Schaeffer's Trading Floor Blog

Stocks to Watch Friday: Trina Solar Limited (ADR), TiVo Inc., and Linn Energy LLC

Analyzing TSL, TIVO, and LINE ahead of tomorrow's trading

by 2/27/2014 5:20 PM
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Momentum names that made notable moves on Thursday and could continue to do so into Friday's session include solar power product specialist Trina Solar Limited (ADR) (NYSE:TSL), digital recording concern TiVo Inc. (NASDAQ:TIVO), and oil and gas company Linn Energy LLC (NASDAQ:LINE). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Trina Solar Limited (ADR) (NYSE:TSL)

Trina Solar jumped 5.5% today to close at $15.82, after word hit the Street that the firm signed an EPC contract with Fresh Fruits Company to develop the first mega-scale rooftop solar power project in Jordan. Such gains are nothing new for the stock, which has tacked on 238.8% over the past 12 months. Not surprisingly, TSL speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open more than seven calls for every put during the past 20 sessions, resulting in a top-heavy call/put volume ratio of 7.53. Today was more of the same. While overall options activity ramped up to two times the expected daily amount, calls outnumbered puts by a margin of more than 4-to-1. Of note, considering 13.1% of TSL's shares are sold short, it is possible that some of the recent call activity is actually the work of short sellers hedging their bearish bets against potential continued upside.


Last night's strong fourth-quarter earnings report report and an early morning price-target hike to $16 from $15 at Brean Capital sent TiVo shares 6.6% into the green today to close at $13.68. In response to the upbeat news, speculators flocked to the equity's options pits to place post-earnings bets. Overall options volume spiked to more than 9 times the average daily amount, with the overwhelming amount of trades expiring within the next three months. In fact, nine of the 10 most active options of the day were of the short-term variety.


Linn Energy also reported fourth-quarter earnings; however, its results weren't so well-received. In fact, the company's huge earnings miss -- and subsequent downgrade to "sector outperform" from "focus stock" at Howard Weil -- caused the shares to plunge 4.6% to close at $31.40. Nevertheless, calls were the options of choice on LINE today, as these contracts traded at a rate of nearly five times the daily norm, and outnumbered puts by a margin of more than 2-to-1. And, while calls accounted for seven of the 10 most active options of the day, these strikes saw a fair mix of buying and selling activity.

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