The Top Ten Analyst Calls of the Week were in shares of Biogen Idec Inc. (NASDAQ: BIIB); Boston Scientific Corporation (NYSE: BSX); F5 Networks, Inc. (NASDAQ: FFIV); First Solar, Inc. (NASDAQ: FSLR); FriendFinder Networks Inc. (NASDAQ: FFN); Molycorp, Inc. (NYSE: MCP); Reynolds American Inc. (NYSE: RAI); SatCon Technology Corporation (NASDAQ: SATC); and SIRIUS XM Radio Inc. (NASDAQ: SIRI). There was also a standout coal sector call, with a particular highlight in Patriot Coal Corporation (NYSE: PCX).
We have shown some added detail on the summaries, included price impact and target data ahead, and included additional color if applicable. If the calls were much more detailed or broader we also included a link to more data.
Biogen Idec Inc. (NASDAQ: BIIB) is a strange situation. We asked on Monday if it was getting too expensive based upon valuation after ISI Group raised its rating to BUY from HOLD on Monday, but shares rose almost 10% for the week to $103.42. The stock actually rose every day this week and it received multiple analyst upgrades: Raised to Hold from Sell at S&P Equity Research; Raised to Outperform from Neutral at Credit Suisse; Raised to Buy from Hold at Deutsche Bank. If it is too expensive, analysts believe it can get much more expensive now.
Boston Scientific Corporation (NYSE: BSX) is supposed to be a winner from J&J’s stent exit but this company remains in perpetual turnaround mode. Moody’s lifted its corporate credit rating to positive, implying that its “Ba1” rating could be moved to Baa3 or better and that would make it investment grade again. We had a duel between two equity analysts this week:
- UBS cut its rating to Neutral from Buy with a $7.65 target;
- Stifel Nicolaus started coverage with a Buy rating and a $9.00 price target.
Shares of Boston Scientific closed up almost 2% at $6.89 for the week but that was after a 2.8% drop on Friday after the UBS cut and with a weak market.
F5 Networks, Inc. (NASDAQ: FFIV) has been a controversial stock since its meteoric rise came tumbling down. This week brought an analyst duel with a key upgrade and a key downgrade: JPMorgan cut its rating to Neutral with a $105 price target while Barclays raised its rating to Overweight with a $125 price target. The stock closed up about 10% at $106.10 on the week and is still down considerably from its $145.76 high.
First Solar, Inc. (NASDAQ: FSLR) had a rough week closing at $116.56 versus $121.55 the Friday before. Morningstar included it in a sector downgrade with a call for more solar weakness ahead. Lower oil prices did not help. JPMorgan also cut estimates and its target to $105 and a company called Maxim Group issued a sell rating. Meanwhile, TheStreet gave a competing list of value stocks in solar with much more upside.
FriendFinder Networks Inc. (NASDAQ: FFN) has been a pig of an IPO. It has been perhaps the worst of the worst. This week marked the end of the quiet period and it picked up two research coverage calls that had impacts on the days but not really on the week. Imperial Capital started it as “Outperform” with a $12 price target on Tuesday and Ladenburg Thalmann started it as Buy with a $14 price target on Wednesday. If either of these firms are correct, FriendFinder could triple from the current imploded post-IPO price. This seems to aggressive for our take and we still wonder with “friends” like that who needs enemies…
Molycorp, Inc. (NYSE: MCP) is one that bucked the market this week and rose by more than 10% to $55.76 from $48.93 the Friday before. Piper Jaffray raised its rating this last Monday on the rare earth player to Overweight from Neutral and gave a $73 price target saying that the rare earth leader had actually seen its shares pull back too much from its peak. JPMorgan also apparently lifted its price target recently to $105 on the company. We called this one a bubble when shares were north of $70… Stay tuned.
Reynolds American Inc. (NYSE: RAI) was defended as a “Buy” with a Zacks #2 rating after the FDA’s newly released cigarette label photos that will be mandatory at the end of 2012. If you look at the weekly chart, this FDA label did actually have some impact on the stocks. This was one of the first defending research calls out there and it noted a lawsuit that the cigarette companies are bringing because the ugly images are actually larger than the label. Reynolds performed worse than Altria, and Lorillard.
SatCon Technology Corp. (NASDAQ: SATC), which makes inverters that convert the DC current produced by solar PV panels to AC current from a rooftop system into the house’s electrical system, was actually the top value pick in the Morningstar solar sector downgrade this week and was given upside potential of about 140% in the call. The price target from Thomson Reuters consensus is $4.75 and this one actually rose more than 10% this week to $2.15.
SIRIUS XM Radio Inc. (NASDAQ: SIRI) was raised to Buy from Accumulate at Janco Partners this week and its price target objective was raised to $2.50 from $2.15. Shares closed at $1.92 the week before and shares reached as high as reached as high as $2.10 on the call but the stock settled in at $1.98 on Friday. Still a 3% gain for the week.
Another call, which was more of a sector call than a real stock call, was Goldman Sachs upgrading its outlook on the coal sector. The standout in the group was Patriot Coal Corporation (NYSE: PCX), where Goldman Sachs raised its status to the much prized Conviction Buy List. Other tickers included were BTU, CNX, WLT, TCK, and even KOL.
As you can see, these are not just all positive research calls. Many calls can be real tales of caution, while others can be wildly positive. Always do your own homework before chasing any single research call, and as we say on every type of investment regardless of what your risk parameters are, “Know exactly what you are investing in.”
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JON C. OGG
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