Some notable analyst changes and stock activity:
- Goldman upgraded Posco to buy and added them to their conviction buy list. They also increased their target price to $150.
- Lazard upgraded Dryships from a hold to a buy.
- Meredith Whitney downgrades shares of Goldman Sachs from buy to neutral with a $186 price target.
- Goldman Sachs downgrades Meredith Whitney after her 15 minutes of fame run out.
- Deutsche Bank initiates coverage on Citibank with a buy and a $5.50 price target.
- Credit Suisse upgrade credit card companies Visa and Mastercard from neuitral to outperform. They clearly feel better about consumer spending.
- Some big money is flowing into call options of Costco:
COST – Costco Wholesale Corp. – Shares of the merchandise warehouse operator rose nearly 1.5% during the trading session to $58.77. A chunk of calls purchased in the front-month today indicates some investors expect continued upward movement in shares by expiration this Friday. Approximately 8,000 calls were purchased at the October 60 strike for 15 cents apiece. Shares of COST must increase at least 2% to $60.15 for investors to amass profits.
- Goldman also noted some takeover candidates based on their analysis that M&A is about to get hot again:
Goldman Sachs highlighted 14 companies with the highest probability of receiving a bid, including Devon Energy Corp., the biggest independent U.S. oil company, AK Steel Holding Corp., the fourth-largest U.S.-based steelmaker, and Brocade Communications Systems Inc., the largest maker of networking gear that connects storage computers.
Other companies cited by Goldman were Edwards Lifesciences Corp.; WellCare Health Plans Inc.; Health Net Inc.; Heartland Payment Systems Inc.; Amdocs Ltd.; TIBCO Software Inc.; Citrix Systems Inc.; Red Hat Inc.; CommValut Systems Inc.; SuccessFactors Inc.; Leap Wireless International Inc.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.