Mosaic posted an earnings beat, but the share price plummeted as traders responded to a downbeat phospate sales forecast
We're in the thick of earnings season, with plenty of stocks rallying -- or selling off -- in the wake of their quarterly profit and revenue figures. Among the names in focus today are biotech GenMark Diagnostics, Inc (NASDAQ:GNMK) and fertilizer specialist Mosaic Co (NYSE:MOS), with both stocks making aggressive downside moves after earnings.
GenMark Stock Gutted After Earnings Miss
GNMK stock is down 10.8% to trade at $10.55, after the company swung to a wider-than-forecast second-quarter loss. It's been a tough year for GNMK, which has lost about 14% in 2017, and earlier today hit its lowest price since September 2016.
While today's big sell-off has GNMK short-sale restricted, short sellers have built up a massive position of 6.5 million shares, or 15.5% of the stock's total available float. This accumulation represents more than 20 times GenMark's average daily trading volume.
Mosaic Stock Slides on Phosphate Forecast
Mosaic stock is down 6.2% to trade at $22.65 -- despite second-quarter earnings that exceeded estimates -- after the company predicted slower sales and softer prices for phosphate during the current quarter. CEO Joc O'Rourke has since clarified to Reuters that declining raw material prices would offset any impact on margins, and added that the MOS stock price doesn't reflect the company's full value.
It's been a brutal year for MOS stock, which has shed nearly 23% so far in 2017. That said, today's session low of $21.97 lies in the same neighborhood as the equity's June 21 annual low of $21.78, as well as its first-quarter 2016 lows. And with the stock trading near a point where selling pressure has recently exhausted itself, most of the optimism appears to have already been wrung out of the analyst crowd, as well. Of the 12 brokerages covering MOS stock, 11 rate it a "hold" or "sell."
On the other hand, it certainly seems like options traders may have been too upbeat ahead of Mosaic's quarterly report. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MOS boasts a 50-day call/put volume ratio of 3.28, which ranks in the 91st percentile of its annual range. In other words, during the weeks leading up to the event, traders were buying bullish bets over bearish by one of the widest margins of the last year.