Schaeffer's Trading Floor Blog

Highs & Lows: ADTRAN, Blyth, McGraw-Hill, and Thor Industries

ADTN, BTH, MHP, and THO were among the equities charting notable moves today

by 9/27/2012 12:57 PM
Stocks quoted in this article:

In afternoon trading, stocks have built onto their early gains inspired by this morning's better-than-projected jobless claims. With this wave of optimism hitting the Street, the number of equities running to new annual highs is outweighing those slipping to fresh lows. At last look, there are 78 securities at annual peaks, and just four fresh lows on the NYSE. Meanwhile, Nasdaq has seen 39 annual highs and 11 nadirs. Among the names making notable runs today are ADTRAN, Inc. (NASDAQ:ADTN - 19.10), Blyth, Inc. (NYSE:BTH - 24.63), The McGraw-Hill Companies, Inc. (NYSE:MHP - 55.06), and Thor Industries, Inc. (NYSE:THO - 36.36).

  • Beleaguered telecom issue ADTN continues to take a beating, dropping to a more than three-year bottom of $18.85 this morning. On the charts, the shares have pulled back some 37% since the beginning of the year, and have lagged the broader S&P 500 Index (SPX) by 38 percentage points during the past three months. Considering this bleak technical picture, it's not too surprising to see such a glut of negativity stacked up in the options pits. The security's 10-day put/call volume ratio of 2.71 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 92nd percentile of its annual range, signaling that traders on these exchanges have rarely made bearish bets over bullish at a faster pace during the past year. Plus, ADTN's Schaeffer's put/call open interest ratio (SOIR) of 1.65 sits in the 100th percentile, suggesting that near-term options players have never been more put-heavy throughout the last 12 months.

  • Next up, BTH's nutritional supplement unit decided against going public, retracting its plans due to uncertain market conditions. The shares took a dive on the news, drifting to the $24.32 level -- their worst price since June 2011 -- and deepening the stock's year-to-date deficit, which now amounts to 13.4%. And things are already bad for BTH, as there seems to be plenty of negativity already priced into the stock. Short interest ballooned 50% during the past month, and now makes up 14.5% of the security's available float. At BTH's average pace of trading, it would take more than eight sessions for all of these shorted shares to unwind.

  • Information services provider MHP tagged the $55.16 mark just moment ago -- its loftiest price since August 2007. From a technical perspective, the equity is sitting on a comfortable 22.5% rise so far this year, which could help to explain the overwhelming optimism amongst the options crowd. During the past 10 days, speculators on the ISE, CBOE, and PHLX have bought to open 47.71 calls for every put. This ratio arrives four percentage points from an annual peak, implying that traders on these exchanges have seldom purchased calls over puts at a faster clip throughout the past year. However, there could be a less-than-bullish motive for this call-heavy activity, as short interest rose 24.6% higher over the most recent reporting period. Oftentimes, short traders will buy calls as hedges for their pessimistic positions-- and this could be what's happening here.

  • Lastly, THO scored a new annual best of $37.49 on the heels of its stronger-than-anticipated fourth-quarter results. And the recreational vehicle maker could prolong its 32% year-to-date upswing, should skeptics continue to hit the exits. Short interest on the equity dropped 17.6% over the past two reporting periods, but still accounts for 7.9% of THO's available float. In fact, it would take more than eight days to buy back all of these bearish bets, which could translate into a contrarian tailwind for the stock.

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