Schaeffer's Trading Floor Blog

Highs & Lows: McDonald's, Monster Worldwide, and Vodafone

MCD, MWW, and VOD dropped to new lows today, while YHOO muscled higher

by 11/15/2012 2:02 PM
Stocks quoted in this article:

The broader market is paring its losses and is currently slightly below breakeven, following a late-morning descent into negative territory. Against this backdrop, the NYSE has posted just seven new highs and 246 new lows, while the Nasdaq sees 145 nadirs and just nine new highs, including Yahoo! Inc. (NASDAQ:YHOO - 17.89). Among the stocks charting notable moves to the downside are McDonald's Corporation (NYSE:MCD - 84.11), Monster Worldwide, Inc. (NYSE:MWW - 5.49), and Vodafone Group Plc (ADR) (NASDAQ:VOD - 25.22).

  • Leader of the fast-food world MCD has made some leadership changes, appointing its current Global Chief Restaurant Officer as president of McDonald's USA. The shift is effective Dec. 1. The stock, meanwhile, is following the broad market lower, tagging a 14-month low of $83.61 and bringing its year-to-date loss to roughly 16.2%. Options players have been trying to take advantage of the equity's weakness, as we've seen an increase in put speculation. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the 50-day put/call volume ratio weighs in at 0.80, which is six percentage points shy of an annual peak. In other words, traders have been buying to open put options at an unusually fast clip, compared to the past year's worth of activity.

  • Late yesterday, MWW received news that two potential bidders are no longer interested in buying out the employment-services company, bringing the current list of MWW suitors to zero. The stock has dropped more than 7.5% today, hitting a new record low and bringing its 2012 losses to more than 30%. MWW could suffer more selling pressure if the Street begins to shift its focus to the bearish camp. Currently, 60% of the analysts covering the stock rate it a "strong buy" -- with no "sell" ratings to speak of -- and the average 12-month price target of $9.28 is a whopping 85% north of the equity's nadir of $5.01 touched earlier today. On the other hand, short sellers have been betting against the stock, as evidenced by a 15% jump in short interest during the past month and the fact that more than one-quarter of the stock's float is sold short.

  • Finally, VOD dipped to a new annual nadir of $25.17 shortly after lunchtime and is off roughly 10% since the start of the year. The stock's Relative Strength Index (RSI) currently stands at 19, however, implying the stock could be in an oversold state and ready for a bounce higher. A short squeeze isn't likely to help matters, however. Just 0.15% of the stock's float is sold short, and it would take less than a day to cover any shorted shares, at the stock's current average daily volume.

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