Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on May 26, 2015 at 10:49 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Stocks On the Move
Goldman Sachs added Dollar General Corp. (NYSE:DG) to its "conviction buy" list this morning, and raised its price target to $87 from $85, in never-before-seen territory. The stock is failing to capitalize on the bullish brokerage note -- down 0.1% at $73.46, and paring its year-to-date gain to 3.9% -- most likely to the disappointment of recent option traders.

In fact, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open more than eight calls for each put over the past 50 sessions. What's more, the resultant call/put volume ratio of 8.03 sits just 12 percentage points from a 52-week peak.

Echoing this call-skewed trend is DG's Schaeffer's put/call open interest ratio (SOIR) of 0.22. Not only does this show that call open interest more than quadruples put open interest among options expiring in three months or less, but it ranks lower than 76% of similar readings taken in the past year. Simply stated, speculative traders are more call-focused than usual toward DG.

It's more of a mixed bag outside of the options pits, where nine analysts maintain a "strong buy" rating, versus nine "holds" or worse. Additionally, the average 12-month price target of $81.45 stands at an 11% premium to current trading levels, but also represents a record high.

Meanwhile, short interest jumped more than 24% in the latest reporting period, but still only accounts for 2.1% of the stock's available float. Looking ahead, Dollar General Corp. (NYSE:DG) is slated to host its annual shareholder meeting tomorrow, and unveil first-quarter earnings one week from today.
Published on May 26, 2015 at 11:26 AM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity

Calls are crossing at seven times the expected intraday pace in FXCM Inc's (NYSE:FXCM) options pits today. By the numbers, over 10,000 calls have been exchanged, versus just under 800 puts. The most popular contract is the June 1.50 call, and it looks like it's being bought to open. In other words, speculators expect the shares to extend gains above $1.50 by the close on Friday, June 19, when front-month options expire.

This is just more of the same from FXCM's option traders, as 7.88 calls have been bought to open for each put during the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This may not all be bullish activity, though. Over 27% of the stock's float is sold short, and would take more than two weeks to repurchase, at average daily volumes. It's likely some of the recent call buying has been from bears hedging their bets. Plus, the equity's low price means there's more upside than downside potential.

There's definitely no love coming from analysts. All four covering brokerage firms say the stock is a "hold" or worse. Plus, FXCM's consensus 12-month price target sits at $1.02 -- territory the shares have never fallen to.

It's not like you can blame the doubters, though, with FXCM Inc (NYSE:FXCM) dropping over 90% of its value in 2015. Still, the stock is trying to fight back, 32.8% higher today at $1.63. The shares could be seeing a lift from Friday's news that the company is purchasing Citigroup Inc's (NYSE:C) foreign-exchange accounts

Published on May 22, 2015 at 12:02 PM
Updated on Mar 19, 2021 at 7:15 AM

Analysts are weighing in today on beauty products peddler Jumei International Holding Ltd (ADR) (NYSE:JMEI), medical device manufacturer Rewalk Robotics Ltd (NASDAQ:RWLK), and apparel retailer Aeropostale Inc (NYSE:ARO). Here's a quick roundup of today's brokerage notes on JMEI, RWLK, and ARO.

  • JMEI is getting crushed around midday, as traders disregard the company's first-quarter earnings beat and a pair of bullish brokerage notes. Specifically, Macquarie upgraded the stock to "outperform" from "neutral," and Piper Jaffray lifted its price target to $25 from $16. At last check, Jumei International Holding Ltd was 6.4% lower at $26.25 -- but has still roughly doubled on a year-to-date basis. This is bad news for a recent crop of call buyers. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), JMEI has amassed a call/put volume ratio of 9.19 -- higher than 78% of comparable readings from the past year.

  • On the other hand, RWLK is erupting on the heels of an upbeat note from Canaccord Genuity -- which raised its assessment of the stock to "buy" from "hold," and its price target to $17 from $11. However, despite the shares 16.6% surge to trade at $12.90, they remain 31.7% lower year-to-date -- and earlier ran up against resistance at their 80-day moving average, currently located at $13.99. Short sellers are likely feeling the heat, as nearly 13% of Rewalk Robotics Ltd's float is sold short -- which would take more than a week to repurchase, at the equity's typical daily trading levels.

  • Finally, ARO is taking it on the chin, down 13.2% at $2.25 -- bringing the shares into negative year-to-date territory. The selling pressure comes courtesy of weaker-than-expected first-quarter results and disappointing current-quarter guidance, as well as a subsequent round of bearish analyst attention. Specifically, no fewer than seven brokerage firms reduced their price targets on Aeropostale Inc, with Topeka Capital and UBS trimming their targets to $2.25. Meanwhile, SunTrust Robinson cut its price target to $2.50, saying it continues "to be concerned that the brand is substantially less relevant." Traders have been betting bearishly on the equity for some time now. ARO's 50-day ISE/CBOE/PHLX put/call volume ratio stands at an annual high of 0.50.
Published on May 22, 2015 at 1:38 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity
China-based stocks are putting on a show this afternoon, with a number of notable names sharply higher. Among the equities making impressive upward moves are Youku Tudou Inc (ADR) (NYSE:YOKU) and E Commerce China Dangdang Inc (ADR) (NYSE:DANG). All the while, options traders are rolling the dice on additional short-term gains.

Diving right in, YOKU was last seen 13.3% higher at $30.55, and is fresh off an annual peak of $31.40 -- the second straight day in which it's notched this milestone. As such, calls are being exchanged at five times the usual intraday rate, and new positions are being purchased at the June 35 call. In other words, the buyers expect YOKU will take out $35 -- a mark last cleared in March 2014 -- by the close on Friday, June 19, when front-month options expire.

Today's activity is unusually bullish for the stock, despite its more than 71% year-to-date lead. For one, almost 17% of YOKU's float is sold short -- which would take about six days to buy back, at average daily trading volumes. For another, during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has racked up a put/call volume ratio of 1.17 -- in the 82nd annual percentile.

Shifting our focus to DANG, today's 9.5% pop has the stock sitting on a 12.5% year-to-date advance at $10.45. The security's intraday peak of $10.58 also represents territory not charted since early December.

Meanwhile, DANG calls are trading at eight times the volume expected at this point in the session, and six times the rate of puts. Possible buy-to-open activity is detected at the June 11 call, as speculators wager on the stock to topple the strike by June expiration.

However, unlike Youku Tudou Inc (NYSE:YOKU), call buying is the norm on E Commerce China Dangdang Inc (NYSE:DANG). During the past 10 days at the ISE, CBOE, and PHLX, more than 17 DANG calls have been bought to open for every put. The resultant call/put volume ratio of 17.05 is higher than four-fifths of similar readings from the previous 12 months.

Published on May 22, 2015 at 1:56 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity
Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) is soaring today -- perhaps getting a boost from a generally bullish bias in Asian stocks. Regardless of the reason, the shares were last seen up 5.7% at $6.68, and on pace to close north of their 50-day moving average for the first time since March 13. The positive price action has sparked a rush toward HIMX calls, with the contracts outpacing puts by 6-to-1 ratio.

Most active is the equity's September 7 call, where it look as if some of the activity is of the buy-to-open kind -- a theory echoed by data from the International Securities Exchange (ISE). If traders are indeed purchasing new positions here, the goal is for HIMX to topple $7 by the close on Friday, Sept. 18 -- when the series expires. Amid today's pop, delta on the call has jumped to 0.37 from 0.25 at last night's close, signaling an increased probability of an in-the-money finish.

Today's penchant for calls over puts just mirrors the broader trend seen in the security's options pits. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 9,295 calls versus just 140 puts over the past two weeks. What's more, the resultant call/put volume ratio of 66.39 rests just 8 percentage points from a 52-week peak.

Meanwhile, now appears to be an opportune time to purchase near-term options on Himax Technologies, Inc. (NASDAQ:HIMX). Not only does the stock's Schaeffer's Volatility Index (SVI) of 47% sit below 98% of all similar readings taken in the past year, but its 30-day at-the-money implied volatility hit a 52-week low earlier. Simply stated, the security's short-term options are currently priced at attractive levels, historically speaking.
Published on May 22, 2015 at 2:05 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity

M&A speculation is running rampant ahead of the holiday weekend, with cloud concern Salesforce.com, inc. (NYSE:CRM), automotive marketing firm Autobytel Inc. (NASDAQ:ABTL), and healthcare concern CIGNA Corporation (NYSE:CI) among the companies making noise. What's more, the trio's options are flying off the shelves as traders place bullish bets.

CRM was last seen 3.2% higher at $75.29, amid reports the company did, in fact, hold "significant" talks with Microsoft Corporation (NASDAQ:MSFT) this summer, CNBC said. However, MSFT's alleged bid of $55 billion for CRM was rejected, and sources said the pair isn't re-engaged. Nevertheless, Salesforce.com, inc. options traders are betting bullishly today, with calls crossing at twice the average intraday pace. It looks like speculators are buying to open the June 80 call amid hopes for CRM to surmount the round-number strike -- and conquer its all-time high of $78.46, tagged when the aforementioned MSFT rumors hit the Street in late April -- by the close on Friday, June 19, when front-month options expire 

ABTL has skyrocketed 31.9% to $18, and earlier notched a fresh annual high of $18.23, after the company lifted its 2015 guidance and said it's buying rival Dealix Corp. for $25 million. The shares are also benefiting from price-target hikes at Ascendiant Capital (to $20) and B. Riley (to $20.50). Autobytel Inc. calls are crossing at 23 times the normal intraday clip, with buy-to-open action spotted at the June and October 17.50-strike calls. By purchasing the calls to open, the buyers expect ABTL to extend its ascent through the respective expiration dates of June 19 and Friday, Oct. 16. 

CI soared around midday, and the Twittersphere is talking takeover speculation. After touching an all-time peak of $137.16, the stock was last seen 1.9% higher at $135.49. Meanwhile, CIGNA Corporation calls are hot, trading at six times the average afternoon pace. It seems traders are eyeing a move north of $140, buying to open the June and July 140-strike calls -- the two most active contracts so far. What's more, the equity's 30-day at-the-money implied volatility has rocketed 24.1% to 28.1% -- above 97% of all other readings from the past year.

Published on May 22, 2015 at 2:19 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity

Call buying has exploded on Quest Diagnostics Inc (NYSE:DGX), with M&A rumors -- a theme for today -- lifting the stock all the way to a record peak of $89. In fact, trading on the stock was halted earlier amid the takeover chatter. The shares have since pared these gains to 6.8% to trade at $78.88, with call volume running at 88 times what's normally seen at this point in the day. The most popular contract is the June 80 call, as it appears traders are buying it to open, hoping another surge above $80 by June options expiration.

This bullish sentiment among option traders isn't a new phenomenon. Over the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DGX has amassed a call/put volume ratio of 2.66, which is only 2 percentage points from an annual high. This means calls have been bought to open over puts at a near-annual-high clip.

Outside the option pits, though, things are more bearish. Almost 13 million DGX shares are sold short, and at its average daily volumes, would take close to eight sessions to repurchase. In that case, a portion of the recent call buying could be a result of bears hedging their bets. Plus, of the 19 covering brokerage firms, 17 rate the security a "hold" or worse.

It's not like Quest Diagnostics Inc (NYSE:DGX) has been a laggard on the charts. Even before today, the shares had added roughly 29% year-over-year.

Published on May 22, 2015 at 2:35 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity
Sunedison Inc (NYSE:SUNE) calls have been in high demand in recent weeks, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The solar stock's 10-day call/put volume ratio checks in at 10.97 -- with nearly 11 calls bought to open for every put. What's more, this ratio rests just 9 percentage points from a 52-week high.

That trend is holding up today, amid SUNE's 3.6% gain to trade at $30.50 -- not to mention, its new six-year high of $30.57. By the numbers, 15,000 calls are on the tape -- nearly tripling the number of puts exchanged.

Digging deeper, the weekly 5/22 26.50-strike call is SUNE's most active option. According to Trade-Alert, one speculator bought to open a sweep of 5,500 contracts at the in-the-money strike, for $3.90 apiece -- or a total of more than $2.1 million (premium * number of contracts * 100 shares per contract). In order to profit at tonight's expiration, the buyer needs the stock to settle above breakeven at $30.40 (strike plus premium paid).

However, not everyone is bullish on Sunedison Inc (NYSE:SUNE). A lofty 36% of the stock's float is dedicated to short interest, which represents 11 times the average daily trading volume. In fact, some of the recent call buying -- especially at out-of-the-money strikes -- could have been at the hands of short sellers seeking upside protection.
Published on May 22, 2015 at 2:50 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity
It's been a big week on the M&A front, with Altera Corporation (NASDAQ:ALTR) making waves on Monday, and a trio of notable names snagging headlines today. Time Warner Cable Inc (NYSE:TWC) has also been in the spotlight, as speculation swirls that the company is in serious talks with both Altice and Charter Communications, Inc. (NASDAQ:CHTR). The reports have shares of TWC up 3.3% at $170.99 -- and fresh off a record high of $172.21 -- but option traders are calling for more.

Taking a quick step back, TWC calls are crossing at two times the average intraday rate, and are outpacing puts by a 2-to-1 margin. Most active by a mile is the equity's June 175 call, where the International Securities Exchange (ISE) indicates new positions are being purchased for a volume-weighted average price (VWAP) of $3.60.

Based on this average entry price, speculators need TWC to rally through $178.60 (strike plus VWAP) by the close on Friday, June 19 -- when front-month options expire -- or into never-before-seen waters. Since last night's close, delta on the call has jumped to 0.40 from 0.25, indicating an increased chance the option will be in the money at expiration.

Expanding the sentiment scope shows today's accelerated call activity is just more of the same. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TWC's 50-day call/put volume ratio of 1.42 rests in the 86th annual percentile.

Echoing this is Time Warner Cable Inc's (NYSE:TWC) Schaeffer's put/call open interest ratio (SOIR) of 0.97, which sits below 83% of all similar readings taken in the past year. In other words, short-term speculators are more call-heavy than usual toward TWC.
Published on May 22, 2015 at 3:21 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Intraday Option Activity

As Synaptics, Incorporated (NASDAQ:SYNA) moves higher on the charts, call buying has been picking up, with the contracts crossing at three times the expected intraday pace. What's more, each of SYNA's 10 most active contracts are calls, with the July 100 strike leading the way. Data suggests traders are buying to open these contracts, betting on the shares to topple the century mark -- which would mark an all-time high -- by the close on Friday, July 17, when the contracts expire.

This is just more of the same from the equity's option traders. Over 11 calls have been bought to open for each put during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The resultant 10-day call/put volume ratio of 11.31 sits just 5 percentage points from an annual bullish extreme.

Supporting this is SYNA's Schaeffer's put/call open interest ratio (SOIR), which at 0.46 reveals call open interest doubles put open interest among contracts expiring within three months or less. Additionally, this reading is lower than 96% of all similar readings from the past 12 months, pointing to a much stronger-than-usual preference for calls over puts.

It's no surprise to see this bullish betting on Synaptics, Incorporated (NASDAQ:SYNA). So far in 2015, the shares have tacked on 40.6% to trade at $96.78, touching a record peak of $97.57 earlier today, after Mizuho started the equity with a "buy" rating and a $115 price target.

Published on Jul 17, 2015 at 12:13 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Analyst Update

Analysts are weighing in today on electronics retailer Best Buy Co Inc (NYSE:BBY), biotech Axovant Sciences Ltd (NYSE:AXON), and medical software developer Allscripts Healthcare Solutions Inc (NASDAQ:MDRX). Here's a quick roundup of today's brokerage notes on BBY, AXON, and MDRX.

  • BBY is getting demolished, after BofA-Merrill Lynch downgraded its rating to "underperform" from "buy" and cut its price target to $32 from $45. In particular, the firm cited concerns that the retailer's "continued reinvestment in the business" is "offsetting strong cost cutting efforts." At last check, Best Buy Co Inc has surrendered 6.2% to trade at $32.73, making it the worst percentage loser on the S&P 500 Index (SPX), and bringing its year-to-date loss to 16%. Currently, the stock is in danger of closing below its 120-week moving average for the first time since last April. Meanwhile, short sellers are anticipating an extended drop. Almost 12% of BBY's float is sold short, which would take nine sessions to cover, at its average daily volume.

  • AXON is soaring after JMP Securities started coverage with a "market outperform" opinion and $36 price target -- in uncharted territory. So far, the stock has advanced 19.7% to trade at $20.99 -- though this is nowhere near its all-time high of $31.17, touched the day of its June 11 IPO. More broadly speaking, the brokerage bunch has expressed confidence in Axovant Sciences Ltd. Three-quarters of analysts rate the shares a "buy" or better, and the consensus 12-month price target of $29.17 stands at a 39% premium to current levels.

  • MDRX is getting a big-time lift from an encouraging second-quarter forecast, which was followed by a pair of price-target hikes to $17 at Baird and Raymond James. Both firms also underscored "outperform" endorsements. Today, the stock has shot 10.2% higher to $15.02, putting it in territory last explored in early September. Options traders aren't buying the hype, though. During the last 50 days, Allscripts Healthcare Solutions Inc has amassed a put/call volume ratio of 0.62 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio outstrips nearly four-fifths of similar readings taken in the last year, suggesting a stronger-than-usual preference for long puts over calls.
Published on Jul 17, 2015 at 1:25 PM
Updated on Mar 19, 2021 at 7:15 AM
  • Earnings Preview

It was a big week on the earnings front -- and Google Inc (NASDAQ:GOOGL) is just one name reaping the rewards of strong results -- with next week's action really heating up. Among the many names getting ready to report second-quarter results are oil-and-gas issue Halliburton Company (NYSE:HAL), toy maker Hasbro, Inc. (NASDAQ:HAS), and tech titan International Business Machines Corp. (NYSE:IBM). Below, we'll take the pre-earnings temparature of HAL, HAS, and IBM.

  • HAL is slated to step onto the earnings stage first thing Monday morning. Over the past eight quarters, the stock has averaged a single-session post-earnings move of 1.8%, but this time around, the options market is betting on a bigger 4.4% swing -- based on HAL's near-term at-the-money (ATM) straddle. Short-term traders are more put-skewed than usual, per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.07, which rests higher than 87% of all similar readings taken in the past year. Those purchasing options are currently willing to pay a bit more, too. Halliburton Company's 30-day ATM implied volatility (IV) of 31.2% ranks in the 62nd annual percentile. In other words, premium on the stock's near-term options is pricing in elevated volatility levels. On the charts, HAL has surrendered 20% since being rejected by the round-number $50 mark in early May. Today, however, the equity is up 0.3% at $40.30, thanks to a price-target hike to $66 from $54 at Deutsche Bank.

  • HAS will also unveil its results Monday morning, and option traders are hoping the stock gets a better reaction than sector peer Mattel, Inc. (NASDAQ:MAT). Specifically, the security's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.11 ranks in the 76th percentile of its annual range, meaning calls have been bought to open over puts at an accelerated clip in recent months. Premium on the equity's near-term options is relatively inflated at the moment -- HAS' 30-day ATM IV of 25.3% is just 11 percentage points from a 52-week peak. Looking back over the past eight quarters, Hasbro, Inc. has, on average, swung 5.3% in the session subsequent to reporting, but this time, the stock's near-term ATM straddle is pricing in a loftier 6.3% move. Technically speaking, the shares have added an impressive 41% year-to-date. Plus, they topped out at a record peak of $79 earlier, and were last seen lingering near $77.60.

  • IBM will take its turn in the earnings confessional after Monday's close, and ahead of the event, the stock is up 0.6% at $171.93 -- widening its year-to-date advance to 7.2%. More recently, the security toppled its 60-day moving average earlier this week -- a trendline that had served as resistance since early June, but could now be switching to a supportive role. Next week, the options market is expecting IBM to swing 3.6% in the wake of reporting -- according to the equity's short-term ATM straddle -- slightly more than the 3.3% single-session post-earnings move IBM has averaged during the past eight quarters. Option traders, meanwhile, have been loading up on long calls in recent months. At the ISE, CBOE, and PHLX, International Business Machines Corp.'s 50-day call/put volume ratio of 1.56 sits in the 88th annual percentile. The equity's short-term options can currently be had for relatively middling prices, as its Schaeffer's Volatility Index (SVI) of 19% ranks higher than 56% of comparable readings taken in the past year.

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