Schaeffer's Trading Floor Blog

Stocks to Watch Thursday: General Motors Company, Walgreen Company, and Nokia Corporation (ADR)

Analyzing GM, WAG, and NOK ahead of tomorrow's trading

by 6/18/2014 4:57 PM
Stocks quoted in this article:

Momentum names that made notable moves on Wednesday and could continue to do so into Thursday's session are car concern General Motors Company (NYSE:GM), pharmacy firm Walgreen Company (NYSE:WAG), and Finnish phone maker Nokia Corporation (ADR) (NYSE:NOK). Here is a quick look at these stocks ahead of tomorrow's opening bell.

General Motors Company (NYSE:GM)

GM bucked the broad-market trend higher, giving up 0.2% to settle at $36.30. The recall-plagued automaker continues to make headlines, with the company slapped with a $10 billion federal lawsuit the same day CEO Mary Barra returned to Capitol Hill, where U.S. lawmakers chastised the firm for cultivating a "culture of secrecy." Despite the stock's year-to-date deficit of more than 11%, calls outnumber puts among options expiring within three months, as evidenced by the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.63. Echoing that, GM calls outpaced puts by a 3-to-1 margin today, with potential buy-to-open activity detected at the June 36.50 call.

Walgreen Company (NYSE:WAG)

WAG enjoyed a 4.1% boost to end at $76.08 -- and touched a record high of $76.17 in intraday action -- bringing its year-to-date gain to 32.5%. Bolstering the security was an upgrade to "overweight" from "equal weight" at Barclays, which also lifted its price target on the stock to $92 from $56. "We believe the board is actively considering changes that could materially boost earnings and the stock price," the analysts said in a note to clients. Option buyers are also growing optimistic ahead of WAG's quarterly earnings report, slated for release before the open on Tuesday, June 24. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a 50-day call/put volume ratio of 2.53. This reading registers in the 83rd percentile of its annual range, suggesting option players have picked up WAG calls over puts at a faster-than-usual clip during the past 10 weeks. In today's session, short-term options were particularly popular, as the stock's 30-day at-the-money (ATM) implied volatility (IV) touched a 52-week peak and settled 11.7% higher at 31.5%.

Nokia Corporation (ADR) (NYSE:NOK)

A day after its annual shareholder meeting and declaring a special dividend, NOK finished 3.6% higher at $8.33 -- and scored a three-year peak of $8.35 -- after the firm said it will commence its share buyback program following its earnings release in late July. NOK option bulls are likely applauding the stock's ascent; its 50-day ISE/CBOE/PHLX call/put volume ratio of 5.22 sits just 1 percentage point from an annual high. What's more, short-term speculators can gamble on NOK at a relative discount. The equity's 30-day ATM IV hit a 52-week low this morning, before jumping 5.4% to 31.2%, and the stock's Schaeffer's Volatility Index (SVI) of 30% stands higher than just 4% of all other readings of the past year. In other words, NOK's short-term options are attractively priced right now, from a historical standpoint.


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