Schaeffer's Trading Floor Blog

Stocks On the Move: AOL, Inc., Lululemon Athletica inc., and Globus Medical Inc

AOL, LULU, and GMED are moving sharply in Wednesday's trading

by 8/6/2014 1:31 PM
Stocks quoted in this article:

U.S. stocks are on the mend this afternoon, as traders seek bargains in the wake of the recent broad-market slump. Among the names making significant moves are Internet issue AOL, Inc. (NYSE:AOL), yoga apparel maker Lululemon Athletica inc. (NASDAQ:LULU), and medical device manufacturer Globus Medical Inc (NYSE:GMED). Here's a quick look at how AOL, LULU, and GMED are faring on the charts today.

  • AOL is 7.6% higher at $41.96, thanks to a stronger-than-expected quarterly earnings report. The firm said advertising revenue in its third-party platform skyrocketed 60%, and the company approved a $150 million share repurchase plan. A mass exodus of bears could help propel AOL even higher, as short interest represents nearly a week's worth of pent-up buying demand, at the stock's average pace of trading. Plus, just half of the 14 analysts following AOL, Inc. consider it worthy of a "buy" or better endorsement, leaving the door wide open for potential upgrades to lure even more buyers to the table.

  • LULU is 3.2% higher at $39.95, amid unconfirmed rumors of a potential buyout bid in the works. While some sources hint at a possible offer from VF Corp (NYSE:VFC), others are looking at Nike Inc (NYSE:NKE). In any case, demand for LULU's short-term options is on the rise, as the stock's 30-day at-the-money implied volatility has popped 4.1% to 35.8%. Option bulls are scooping up Lululemon Athletica inc. calls at four times the average intraday clip, with buy-to-open activity detected at the weekly 8/8 40-strike call.

  • GMED is 16.7% lower at $18.78, after the firm cut its full-year sales forecast below the Street's expectations. As such, the shares of GMED are now in the red for 2014, and analysts are downwardly revising their opinions. More specifically, Canaccord Genuity cut its price target on the stock to $24 from $27, while Piper Jaffray reduced its target to $26 from $28. More negative attention could be on the horizon for Globus Medical Inc, as the consensus 12-month price target of $27.86 represents a premium of 48.2% to the security's current price, and stands in record-high territory. Likewise, five out of six brokerage firms consider GMED a "strong buy."

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