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