Schaeffer's Trading Floor Blog

Stocks to Watch Friday: Pandora Media Inc, Monsanto Company, and The Kroger Co.

Analyzing P, MON, and KR ahead of tomorrow's trading

by 4/3/2014 4:59 PM
Stocks quoted in this article:

Momentum names that made notable moves on Thursday and could continue to do so into Friday's session include streaming music provider Pandora Media Inc (NYSE:P), agricultural giant Monsanto Company (NYSE:MON), and grocery store chain The Kroger Co. (NYSE:KR). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Pandora Media Inc (NYSE:P)

Pandora spiked in early trading hours, after reporting upbeat audience metrics for March, but reversed course to land 5.1% below breakeven at $29.85. Meanwhile, overall options activity on P jumped 61% from the expected daily amount, with calls having a healthy lead over puts. The three most popular strikes of the day were April-dated calls, which attracted a mix of buyers and sellers, as some speculators bet on a quick rebound for the shares, while others placed a short-term cap on P's technical performance. Considering 8.4% of the stock's float is sold short, some of the day's call buyers -- particularly at the out-of-the-money April 34 strike -- may have been short sellers hedging against a potential rebound for Pandora.

Monsanto Company (NYSE:MON)

Monsanto's post-earnings gains extended into today's session, after the stock received an upgrade to "overweight" from "neutral" at J.P. Morgan Securities this morning. At the market's close, the shares were 2.3% higher at $117.04. Furthermore, today marked the fifth consecutive daily win for MON, which is now just a stone's throw away from five-year-high territory. While call volume on MON ramped up to about two times the daily average, the two most active strikes of the day were short-term out-of-the-money puts.

The Kroger Co. (NYSE:KR)

Kroger hit a fresh record peak of $45.47 today, continuing yesterday's 3.8% climb after an early price-target hike to $45 from $43 at UBS. At the end of today's session, however, the stock was positioned 0.7% lower at $44.96. Over the past month, KR has been on the bullish radar in its options pits, with speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) buying to open more than nine calls for every put. This has resulted in a top-heavy 20-day call/put volume ratio of 9.12. What's more, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.27 ranks 8 percentage points from an annual low, indicating short-term option players have rarely been more call-heavy toward KR than they are now.

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