J.C. Penney Company, Inc. (NYSE:JCP)
JCP is scheduled to report earnings ahead of the opening bell on Tuesday, and analysts, on average, are calling for a per-share loss of $1.06, which is almost three times the loss of 37 cents per share the year prior. Of note, JCP has missed analysts' bottom-line expectations in each of the past five quarters. Plus, the stock has dropped an average of 8% the day after, and 12.6% during the following week.
On the technical front, JCP has suffered a year-over-year loss of 44.4%. What's more, in the past three months, the stock has dropped 28.7%, and has underperformed the broader S&P 500 Index (SPX) by close to 30 percentage points. Not to mention, JCP hit a 12-year low of $12.34 on Aug. 9, and closed at just $13.40 on Friday.
Amid these technical struggles, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open more than two JCP puts for every call during the last two weeks. The resulting 10-day put/call volume ratio of 2.27 ranks higher than 90% of all other readings taken throughout the year, indicating J.C. Penney Company, Inc. puts are being picked up over calls at a near-annual-high rate. Meanwhile, the number of shorted JCP shares has zoomed more than 23% higher during the last two reporting periods to 44.5 million. This represents nearly 44% of the stock's float.
Microsoft Corporation (NASDAQ:MSFT)
Gamescom -- the world's largest games event held annually in Cologne, Germany -- will take place from Wednesday, Aug. 21 to Sunday, Aug. 25. This year's visitors will be able to try out the next generation of consoles, which includes MSFT's Xbox One. The day prior to Gamescom's formal opening, MSFT plans to hold an exclusive showcase event, with the primary focus on its Xbox One games. Plus, one source indicated that MSFT has promised "exciting news" for its fans.
While MSFT sports a year-to-date gain of 19.1%, the stock has dropped 10.3% since its disappointing earnings report on July 18, to close the week at $31.80. Still, in the options pits, MSFT's Schaeffer's put/call open interest ratio (SOIR) stands at 0.41, with calls outnumbering puts by a margin of 5-to-2 among options expiring in three months or less. This ratio ranks just 1 percentage point from an annual low, conveying Microsoft Corporation's short-term traders have rarely been more call-heavy throughout the last year. In a similar vein, 4.64 call have been bought to open at the ISE/CBOE/PHLX during the last 10 trading days for every put; the resultant call/put volume ratio of 4.64 is higher than all but 4% of the past year's ratio readings.
Short sellers have also dismissed MSFT; the number of shorted shares dropped by nearly 25% during the last reporting period and now amounts to less than 1% of the stock's available float. Analysts, however, are more divided; 11 of the 27 brokerages following MSFT have named it a "buy" or better, leaving 16 tepid "hold" ratings.
Toll Brothers Inc (NYSE:TOL)
Slated for release this week are existing and new home sales figures, and the Federal Housing Finance Agency (FHFA) house price index report. As if that is not enough to digest, TOL is scheduled to report earnings before the market opens on Wednesday. Analysts, on average, expect TOL to announce a per-share profit of 26 cents, a dime below the 36 cents per share TOL earned in the year-ago period. In the last eight quarters, TOL has beaten analysts' bottom-line expectations six times, but has been virtually unchanged, on average, in the day following its results.
TOL has struggled on the charts since the beginning of 2013, falling about 2% year-to-date to its current price of $31.76 and underperforming the SPX by more than 13 percentage points during the last three months. Last week, the stock briefly breached its 80-week moving average, a trendline TOL hasn't violated on a weekly basis since November 2011.
Still, the majority of analysts maintain an optimistic outlook. From the 16 analysts weighing in, TOL has received nine "buy" or better endorsements, compared to five "holds" and two "strong sells." Furthermore, the stock's consensus 12-month price target of $38.18 stands in territory the shares have not visited since May.
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