Schaeffer's Trading Floor Blog

Biggest Movers: Lululemon Athletica inc., Organovo Holdings Inc, and Restoration Hardware Holdings Inc

LULU, ONVO, and RH are moving sharply in Thursday's trading

by 6/12/2014 11:46 AM
Stocks quoted in this article:

As we approach midday, three of the top market movers are yoga apparel retailer Lululemon Athletica inc. (NASDAQ:LULU), biological research issue Organovo Holdings Inc (NYSEMKT:ONVO), and home furnishings merchant Restoration Hardware Holdings Inc (NYSE:RH). Here's a quick roundup of how this trio of names is performing on the charts so far.

  • LULU is off nearly 16% today at $37.50, after cutting its full-year earnings forecast this morning. Earlier, in fact, the stock hit a new three-year low of $37.00, and received a pair of downgrades at William Blair and Stifel. Additional bearish brokerage notes are possible, too. Currently, Lululemon Athletica inc. has received 13 "buy" or better opinions from analysts, compared to 11 "holds" and one "sell" recommendation; also, its average 12-month price target of $56.68 stands at a greater than 50% premium to the current price. If LULU gets hit with additional downgrades and/or price-target reductions, the shares could face even lower lows.

  • ONVO has shed 6% at midday to trade around $6.84, thanks to this morning's poorly received fiscal 2014 financial results. With the move south, the stock is now looking at a year-to-date deficit of roughly 38%. Understandably, short sellers have been swarming Organovo Holdings Inc, as more than one-quarter of its float is sold short. At the security's average daily trading volume, it would take nearly four weeks to buy back all of these bearish bets.

  • Lastly, RH has rallied nearly 14% to $81.27 today -- and earlier tagged a fresh record peak of $83.75 -- following last night's fiscal first-quarter earnings beat, and subsequent round of price-target hikes. The equity has been a technical outperformer for some time; for instance, it has outperformed the broader S&P 500 Index (SPX) by 10 percentage points in the last month. Nevertheless, short interest rose 13.5% during the last two reporting periods, and now accounts for over 15% of Restoration Hardware Holdings Inc's float. At the stock's average daily trading pace, it would take almost seven sessions to cover these shorted shares. Suffice it to say, RH may be on the verge of a short-squeeze situation.

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