Can Tuesday's 3 S&P 500 Gainers Keep Outperforming?

Comparing and contrasting the SPX's three winners from yesterday -- American Airlines Group Inc (NASDAQ:AAL), Cablevision Systems Corporation (NYSE:CVC), and Sigma-Aldrich Corporation (NASDAQ:SIAL)

by Alex Eppstein

Published on Sep 2, 2015 at 12:02 PM

As most everyone knows, Tuesday was a brutal day for the stock market. This was certainly true for the S&P 500 Index (SPX), which fell 3% and saw just three of its 502 components end on a gain. Today, we'll take a look at that trio of stocks -- specifically, American Airlines Group Inc (NASDAQ:AAL), Cablevision Systems Corporation (NYSE:CVC), and Sigma-Aldrich Corporation (NASDAQ:SIAL) -- to try and determine what may lie ahead.

Glancing at yesterday's activity, CVC led the winners with a nearly 2% gain, while AAL and SIAL added 0.6% and less than 0.1%, respectively. All three are extending their upward momentum at midday, too, despite Wall Street's generally bearish tone toward the stocks.

For starters, the brokerage crowd has been negative toward CVC, seemingly disregarding its long-term outperformance. Up 0.8% at $25.87, the shares have added more than 25% year-to-date. Nonetheless, 13 of 16 analysts have handed out "hold" ratings or worse, leaving plenty of room for a round of upgrades.

The brokerage crowd is skeptical toward SIAL, as well, despite the company recently clearing a hurdle on the M&A front. All six firms tracking the equity -- docked at $139.46 -- consider it a "hold." Meanwhile, the picture is more divided on AAL, where seven analysts maintain "strong buy" opinions, versus six "hold" ratings. This could pave the way for future downgrades, since AAL -- despite jumping 4.1% today to trade at $40.82 -- is sitting on a deficit of nearly 24% in 2015. Earlier, Imperial Capital lowered its price target on AAL to $65 from $73.

In the options pits, recent activity seems to better reflect each stock's technical trajectory. Outperforming Cablevision Systems Corporation (NYSE:CVC) has been showered with bullish attention, with traders buying to open more than 15,500 calls during the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to fewer than 50 puts. The resultant call/put volume ratio of 330.02 ranks in the 96th percentile of its annual range.

By contrast, American Airlines Group Inc's (NASDAQ:AAL) 10-day ISE/CBOE/PHLX put/call volume ratio of 0.54 sits above 82% of comparable readings from the past year. Along similar lines, AAL's Schaeffer's put/call open interest ratio (SOIR) rests at a 12-month high of 0.56. Meanwhile, during the last 10 weeks at the ISE, CBOE, and PHLX, traders have bought to open 1.82 Sigma-Aldrich Corporation (NASDAQ:SIAL) puts for every call -- a ratio that outstrips all but 9% of readings recorded in the prior year.

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