Contrarian Ideas: 8 Companies Reducing Guidance With Bearish Options Sentiment

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 |  Includes: EIX, ENR, GEF, HST, ISIL, NWN, THQIQ, VCI
by: Kapitall

Here we present eight companies that have reduced earnings guidance in 2011 below analysts’ estimates. All of these companies have also seen sharp increases in their open Put/Call ratios within the last two weeks (between 3/10 and 3/23).

Are these stocks contrarian opportunities to buy in, or is there more downside to come? Read below, using this list as a starting-off point for your own analysis.

Put/Call data sourced from Schaeffer’s, earnings guidance data sourced from Briefing.com, all other data sourced from Finviz.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


List sorted by increase in put/call ratio. (Note: All put/call ratios are currently at their upper annual ranges.)

1. Energizer Holdings Inc. (NYSE:ENR): Personal Products Industry. Market cap of $1.24B. Put/Call ratio increased 200.00% over the last two weeks, from 0.92 to 2.76. Guided FY11 at $5.10-5.30 vs. estimate of $6.12. The stock has gained 2.43% over the last year.

2. Northwest Natural Gas Company (NYSE:NWN): Gas Utilities Industry. Market cap of $310.26M. Put/Call ratio increased 182.58% over the last two weeks, from 1.55 to 4.38. Guided FY11 at $2.45-2.65 vs. estimate of $2.83. Short float at 12.21% (equivalent to 5.69 days of average volume), implying the stock is a short squeeze candidate. The stock is currently stuck in a downtrend, trading 14.8% below its SMA20, 18.77% below its SMA50, and 5.55% below its SMA200. The stock has performed poorly over the last month, losing 19.01%.

3. Host Hotels & Resorts Inc. (NYSE:HST): REIT. Market cap of $1.39B. Put/Call ratio increased 132.74% over the last two weeks, from 1.68 to 3.91. Guided FY11 at $0.87-0.92 vs. estimate of $0.97. The stock is a short squeeze candidate, with a short float at 12.26% (equivalent to 8.02 days of average volume). The stock has lost 4.33% over the last year.

4. Valassis Communications Inc. (NYSE:VCI): Marketing Services Industry. Market cap of $1.45B. Put/Call ratio increased 124.51% over the last two weeks, from 1.02 to 2.29. Guided FY11 at 2.76 vs. estimate of $2.87. The stock has lost 18.03% over the last year.

5. Edison International (NYSE:EIX): Electric Utilities Industry. Market cap of $4.70B. Put/Call ratio increased 115.00% over the last two weeks, from 1 to 2.15. Guided FY11 at $2.60-2.90 vs. estimate of $3.00. The stock has gained 6.% over the last year.

6. THQ Inc. (THQI): Multimedia & Graphics Software Industry. Market cap of $3.05B. Put/Call ratio increased 110.81% over the last two weeks, from 0.37 to 0.78. Guided Q4 at $0.05-0.15 vs. estimate of $0.34. The stock has gained 23.79% over the last year.

7. Greif, Inc. (NYSE:GEF): Packaging & Containers Industry. Market cap of $11.63B. Put/Call ratio increased 67.67% over the last two weeks, from 1.33 to 2.23. Guided FY11 at $4.50-4.75 vs. estimate of $4.92. The stock is a short squeeze candidate, with a short float at 6.01% (equivalent to 5.64 days of average volume). The stock has gained 21.59% over the last year.

8. Intersil Corporation (NASDAQ:ISIL): Semiconductor Industry. Market cap of $11.90B. Put/Call ratio increased 56.20% over the last two weeks, from 1.21 to 1.89. Guided Q1 at $0.13-0.16 vs. estimate of $0.17. The stock has gained 11.13% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.