Schaeffer's Trading Floor Blog

Highs & Lows: Dollar General, Whole Foods, and Walgreen

DG, WFM, QCOR, PETM, and DYAX advance to new peaks, while WAG languished to a new low

by 6/20/2012 2:21 PM
Stocks quoted in this article:

The major market indexes are mixed following this afternoon's much-anticipated announcement from the Federal Reserve. The Fed announced it will extend its Operation Twist program by an additional $267 billion, pushing U.S. equities back toward breakeven. Against this backdrop, a number of stocks have muscled their way north. At last check, the Nasdaq has 61 stocks reaching new heights, versus just 13 falling to new lows, while the New York Stock Exchange (NYSE) shows 75 equities tagging fresh highs, and six stocks finding new bottoms. Among the stocks touching 12-month highs or lows in today's trading are Dollar General Corp. (DG ), Whole Foods Market, Inc. (WFM), Questcor Pharmaceuticals, Inc (QCOR), PetSmart, Inc. (PETM), Dyax Corp. (DYAX), and Walgreen Company's (WAG).

Notable Stocks at Annual Highs

  • Dollar General Corp. (DG - 52.44) has maintained Monday's momentum, jumping to a new all-time high of $52.52 in today's session. The discount retail chain yesterday announced plans to build a distribution center in Berks County, Pa. The approximately $100-million facility is expected to house roughly 500 employees. Today's push higher is reflective of DG's longer-term technical prowess. In 2012, the stock has added an impressive 27%. From a longer-term perspective, DG is sitting on a 52% year-over-year gain. Despite DG's upward momentum, options players have tended toward the bearish side of the aisle. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.94 ranks in the 65th percentile of its annual range, suggesting that near-term traders are more put-heavy than usual. Plus, DG's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.60 ranks higher than 71% of other such annual readings, implying that bearish bets have been picked up at a faster-than-usual pace in recent weeks.

  • Whole Foods Market, Inc. (WFM - 95.71) resumed its run higher this morning, with the equity hitting a fresh all-time peak of $96.38 in early trading. The notable mark shouldn't surprise many, with the security boasting an already-formidable 37.5% year-to-date gain. Today's bullish buzz may have been prompted by upbeat analyst attention from Cantor Fitzgerald. Specifically, the brokerage firm placed an optimistic $104 price target on the stock, while starting it with a "buy" rating. Despite Cantor Fitzgerald's hopeful disposition, skepticism toward WFM from the analyst community remains. The equity currently sports a consensus 12-month price target of $96.81, just a stone's throw from its current perch. Plus, six out of 20 analysts deem the equity a tepid "hold."

  • Wall Street continues to lap up the love bestowed on Questcor Pharmaceuticals, Inc (QCOR - 51.32) by analysts last Friday, pushing the stock to an all-time high of $52.10 today. However, QCOR has been impressive on the charts for some time, with the shares tacking on 119.3% during the previous 52 weeks. Plus, the equity has trumped the broader S&P 500 Index (SPX) by more than 37 percentage points over the past 60 trading sessions. More recently, QCOR toppled its 10-day moving average on June 6, and has since enjoyed a steady lift higher atop this ascending trendline.

  • UBS raised its price target on PetSmart, Inc. (PETM - 68.98) by $10 to $77 this morning, giving the stock a clear shot at a new annual apex. In the first 15 minutes of trading, PETM tackled the $69.97 mark, stopping just short of the psychologically significant round-number $70 level. Over the long-term, the equity has added a formidable 54.4% on a year-over-year basis. The outperforming stock could benefit from additional upgrades and/or price-target hikes should it continue its run higher. Among covering analysts, 12 still maintain a lukewarm "hold" suggestion toward the stock, while its average 12-month price target of $64.94 stands at a discount to the milestone it touched today.

  • Biopharmaceutical concern Dyax Corp. (DYAX - 2.06) rose to a new annual high of $2.20 today, as the analysts at Needham started the equity at "buy," and placed a $3.50 price target on the stock. On Friday, DYAX announced it would discontinue the Phase 2 clinical trial of its angioedema drug Ecallantide. Technically, the shares have risen more than 50% in 2012, and the security is currently being ferried higher by its 10- and 20-week moving averages. It seems that not everyone on the Street is convinced of DYAX's tenacity, though. Short sellers increased their bearish exposure by 6.8% in the latest reporting period, and short interest now accounts for a healthy 5.2% of the stock's float. It would take more than 13 days to cover these shorted shares, at DYAX's average daily trading volume.

Notable Stocks at Annual Lows

  • Walgreen Company's (WAG - 29.04) woes continue, with the stock falling to a new annual nadir of $28.53 today. Wall Street is responding negatively to the wash of downgrades and price-target cuts WAG was slapped with this morning, as concern surfaced about the pharmacy's recent expansion efforts. The equity has struggled for some time on the charts, with the security staring down a 35% year-over-year deficit. WAG could be facing additional headwinds in the short term, with 11 out of 20 analysts still maintaining a "buy" or "strong buy" recommendation toward the stock -- leaving the door wide open for additional downgrades.

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