Schaeffer's Trading Floor Blog

Stocks to Watch Wednesday: Electronic Arts Inc., Dunkin Brands Group Inc, and VMware, Inc.

Analyzing EA, DNKN, and VMW ahead of tomorrow's trading

by 3/11/2014 4:56 PM
Stocks quoted in this article:

Momentum names that made notable moves on Tuesday and could continue to do so into Wednesday's session include video game maker Electronic Arts Inc. (NASDAQ:EA), doughnut master Dunkin Brands Group Inc (NASDAQ:DNKN), and IT services provider VMware, Inc. (NYSE:VMW). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Electronic Arts Inc. (NASDAQ:EA)

Electronic Arts shot to a five-year high of $29.90 this morning, amid talk that its first-person shooter video game, Titanfall, could potentially sell up to 10 million copies worldwide this spring. Subsequently, the stock saw a significant uptick in overall volume in its options pits, with more than three times the average daily amount of contracts exchanged. Almost one-third of the day's activity can be traced to the weekly 3/14 30-strike put, where it appears a healthy number of speculators were closing out of their bearish positions amid EA's advance. At the close, the shares were positioned 2% higher at $29.80, bringing their year-to-date advance to roughly 30%.

Dunkin Brands Group Inc (NASDAQ:DNKN)

Dunkin Brands hit a fresh record high of $53.02 earlier today, before settling at $52.17 at the market's close. Longer-term, the stock has been steadily moving higher, climbing 40% in the past 12 months, yet the equity has racked up a heavy amount of short interest -- 7.7 million shares, to be exact. This is equivalent to 7.2% of DNKN's float, which would take more than a week to cover, at the shares' average pace of trading. Today, the stock saw more than twice as many calls as usual cross the tape. Perhaps some of this call activity -- particularly at the out-of-the-money April 55 strike -- came at the hands of short sellers looking to hedge their bearish bets against additional upside.

VMware, Inc. (NYSE:VMW)

VMware jumped to $106.46, its highest perch since May 2012, following a price-target hike to $120 from $110 at Nomura this morning. At the end of the session, the stock stood with a year-to-date gain of 15.6% at $103.75. Regardless of this positive price action, short interest climbed 28.4% during the last two reporting periods, and now accounts for 20.7% of the equity's available float. It would take almost seven sessions to cover these bearish bets, at VMW's average daily volume.


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