Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Dec 21, 2016 at 10:40 AM
Updated on Mar 19, 2021 at 7:15 AM
  • By the Numbers
Yesterday, we took a look at the 30 worst stocks to own during the week between Christmas and New Year's -- a list dominated by the real estate sector. Today, we'll see what history has to say about the best stocks to own during the same time period.

Courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, the list below includes the 30 best performers during the post-Christmas week, when looking back 10 years. To qualify, stocks have to be optionable, have traded for at least eight years, and been perched above $10 at Monday's close. As you can see, precious metal stocks account for a disproportionate number of the outperformers, including Barrick Gold Corporation (USA) (NYSE:ABX) and Silver Wheaton Corp. (USA) (NYSE:SLW).


best stocks though new years dec 21

In the past decade, ABX has been positive during the last week of the year seven times. On average, the gold stock has advanced an impressive 2% over that span. A repeat performance would be much appreciated by shareholders, who have watched Barrick decline badly since topping out at a three-year high of $23.47 in early July -- and even slip below its 50% retracement level of its late-2015 lows and the aforementioned peak. At last check, the stock is down 1.7% at $14.09, dropped by a downgrade to "hold" from "buy" at TD Securities, which also slashed its target price by $7 to $18.

Plenty of options traders have been banking on a rebound. ABX sports a 10-day call/put volume ratio of 2.75 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- ranking in the bullishly skewed 86th annual percentile. Of course, with short interest recently rising, a portion of these calls -- especially at out-of-the-money strikes -- may have been purchased by short sellers hedging against a near-term breakout.

In any case, now is an ideal time to purchase premium on short-term Barrick Gold Corporation options. The stock's Schaeffer's Volatility Index (SVI) of 44% rests in the low 11th annual percentile, suggesting muted volatility expectations are being priced in. Likewise, ABX's Schaeffer's Volatility Scorecard (SVS) of 86 indicates the underlying has tended to make bigger-than-expected moves in the past year, relative to what the options market has priced in.

SLW has historically outperformed in the week following Christmas, as well. In the last decade, the stock has been positive during this period 70% of the time, with an average one-week gain of 2.5%. As with its sector peer, Silver Wheaton could use a repeat performance, as the shares have taken a serious haircut since hitting a three-year high of $31.35 in August. Right now, the stock is down 0.7% at $17.36.

As with Barrick Gold traders, SLW speculators have been purchasing calls over puts at a breakneck pace, seemingly ignoring the technical woes. The stock's 50-day ISE/CBOE/PHLX call/put volume ratio of 4.98 rests only 6 percentage points from an annual peak. However, ulterior motives could be in play here, too, considering the most recent reporting period saw an 18.4% jump in short interest.

For those looking to scoop up short-term options on the cheap, now's a good time to strike. Silver Wheaton Corp. sports an SVI of 43% -- below 84% of comparable readings from the past year. Moreover, the silver stock's SVS checks in at a high 85.

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Published on Dec 21, 2016 at 11:38 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity
  • Stocks On the Move
  • Stock Market News
Netflix, Inc. (NASDAQ:NFLX) shares are up 1.3% at $126.72, as traders disregard news of a now-resolved hack of one of the streaming giant's Twitter Inc (NYSE:TWTR) accounts. Instead, the stock seems to be reacting to Stifel's price-target hike to $150 from $140, record-high territory for NFLX. The brokerage firm said expectations for a year-over-year decline in subscriber growth is an "overreaction to temporary issues the company faced in 2016," and that an expanded original content catalog increases the stock's value proposition -- with the latter outlook echoed by Loop Capital, which reiterated its $151 price target. Today's options traders appear to be taking the glass-half-full approach to NFLX stock, too, with calls trading at 1.6 times the average intraday pace.

Drilling down, the weekly 12/23 options series is hot, with buy-to-open activity detected at the 125-, 127-, and 128-strike calls -- NFLX's three most active options. If this is the case, the goal of the call buyers is for NFLX to settle the week north of the respective strike prices. Should the calls expire out of the money, though, the most the any group stands to lose is the initial premium paid.

Widening the scope reveals today's penchant for long calls just echoes the withstanding trend seen in the stock's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 63,856 calls on NFLX, compared to 33,497 puts. What's more, the resultant call/put volume ratio of 1.91 ranks in the 99th annual percentile, meaning long calls have been initiated relative to puts at a near-annual-high clip.

The optimism appears to be growing outside of the options arena, as well. Short interest declined nearly 13% in the two most recent reporting periods to 26.8 million shares -- the lowest amount since July 2015. Plus, the majority of the 33 analysts covering NFLX maintain a "buy" or better rating.

Looking at the charts, it's easy to see why sentiment is tilted toward the bullish side. For starters, NFLX is the only one out of its fellow "FANG" stocks to have outperformed the broader S&P 500 Index (SPX) over the past three months. What's more, even though shares of Netflix, Inc. (NASDAQ:NFLX) are staring down historical headwinds in next week's trading, the stock is up almost 29% this quarter, and is 2 percentage points away from taking out its Oct. 24 annual high of $129.29.

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Published on Dec 20, 2016 at 12:30 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Earnings Preview

Tech firm Red Hat Inc (NYSE:RHT) is set to report earnings tomorrow evening. While analysts stand firmly in the stock's corner, options traders seem to be betting bearishly, with RHT put options more popular than usual.

For the day, RHT is trading 1.2% lower at $79.54. The software stock has added roughly 8.5% since its Dec. 2 lows, but is struggling against the round-number $80 mark, which is RHT's year-over-year breakeven level. Further, RHT has suffered several failed attempts to break out above the $81-$82 region, which is home to its June/July 2015 highs, and is currently in the vicinity of an important Fibonacci retracement level.

In the option pits, RHT's Schaeffer's put/call open interest ratio (SOIR) of 1.42 sits just 1 percentage point from an annual peak, indicating near-term option players have rarely been more put-skewed in the past 12 months. However, heavy call open interest is docked at the January 2017 80 strike, which is RHT's second-largest open interest position, with 2,829 contracts on record. This heavy open interest could reinforce round-number resistance in the short term.

Widening the scope, short interest is down 1.8% over the last reporting period, but there are still 5.5 million RHT shares sold short, or 4.7 times the stock's average daily trading volume. However, analysts remain firmly on the bullish side of the fence, with 14 of 16 rating RHT shares a "buy" or better, and without a single "sell" to be found. A weaker-than-expected earnings showing tomorrow could leave RHT vulnerable to downgrades.

Looking ahead to tomorrow's earnings report, Red Hat Inc (NYSE:RHT) shares have averaged a post-earnings, single-session move of 4.3% over the last eight quarters. Option traders are currently pricing in a more dramatic 8.7% single-session move in either direction. These heightened volatility expectations are seen in the stock's 30-day at-the-money implied volatility, too, which was last seen at 32.4% -- in the elevated 82nd percentile of its annual range.

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Published on Dec 20, 2016 at 1:49 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity
  • Stocks On the Move
Twilio Inc (NYSE:TWLO) hit an intraday high of $31.49 earlier -- last seen up 4.9% at $30.58 -- after Drexel Hamilton initiated coverage on the tech stock with a "buy" rating and $45 price target. Specifically, an analyst at the brokerage firm said Twilio's low market share in "the rapidly growing cloud communications platform market" represents a huge growth opportunity, and that its recent pullback is a result of the market discounting the shares ahead of today's lockup expiration. Plus, as Schaeffer's Quantitative Analyst Chris Prybal pointed out, today's jump put shares of TWLO north of their 160-unit trendline on a 30-minute chart for the first time this month -- and it appears today's options traders think the stock has more room to run.

TWLO 30minute chart

At last check, nearly 16,500 TWLO options had traded -- almost three times what's typically seen at this point in the day -- with 12,150 calls on the tape, versus 4,300 puts. Most active is the weekly 12/23 30-strike call, where it seems safe to assume new positions are being purchased. In other words, call buyers expect TWLO stock to extend its surge north of the strike through this Friday's close, when the weekly series expires.

Today's call-skewed session just echoes the withstanding trend seen in TWLO's options pits in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 3,855 calls on the stock, compared to 1,768 puts.

Considering TWLO is a heavily shorted stock, it's certainly possible that some of this recent call buying is a result of short sellers hedging their bearish bets against any upside risk. In fact, short interest shot up almost 80% in the two most recent reporting periods to 10 million shares -- the loftiest amount since the stock first went public in late June.

Elsewhere on Wall Street, analysts have been hesitant to pull the trigger on TWLO, with 75% of brokerages maintaining a lukewarm "hold" rating. This skepticism isn't completely out of left field, though, considering the shares have pulled back significantly from their late-September record high of $70.96. However, what's more noteworthy is that TWLO stock has repeatedly found a foothold in the $29-$30 region -- double its initial public offering (IPO). Should the shares take a bigger bounce from this historically significant area, an unwinding of skepticism from short sellers and analysts could create tailwinds for Twilio Inc (NYSE:TWLO).

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Published on Dec 20, 2016 at 1:52 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Expectational Analysis
Sony Corp (ADR) (NYSE:SNE) has underperformed the broader market badly in recent months. Specifically, in the past 40 sessions, the electronics stock has trailed the S&P 500 Index (SPX) by almost 15 percentage points. Not to mention, since the U.S. presidential election on Nov. 8 -- a time frame during which both stocks and investor optimism have exploded -- the shares have actually fallen over 6% at $28.75. Moreover, this slide has come in spite of a holiday season that should be a boon to sales of Sony's new gaming consoles, the PS4 Slim and PS4 Pro.

That said, sentiment on Wall Street is positively upbeat. Take, for instance, the options activity seen recently at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). SNE traders have bought to open 4.88 calls for every put during the past four weeks -- a period in which the shares have given up ground. If option bulls start hitting the exits, it could create headwinds for the stock.

Meanwhile, bearish short sellers have been pressing the eject button. Over the last two reporting periods, short interest on SNE plummeted by over 25%. Now, a razor-slim 0.2% of the stock's float is dedicated to these bearish bets. All that to say, there's plenty of room for short sellers to pile on, as their fears of a holiday breakout in SNE fail to materialize.

One last sentiment indicator worth noting is the sky-high expectations among the brokerage crowd. While just two analysts cover Sony stock, both consider it a "strong buy." Not to mention, the consensus 12-month price target of $42.18 stands at a nearly 47% premium to current levels -- and in territory not charted since mid-2008. From a contrarian perspective, a round of downgrades and/or price-target reductions could exacerbate SNE's recent sell-off.

Finally, for those looking to speculate with short-term options, now is a great time to purchase premium. Sony Corp's (ADR) (NYSE:SNE) Schaeffer's Volatility Index (SVI) checks in at an annual low of 23%. In layman's terms, front-month SNE options are pricing in low volatility expectations, historically speaking.

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Published on Dec 20, 2016 at 2:26 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Expectational Analysis
Earlier, we took a look at 30 stocks that could crumble after Christmas. One group that was notably overrepresented was real estate stocks. Specifically, one in every six post-Christmas underperformers belonged to the sector -- or five total. Below, we'll highlight two of the five -- AGNC Investment Corp (NASDAQ:AGNC) and Realty Income Corp (NYSE:O) -- explaining why any losses could potentially be compounded.

Looking at the week between Christmas and New Year's over the past eight years, AGNC has had only one positive return. On average, the stock has lost 2.9% during the week. This isn't encouraging, considering the stock has only gained about 4% in 2016 at $18.06. In short, an especially poor post-Christmas week could push the shares into negative year-to-date territory.

If this happens, AGNC could get punished as optimism in the options pits begins to unwind. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open nearly twice as many calls as puts. The resultant call/put volume ratio of 1.93 sits in the top quartile of its annual range, hinting at a pronounced preference for bullish bets over bearish.

In addition, a bad close to 2016 could provoke even more short selling on AGNC Investment Corp. Over the last two reporting periods, short interest exploded by nearly 53%. Yet, less than 3% of the stock's float is dedicated to these bearish bets, leaving plenty of room for additional shorting activity.

As with its sector peer, O has historically struggled in the last week of the year. During the previous decade, the shares have finished higher only twice during that time frame, while their average return is a loss of 1.8%. In other words, the stock could soon see its year-to-date lead of 9.5%, at $56.55, get dented.

Should this transpire, an exodus among option bulls could exacerbate Realty Income Corp's struggles. After all, during the past two weeks, the stock has racked up a 10-day ISE/CBOE/PHLX call/put volume ratio of 2.34 -- just 13 percentage points from a 12-month high. From a contrarian perspective, this makes for a bearish setup on O shares.

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Published on Dec 20, 2016 at 2:58 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Earnings Preview
  • Intraday Option Activity
Micron Technology, Inc.'s (NASDAQ:MU) options pits are bustling, as the chipmaker prepares to report quarterly earnings after tomorrow's close. By the numbers, around 75,000 calls and 31,000 puts have traded on MU stock, or 1.8 times what's typically seen at this point in the session. While the January 2017 20.50- and 22-strike calls and 19-strike put are most active due to a three-way spread that is tied to stock, pre-earnings options traders are targeting the weekly 12/23 series -- echoing one brokerage firm's call for a breakout to new highs.

Specifically, the weekly 12/23 21-strike call has received notable attention, with 7,617 contracts traded so far. It seems safe to assume that new positions are being purchased here, meaning call buyers are betting on MU to topple the strike price by this Friday's close, when the weekly series expires. As a point of reference, MU stock topped out at an annual high of $21 last Friday.

More broadly, this accelerated call volume mirrors the activity seen in MU's options pits in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio of 3.85 ranks in the 80th annual percentile. Simply stated, calls have been bought to open over puts at a faster-than-usual clip.

And even with earnings on the immediate horizon, low volatility expectations are currently priced into the equity's near-term options -- a potential boon to premium buyers. Specifically, MU's Schaeffer's Volatility Index (SVI) of 42% ranks in the 13th annual percentile, while its 30-day at-the-money implied volatility of 42.9% sits below 72% of comparable readings taken in the past year.

Historically speaking, MU shares have averaged a single-session post-earnings move of 5.8% over the past eight quarters -- regardless of direction. This time around, the options market is pricing in a bigger swing of 8.8%. While the shares of Micron Technology, Inc. (NASDAQ:MU) are up 121% since hitting their most recent low of $9.35 in mid-May -- including today's 1.6% gain to $20.68 -- a post-earnings pullback isn't necessarily out of the question. In fact, MU has turned in a negative post-earnings performance in six of the last eight quarters.

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Published on Dec 20, 2016 at 3:15 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move
  • Intraday Option Activity

Drugmaker Biogen Inc (NASDAQ:BIIB) announced yesterday that current Chief Commercial Officer Michel Vounatsos will take over as CEO in early January. While the shares initially sold off on the news -- which was released just before the closing bell -- on diminished M&A expectations, the stock has reversed course today, trading up 2.2% at $285. In fact, an analyst at Mizuho said Biogen's inside choice for its new chief executive means "the company is still in play … and whatever M&A value in the stock has been more or less retained," even as Credit Suisse trimmed its price target on the stock to $312 from $322. Meanwhile, BIIB's options pits are buzzing with speculators taking aim at a key technical level.

Jumping right in, BIIB calls are changing hands at 1.6 times the expected rate for this point in the day. Leading the action is the January 2017 300-strike call, with more than 1,400 contracts on the tape. Per data from the International Securities Exchange (ISE), there has been a healthy mix of buy- and sell-to-open action at this strike so far. Buyers of the call are hoping BIIB will rally beyond the round $300 mark before the front-month expiration, on Friday, Jan. 20. Call sellers, on the other hand, are betting the strike will serve as a short-term ceiling for the shares.

This is hardly the first time this strike has attracted attention, either. In fact, the January 2017 300-strike call not only saw the largest rise in open interest over the past 10 sessions, but it's also home to peak open interest among all BIIB options, with more than 8,000 contracts in residence. Data from the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) confirms that many of these positions have been bought to open, as well.

Overall, call buying has been a popular strategy among BIIB options traders, with the stock's 10-day call/put volume ratio across the ISE, CBOE, and PHLX seated at 1.47. On the other hand, near-term traders are more put-skewed than usual toward the stock. Specifically, BIIB's Schaeffer's put/call open interest ratio (SOIR) of 0.96 ranks higher than 71% of the past year's readings. Nevertheless, some of the put activity has been at the hands of sellers, considering options traders have sold to open 1.5 puts for each one they've bought over the past 10 sessions.

Elsewhere, BIIB seems to be surrounded by optimism. Short interest dropped off by more than 12% during the most recent two-week reporting period, and now accounts for just over 1% of the equity's available float. Plus, 12 out of 16 analysts maintain a "buy" or better opinion toward BIIB, without a single "sell" rating on the books.

Despite this optimism, BIIB hasn't been particularly impressive from a technical perspective. The stock is off almost 7% year-to-date, and has been falling hard since being rejected at the $325 level last month -- near its early August highs. The stock is now staring up at the overhead $300 mark, which could be tough to crack. The round-number level provided support for Biogen Inc (NASDAQ:BIIB) through the latter half of 2014, and capped the stock's losses in its mid-2015 bear gap, but has caused trouble for the shares numerous times over the past few months. On the upside, however, the shares are poised above support at the 40-week moving average, as well as the $280 level, which has served alternately as support and resistance this year.

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Published on Dec 20, 2016 at 3:21 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move

U.S. stocks are higher as telecom stocks rally. Among specific equities in focus today are discount retailer and pharmacy Fred's, Inc. (NASDAQ:FRED), as well as biotech stocks Akebia Therapeutics Inc (NASDAQ:AKBA) and TESARO Inc (NASDAQ:TSRO). Here's a quick look at what's moving FRED, AKBA, and TSRO.

  • FRED is up a whopping 92.3% at $21.44, and is among the best Nasdaq performers today, after Rite Aid Corporation (NYSE:RAD) announced it would be selling 865 stores to Fred's, Inc. for $950 millionto satisfy antitrust requirements regarding its merger with Walgreens Boots Alliance Inc (NASDAQ:WBA). Earlier, FRED touched a 12-year high of $21.77, and is now up 135% so far in the fourth quarter. Short sellers may be sweating, with FRED's short interest accounting for 9.8% of its float, which would take 12.4 days of trading to cover, at FRED's average daily volume.

  • AKBA is up 25.8% at $10.50, and is also among the top performers on the Nasdaq, after the biotech signed a deal with Japanese firm Otsuka Holdings Co Ltd for the development and marketing of an experimental anemia drug. AKBA will receive $265 million up front, with potential to receive more than $1 billion. Although AKBA still sits down 21% so far in 2016, today's move puts the shares above the $9.50-$10 area that has served as resistance since an early January bear gap. Quite a few short sellers may be finding themselves under water, given AKBA's shorted shares account for 12.1% of the stock's float, which would take nearly three weeks of trading to cover, at AKBA's average daily volume.
  • TSRO is 5.2% higher at $133.84, after the biotech's ovarian cancer treatment, niraparib, was granted a priority review designation by the U.S. Food and Drug Administration (FDA), just a day after sector peer Clovis Oncology Inc (NASDAQ:CLVS) was granted accelerated approval for its ovarian cancer drug. According to one Wedbush analyst, TESARO Inc's niraparib would be the "likely winner" in a head-to-head showdown between the two drugs, with the brokerage firm reiterating an "outperform" endorsement for TSRO. TSRO shares have been on a trek higher since a late-June bear gap, more than tripling in the past six months. Still, TSRO's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 1.17 sits in the top quartile of its annual range, pointing to a healthier-than-usual appetite for long puts over calls of late.
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Published on Dec 20, 2016 at 3:24 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move
  • Intraday Option Activity
Options traders are placing bullish bets on Cliffs Natural Resources Inc (NYSE:CLF), amid the commodity stock's latest surge. At last check, CLF shares were 6.5% higher at $9.36, bringing their year-to-date lead to a mind-boggling 492%. This also explains why calls have been the options of choice on the equity, both today and in recent weeks.

Taking a quick step back, CLF's intraday gains are being attributed to unconfirmed buyout speculation -- which has reportedly been denied by the company. Adding to fuel to the proverbial fire, CNBC's Pete Najarian waxed optimistic on the stock during "Fast Money" earlier.

Diving into the options pits, CLF calls are running at 1.5 times the usual intraday rate, and outstrip puts by a nearly 4-to-1 margin. The most active option is the weekly 12/23 9.50-strike call, which traders are buying to open. By purchasing these out-of-the-money (OOTM) contracts, short-term speculators are anticipating the stock will settle Friday night -- when the series expires -- above $9.50.

Today's call buying is business as usual for Cliffs Natural Resources options bettors. During the past four weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open three times as many calls as puts. As a result, open interest on near-the-money strikes is very call-tilted, based on CLF's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 0.40.

On the other hand, the stock still has its fair share of detractors. Nearly one-quarter of CLF's float is sold short -- some of whom may have purchased calls, especially at OOTM strikes, as an upside hedge. Plus, five of seven covering analysts rate the long-term outperformer a lukewarm "hold." If Cliffs Natural Resources Inc (NYSE:CLF) can sustain its momentum, a round of short covering and/or upgrades could trigger another wave of buying power.

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Published on Dec 20, 2016 at 9:24 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Buzz Stocks

U.S. stock futures are signaling another move higher. Among specific equities in the spotlight today are social media stock Facebook Inc (NASDAQ:FB), biotech ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), and tech stock BlackBerry Ltd (NASDAQ:BBRY). Here's a quick look at what's driving FB, ACAD, and BBRY.

  • FB is in focus this morning, after the European Union (EU) accused the company of providing misleading information during its takeover of messaging WhatsApp. Facebook Inc stock has struggled since the election, underperforming the S&P 500 Index (SPX) by 15 percentage points during the past two months to trade at $119.24. While short interest increased by 35% in the past two reporting periods, just 1% of the stock's float is sold short, meaning there's plenty of room for more bears to jump on, which could pressure FB shares further. 

  • ACAD is up 18.2% in electronic trading, after the company announced its drug for psychosis in Alzheimer's patients, pimavanserin, met its goals in a mid-stage study. The shares closed at $25.43 on Monday, and while the pending move would put them atop the $30 that acted as resistance last month, ACADIA Pharmaceuticals Inc. would still be trading below its year-to-date breakeven point. At the same time, ACAD options traders should be pleased with today's potential gains. For instance, call buying has more than tripled put buying during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). 

  • BBRY is looking at a 1.7% advance when the market opens, after the company posted better-than-expected adjusted earnings for the third quarter. As of last night's close at $7.71, BlackBerry Ltd was down almost 17% year-to-date, but if the shares close higher today, it'll mark the third straight quarter they've done so in the session immediately following an earnings release. And if the stock can continue to battle back, it could encourage some bearish analysts to raise their ratings. At the moment, just three of 15 brokerage firms recommend buying BBRY. 

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Published on Dec 20, 2016 at 9:58 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Analyst Downgrades
Analysts are weighing in on circuit maker NeoPhotonics Corp (NYSE:NPTN), as well as drug stocks Cempra Inc (NASDAQ:CEMP) and Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). Here's a quick roundup of today's bearish brokerage notes on NPTN, CEMP, and TEVA.

  • NPTN is plunging 10.4% to $11.19 after the company downwardly revised its fourth-quarter outlook, citing delayed shipments, while also announcing it will sell its low-speed transceiver business to APAT Optoelectronics Components Co. for $26.4 million. At least four analysts cut their price targets on the stock following the news, including B. Riley, which set the lowest bar, at $11. This morning's drop has NeoPhotonics Corp surrendering most of its year-to-date gains, giving up its foothold above the 320-day moving average. Short sellers could be cheering this price action, however. These bearish bets surged by nearly 43% during the most recent two-week reporting period, and now account for about 7% of NPTN's total float. 

  • SunTrust Robinson downgraded CEMP to "sell" all the way from "buy," and slashed its price target on the stock to $5 from $18 -- representing record-low territory for the shares. CEMP has slid 3.8% to $6.93 this morning, widening its year-to-date deficit to almost 78%. The equity has failed to make much upward progress since its huge drug-data-induced bear gap in early November, but it appears options traders had been banking on a comeback. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Cempra Inc saw 6.83 calls purchased for every put over the past 10 sessions. What's more, the resulting call/put volume ratio ranks higher than 71% of the past year's readings.

  • TEVA is 0.2% higher at $36.66 despite a price-target cut to $45 from $47 at Credit Suisse. Teva Pharmaceutical Industries Ltd has been sliding down the charts all year, dropping 44.2% in 2016, with the descending 30-day moving average providing pressure on the share since August. Should the stock resume this downward trend, more bearish attention from the brokerage bunch could send TEVA even lower. At present, more than half of the analysts following the security rate it a "buy" or better, and not one gives a "sell" recommendation. Moreover, the average 12-month price target of $59.20 sits at a 61.5% premium over current levels.
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