Earnings Preview: 3D Systems, Clovis Oncology, Transocean

Analyzing recent option activity ahead of earnings from 3D Systems Corporation (NYSE:DDD), Clovis Oncology Inc (NASDAQ:CLVS), and Transocean LTD (NYSE:RIG)

May 5, 2015 at 3:43 PM
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Among the stocks gearing up to report earnings tomorrow are 3-D printing specialist 3D Systems Corporation (NYSE:DDD), biotech firm Clovis Oncology Inc (NASDAQ:CLVS), and offshore drilling contractor Transocean LTD (NYSE:RIG). Below, we'll take the pre-earnings temperature of DDD, CLVS, and RIG. 

  • DDD is down 26.3% year-to-date to linger near $24.25. What's more, the shares hit a two-year low of $23.85 just today, ahead of tomorrow morning's earnings release. Options traders have been more bearish than usual, as 3D Systems Corporation's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.73 stands in the 66th annual percentile. On the earnings front, the stock moved an average of 6.3% in the session immediately following its last four earnings reports. DDD's near-term straddle, meanwhile, is pricing in a 7% swing. Traders are paying historically inflated prices for their near-term bets on DDD, as its Schaeffer's Volatility Index (SVI) of 62% is higher than 76% of all similar readings from the past year.
  • CLVS has taken a breather on the charts, with the shares down 15.6% from their April 16 all-time high of $94.88 to hover near $80.06. However, the shares are still up 43% year-to-date, mostly thanks to a regulatory-related bull gap in early April. In the options pits, puts have been prominent, as Clovis Oncology Inc's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.83 stands higher than 88% of all equivalent readings from the last 12 months. Elsewhere, the equity has moved an average of 4% in the session immediately following its last four earnings reports. After CLVS takes its turn in the earnings confessional tomorrow night, the options market expects the stock to move 10.6% by next Friday's close, per its near-term straddle. Short-term options players are paying fair prices, relatively, as CLVS' SVI of 79% reads in the 40th percentile of its annual range.
  • RIG shares are up 42.8% from their March 16 two-decade low of $13.28, last seen at $18.96. The stock is now staring up at the $20 region, which has stifled rebound attempts since late 2014. Sentiment in the options pits has been bearish, as RIG's 10-day ISE/CBOE/PHLX put/call volume ratio of 10.11 is in the 98th percentile of its annual range. Looking to the stock's earnings history, RIG has experienced an average post-earnings swing of 0.8% in the session immediately after its last four earnings reports. Additionally, according to the stock's near-term straddle, the options market is pricing in a move of 6.7% this go-around. Speculators are paying historically middling prices for their short-term bets on RIG ahead of its turn in the earnings limelight tomorrow night, as its SVI of 63% is higher than 48% of all equivalent readings from the past 12 months. 
 

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