Schaeffer's Trading Floor Blog

New Annual Lows: Las Vegas Sands, Netflix, and Electronic Arts

LVS, NFLX, and EA explore new lows

by 7/26/2012 1:40 PM
Stocks quoted in this article:

Positive comments out of the euro zone -- along with encouraging unemployment and durable goods reports on the home front -- have ushered the major indexes well above breakeven today. Even so, a fair number of equities have gone against the bullish grain to touch new annual lows. Presently, the New York Stock Exchange (NYSE) has 53 stocks at new bottoms, while the Nasdaq shows 63 at fresh new lows. Among the stocks tagging 52-week lows in today's session are Las Vegas Sands Corp. (NYSE:LVS - 35.54), Netflix, Inc. (NASDAQ:NFLX - 57.12), and Electronic Arts Inc. (NASDAQ:EA - 11.05).

  • Shares of LVS have slipped more than 5% today to touch a new low of $34.72, as the gambling concern feels the sting of a weaker-than-anticipated quarterly earnings report. The equity now sits on a year-over-year loss of approximately 23%, and has underperformed the broader S&P 500 Index (SPX) by close to 28 percentage points over the past 60 sessions. However, prior to today, the stock was beloved among the brokerage bunch, as 16 "strong buys" and three "buy" endorsements were handed out, compared to just two "holds" and not a single "sell" suggestion to be found. Plus, the consensus 12-month price target stood at $57.56, representing a premium of 66% to LVS' new low. So far today, though, no fewer than nine brokerage firms have cut their price targets on the equity.

  • NFLX reached a new bottom of $56.14 today -- extending its year-over-year decline to nearly 79% -- after Consumer Reports ranked the movie subscription sixth in user satisfaction. This news comes just after the company reported a 91% drop in second-quarter profit and warned of potentially weaker-than-projected subscriber growth for 2012. Not surprisingly, puts appear to have the upper hand on calls, as the Schaeffer's put/call open interest ratio (SOIR) checks in at 1.07 -- implying that puts outstrip calls among options expiring in three months. This ratio ranks in the bearishly skewed 70th annual percentile, indicating that short-term options players are more put-heavy than usual.

  • Just ahead of its annual shareholder meeting, EA has lost around 4% today, tagging a new valley of $11.04. The video-game developer has swallowed a 52-week decline of roughly 54%, but that hasn't stopped call players from converging on the stock. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 50-day call/put volume ratio of 4.08 for EA, signaling that calls bought to open have more than quadrupled puts during the past few months. This ratio arrives in the 79th annual percentile, which means that traders have been scooping up bullish options over bearish at an accelerated clip.
Keep reading to see what was on today's new highs list.

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