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Option Update: Precision Drilling and Grey Wolf volatility flat into merger

Precision Drilling (NYSE: PDS) announced the purchase of Grey Wolf (NYSE: GW) for $5.00 in cash and 0.1883 newly-issued Precision trust units for each GW share.

The transaction will establish PDS as one of the largest U.S. land drillers with a combined fleet of 371 drilling rigs.

PDS September option implied volatility of 46 is near its 26-week average of 43 according to Track Data, suggesting non-directional price movements.

GW overall option implied volatility of 45 is near its 26-week average, suggesting non-directional price movements.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Analyst initiations: STP, FSLR, STD, INAP and NTGR

MOST NOTEWORTHY: Suntech Power, First Solar, Banco Santander, Internap and NetGear were today's noteworthy initiations:
  • Merriman initiated shares of Suntech Power (NYSE: STP) with a Buy rating and believes the company is benefiting from strong worldwide demand for solar PV technology. The firm suggests a potential 12-month stock price range of $56-$64.
  • Merriman also started shares of First Solar (NASDAQ: FSLR) with a Sell rating, as they believe the company's market is limited to ground-based systems because of its cadmium-based technology, which they feel could lead to environment concerns over time.
  • Deutsche Bank resumed coverage of Banco Santander (NYSE: STD) with a Buy rating. The firm is positive on the bank's agreement with ABN Amro (NYSE: ABN) and feels the company has a lack of exposure to risky assets.
  • Jefferies believes Internap (NASDAQ: INAP) is well-positioned with its suite of services to address a rapidly growing market, starting shares off with a Buy rating and $20 target.
  • Nollenberger believes NetGear (NASDAQ: NTGR) provides a pure-play opportunity to capitalize on the global penetration of broadband connectivity. The firm resumed coverage with a Buy rating and $36 target.
OTHER INITIATIONS:

Symbol Lookup
IndexesChangePrice
DJIA-89.2312,801.23
NASDAQ-23.352,903.88
S&P 500-9.311,342.64

Last updated: February 11, 2012: 10:11 AM

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