Schaeffer's Trading Floor Blog

Stocks On the Move: Skilled Healthcare Group, Inc., DepoMed Inc., and Elizabeth Arden, Inc.

SKH, DEPO, and RDEN are moving sharply in Tuesday's trading

by 8/19/2014 1:21 PM
Stocks quoted in this article:

Heading into the final hours of today's trading, three of the biggest market movers are assisted-living issue Skilled Healthcare Group, Inc. (NYSE:SKH), pharmaceutical stock DepoMed Inc. (NASDAQ:DEPO), and cosmetics concern Elizabeth Arden, Inc. (NASDAQ:RDEN). Here's a quick roundup of how SKH, DEPO, and RDEN are performing on the charts so far.

  • SKH is soaring today in the wake of some well-received M&A news -- up 20.7% at $7.42, after earlier tagging a fresh 52-week peak of $7.90. Thanks to this bull gap, shares of SKH are now sitting more than 54% above where they started the year. Heading into the session, sentiment surrounding Skilled Healthcare Group, Inc. was tilted toward the bearish side. Short interest, for example, accounts for a healthy 4.2% of the stock's available float, and would take more than nine sessions to cover, at SKH's average daily pace of trading. Elsewhere, the security's Schaeffer's put/call open interest (SOIR) of 0.81 ranks in the 93rd percentile of its annual range, meaning short-term option speculators have rarely been more put-heavy toward SKH.

  • A favorable court ruling has sent shares of DEPO nearly 9% higher this afternoon. Longer term, the equity has more than doubled on a year-over-year basis, but has recently run into resistance around the $15 mark. In fact, the stock peaked at $15.11 earlier today, before easing back to its current perch at $14.36. In the near term, this area could continue to contain DepoMed Inc.'s rally attempts, as peak call open interest in the front-month series resides at the September 15 strike. Simply stated, this heavy accumulation of call open interest could translate into options-related resistance, as the hedges related to these bets unwind ahead of expiration on Friday, Sept. 19.

  • RDEN is having a terrible day both on and off the charts. Specifically, the stock has plunged 23.8% -- and earlier bottomed at a four-year low of $14.65 -- after disappointing sales from a number of its high-profile-celebrity perfumes caused the company to post its biggest quarterly loss on record. Today's dreary price action is just more of the same for Elizabeth Arden, Inc., which is down almost 58% year-to-date -- and additional losses could be on the horizon. At present, the average 12-month price target for RDEN of $26.60 stands at a steep 78% premium to the stock's current perch at $14.94, leaving the door wide open for a round of price-target cuts in the face of the equity's technical struggles.

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