Earnings Preview: El Pollo Loco Holdings, Inc., FXCM Inc, and VeriFone Systems Inc

El Pollo Loco Holdings, Inc. (NASDAQ:LOCO), FXCM Inc (NYSE:FXCM), and VeriFone Systems Inc (NYSE:PAY) will report quarterly earnings after tonight's close

by Karee Venema

Published on Mar 10, 2016 at 12:43 PM

Although earnings season has been winding down in recent weeks, there are still a number of notable names on Wall Street's watch list. While traders are digesting big post-earnings reactions for solar power firm Canadian Solar Inc. (NASDAQ:CSIQ) and cloud concern Box Inc (NYSE:BOX), restaurant chain El Pollo Loco Holdings, Inc. (NASDAQ:LOCO), foreign exchange firm FXCM Inc (NYSE:FXCM), and electronic payment processor VeriFone Systems Inc (NYSE:PAY) will all unveil their quarterly earnings results after tonight's close.

  • Short-term speculators have shown a preference for calls over puts on lightly traded LOCO, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.55 -- in the 27th annual percentile. Meanwhile, those purchasing the equity's near-term options are currently paying for elevated volatility expectations, as evidenced by LOCO's 30-day at-the-money implied volatility of 65.9%, which ranks higher than 86% of all comparable readings taken in the last year.

    Looking back over the past eight quarters, LOCO has averaged a single-session post-earnings move of 8.1%. This time around, the options market is pricing in a slightly higher swing of 11.5% for tomorrow's trading. Technically speaking, shares of El Pollo Loco Holdings, Inc. have shed nearly half their value since hitting an annual high of $29.20 in mid-May, with a recent rally attempt -- including today's 3% pop to $15.34 -- running out of steam near the $15.35 mark, home to LOCO's mid-August bear gap intraday peak.

  • Over the past eight quarters, FXCM has moved an average of 6.4% in the session subsequent to reporting. Ahead of tonight's scheduled event, the shares are off 1.7% at $14.74. Longer term, FXCM Inc has had a number of fits and starts this year, resulting in a year-to-deficit of nearly 12%. Short sellers, meanwhile, have been upping the bearish ante. In the last two reporting periods, short interest on FXCM surged 16.5% to 14.8% of the stock's float, or 5.2 times the average daily trading volume.

  • PAY is up 0.6% at $26.52, as the stock battles its 120-day moving average -- a trendline not conquered on a daily closing basis since June 23. Historically, PAY has averaged a single-session post-earnings move of 4.5% over the past eight quarters. For tomorrow's post-earnings price action, though, the options market is pricing in a loftier 9% swing. Bearish traders have been hitting the bricks ahead of VeriFone Systems Inc's results. Specifically, short interest declined 13.9% in the two most recent reporting periods, and now accounts for a low 4.8% of PAY's available float.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.
Billion-Dollar AT&T Loan Boosts Stock
T announced at $5.5 billion term-loan agreement today
SHOP Stock Fails to Shake Off Downgrade
Raymond James downgraded Shopify to "market perform" from "outperform"
The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.