Costco Drops on Margin Concerns; Apple iPhone Batteries Under Scrutiny

By Emma Duncan / October 06, 2017 / www.schaeffersresearch.com / Article Link

U.S. stocks are tradinglower this morning, after a surprise September jobs report. Among the stocks making moves this morning are membership warehouse Costco Wholesale Corporation (NASDAQ:COST), software company Synchronoss Technologies, Inc. (NASDAQ:SNCR), and technology powerhouse Apple Inc. (NASDAQ:AAPL). Here's a closer look at what's moving shares of COST, SNCR, and AAPL.

COST's Shrinking Margins Overshadow Q4 Profit Beat

Costco reported shrinking margins, overshadowing a fiscal fourth-quarter earnings beat. In addition, Morgan Stanley downgraded COST stock to "equal weight" from "overweight," and cut its price target to $165 from $190. Several more brokerage firms also cut their price targets on COST, amid concerns about membership renewal rates. Shares of the discount bulk-retailer were last seen trading down 5.1% at $158.56, and are set to end the week beneath their 10-week moving average for the first time since August.

Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) show options traders were leaning toward the bulls' camp ahead of earnings, displaying a heavy preference for calls over puts during the past 10 weeks. COST's 50-day call/put volume ratio of 1.71 ranks in the 97th percentile of its annual range.

SNCR Stock Jumps Amid Revived Hopes for Siris Bid

Synchronoss Technologies stock isup 27% at $13.65, after the firm said it's resuming talks with Siris Capital, which abandoned a bid back in September. However, SNCR shares still have a ways to go before filling the bear gap from that day, prior to which the stock was trading around $16.50.

At the ISE, CBOE, PHLX, Synchronoss sports a 10-day call/put volume ratio of 18.16, ranking in the 90th percentile of all other ratios in the past 12 months. This suggests calls have been bought to open over puts at a faster-than-usual clip during the past two weeks.

Apple Investigating iPhone Battery Reports

Apple shares are down 0.4% at $154.82, amid reports of the new iPhone 8 battery swelling, causing the casing to separate. While the broader Dow and Nasdaq assail new heights, the FAANG stock has dropped 6% since its Sept. 1 record high of $164.94, yet three-quarters of analysts following the stock carrying "buy" or "strong buy" recommendations.

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