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Behind the Headlines: Apple, Boston Beer, Gilead Sciences, and Harrah's Entertainment Face Market Ups and Downs

Strategic Insights

— 2 min read

Cincinnati's Schaeffer's Investment Research recently published a report, "Behind the Headlines," focusing on Apple Computer (NASDAQ:AAPL), Boston Beer Company (NYSE:SAM), Gilead Sciences (NASDAQ:GILD), and Harrah's Entertainment (NYSE:HET). The report analyzes newsworthy stocks generating significant attention on Wall Street. These stocks have seen various reactions to recent market and industry developments, including downgrades, buyout proposals, and significant price movements. As a result, options players and investors are closely watching these stocks for potential opportunities and challenges.

Key Takeaways:

  • Apple Computer (AAPL) shares have pulled back after a downgrade from Citigroup, but the stock's 20-day moving average has contained the decline, below which AAPL has closed just once since mid-July.
  • Options players continue to bet against AAPL shares, with a Schaeffer's put/call open interest ratio (SOIR) of 1.26, five percentage points shy of a new annual high.
  • Boston Beer Company (SAM) shares are trading more than four percent lower after being downgraded by Prudential, with over 14 percent of the company's available float sold short, resulting in a short-interest ratio of 9.7 days to cover.
  • Gilead Sciences (GILD) recently offered to purchase Myogen (MYOG) at a 50-percent premium, which may help expand GILD's pulmonary franchise; however, the acquiring company has lost some footing, dropping more than five percent, but may receive support near the 64 level.
  • Harrah's Entertainment (HET) shareholders have seen a 15 percent spike in shares upon receiving a buyout proposal from private equity firms, reportedly worth $81 per share in cash, or a 22-percent premium over Friday's close.

Statistics:

  • AAPL shares have closed below their 20-day moving average just once since mid-July.
  • The Schaeffer's put/call open interest ratio (SOIR) for AAPL is 1.26, five percentage points shy of a new annual high.
  • Over 63,000 contracts in the October series and almost 20,000 contracts in the November series have open interest at the 80 call strike in AAPL.
  • SAM shares have slipped below their 50-day moving average.
  • GILD has lost over five percent in value following the announcement of the Myogen purchase.
  • HET shares have spiked 15 percent on receiving a buyout proposal from private equity firms.

Sources:

  • "Behind the Headlines" from Schaeffer's Investment Research
  • Apple Computer (NASDAQ:AAPL)
  • Boston Beer Company (NYSE:SAM)
  • Gilead Sciences (NASDAQ:GILD)
  • Harrah's Entertainment (NYSE:HET)
  • Citigroup
  • Prudential
  • Deutsche Bank
  • Schaeffer's Investment Research (www.SchaeffersResearch.com)
  • Bernie Schaeffer
  • Forbes
  • Barron's

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