3 High Growth Stock, Bearish Options and Undervalued by Analyst Estimates

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Compiled by Luis Gonzalez: To get to this list, we started with a universe of high growth stocks, and then narrowed it down by only focusing on stocks that have a large number of open put option positions relative to call option positions, i.e. a high Put/Call ratio. Additionally, we compared the current price against the average analyst target price and found 3 companies that are undervalued under this approach.

This may be a crude way to find undervalued companies, but it shows you that even though options traders are bearish these names, analyst think otherwise. What do you think? Are these stocks set for a rally? Full details below.

All data sourced from Finviz.


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Sorted by discount to average analyst target price.

1. ChinaCast Education Corporation (CAST): Education & Training Services Industry. Market cap of $350.95M. Sales have grown by 33.88% over the past 5 years, EPS have grown by 54.61% over the past 5 years, and EPS is projected to grow by 30.0% over the next 5 years. Call open interest at 115 contracts vs. put open interest at 575 contracts (Put/Call ratio at 5.0). Price at time of writing $7.14 vs. target price of 12.17 (discount of 41.33%). Short float at 2.6%, which implies a short ratio of 2.8 days. The stock has lost -5.87% over the last year.

2. Medifast Inc. (MED): Specialty Retail, Other Industry. Market cap of $374.86M. Sales have grown by 43.37% over the past 5 years, EPS have grown by 42.27% over the past 5 years, and EPS is projected to grow by 25.0% over the next 5 years. Call open interest at 8,348 contracts vs. put open interest at 14,203 contracts (Put/Call ratio at 1.7). Price at time of writing $24.73 vs. target price of 38.67 (discount of 36.05%). Short float at 20.8%, which implies a short ratio of 8.63 days. The stock has gained 44.27% over the last year.

3. Cninsure Inc. (CISG): Insurance Brokers Industry. Market cap of $877.83M. Sales have grown by 102.44% over the past 5 years, EPS have grown by 31.91% over the past 5 years, and EPS is projected to grow by 24.97% over the next 5 years. Call open interest at 4,968 contracts vs. put open interest at 12,896 contracts (Put/Call ratio at 2.6). Price at time of writing $17.29 vs. target price of 26.77 (discount of 35.41%). Short float at 14.78%, which implies a short ratio of 6.06 days. The stock has gained 3.63% over the last year.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: CAST , CISG , MED

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