 14.
  • The firm has maintained impressive income figures throughout this growth, bespeaking solid management.
  • MRKT’s solid list of underwriters should boost the stock’s price leading up to the quiet period expiration, opening a buying opportunity for investors. Additional details here.

NQ Mobile (NYSE:NQ) - long - Pat Stout

  • Former NQ Chair of Audit Committee -- Ms. Ying Han stepped down from Wuxi board for personal reasons (source). When Ms. Han stepped down from the NQ board some analysts/bloggers had questioned the validity of the stepping down for personal reasons.
  • NQ stock has recently seen massive volume and a large short interest. Short covering might push stock price higher.
  • Encouraging news on timing or scope of audit progress might be seen in a positive light; this is a high-risk trade idea with elevated risk-reward profile.

NQ Mobile (NQ) - long - Bill Maurer

  • Stock down nearly 39% as extra audit work is needed.
  • Those speculating on big gains will start to add at these low levels.
  • Huge short interest could lead to squeeze if stock starts to turn higher.

Priceline (NASDAQ:PCLN) - short - Bill Maurer

  • Momentum stocks have pulled back again.
  • Stock won't see support at 50-day moving average until it falls another 2%.

Seadrill (NYSE:SDRL) – long – Jordan Flannery (no position)

  • After announcing a convertible bond issuance yesterday and having their shares fall by 5.2%, SDRL announced this morning that the company is canceling the offering.
  • Look for shares of SDRL to rebound and make up for yesterday’s losses in today’s trading session.
  • Shares of SDRL are up by 3.7% in Oslo trading this morning.

Silicon Image (NASDAQ:SIMG) - short - David Zanoni

  • The company guided significantly lower for Q2 revenue of $58.5M-$60.5M down from original estimates of $71M-$76M.
  • This was the result of weaker than expected mobile IC shipments and a delay in the receipt of HDMI revenue.
  • The stock is likely to take a tumble today as this will have a significant negative impact on Q2 earnings.

Telus (NYSE:TU)- long - Brad Kenagy (no position)

  • Shares of Canadian communications company Telus were down 2.12% today after BofA/Merrill downgraded Telus because the Canadian government came out with a report that noted they would sell spectrum to smaller competitors.
  • The price target that BofA/Merrill gave for shares of Telus was $36/share which is slightly below the closing price of $36.05.
  • In addition, when looking at a technical chart of Telus, you can see that the stock tested its upward trending support level and closed above it. With the market in a possible correction, Telus being very near its analyst price target, holding support, and its 3.77% could see a move upward tomorrow from dividend investors, and technical traders.

Twitter (NYSE:TWTR) - long - Sean Chandler

  • Twitter has been a momentum stock that had a nice rally from its 52-week low of $29.51 to around $43.
  • However, a correction has been in play for the last several sessions and yesterday the stock closed 7% lower to $37.41; currently a 13% discount from the previous $43 rally.
  • Those looking for a point of entry, short-term or long-term, may find this as a pleasing opportunity.

Once the market opens, you can track how today's "Stocks To Watch" are performing here. Send in your own ideas for tomorrow's Stocks To Watch, email before 6:00 AM ET tomorrow.

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