Stocks To Watch: Groupon, Transocean, Westlake Chemical

Includes: GRPN, RIG, WLK
by: SA Stocks To Watch


SA contributors highlight stocks to watch for unusual movement, their bias (long/short), and brief comments.

Stocks are listed alphabetically by symbol. Click on the contributor's name to read more articles by that author.

Discuss today's stocks and ask contributors questions in the comments.

Track how today's Stocks To Watch are performing here. To send in your own ideas for tomorrow's Stocks To Watch, email before 6:00 AM ET tomorrow.

Groupon (NASDAQ:GRPN) - Short - Jeff Himelson

  • Groupon is set to announce its quarterly report today.
  • Margins have declined from 84% at the time of the IPO to 51% last quarter and I expect the trend to continue.
  • Investors will get color on the roll-out of the Gnome POS system, which I expect to not gain much traction as Square retains a first mover advantage.
Transocean (NYSE:RIG) – Long – Shiv Kapoor
  • RIG was downgraded by Deutsche Bank, with a price target of $27. Well hey: Chicken Little said the sky just fell: the stock did fall.
  • Don’t scoff at Deutsche Bank’s call they got it right in February 2013.
  • Earlier in July, RIG was downgraded by Goldman Sachs with a price target of $29.
  • Jefferies, whom I rate as the best group for the offshore drilling industry, downgraded RIG’s price target to $41 during May 2014.
  • This stock is not for the faint-hearted, but there is blood flowing on the street. The stock is cheap for long-term investors – earnings and earnings expectations are well below potential earnings.
  • During 2014, I’ve looked at Transocean here and here, and will likely look at it again after earnings which are due to be released after hours 8/6/14.

Westlake Chemical (NYSE:WLK) - Long - Don Dion

  • WLK reports earnings today (8.5) before-market.
  • For the past three quarters, on positive results, WLK has gapped up an average of 1.43% and moved up an average of 1.63% over the day.
  • Given this promising pattern, it is likely WLK could move up again today.