Buzz Stocks: Nike Inc, Transocean LTD, and Sears Holdings Corp

Today's stocks to watch in the news include NKE, RIG, and SHLD

by Alex Eppstein

Published on Nov 7, 2014 at 9:07 AM
Updated on Apr 20, 2015 at 5:32 PM

U.S. stocks are pointed higher this morning, despite mixed results in the latest nonfarm payrolls report. In company news, today's stocks to watch include athletic apparel giant Nike Inc (NYSE:NKE), offshore drilling contractor Transocean LTD (NYSE:RIG), and retailer Sears Holdings Corp (NASDAQ:SHLD).

  • NKE has dropped Minnesota Vikings running back Adrian Peterson from its promotional team. The decision stems from the athlete's indictment for child abuse in September -- a charge that was reduced to misdemeanor reckless assault in a plea agreement reached earlier this week. Meanwhile, shares of Nike Inc -- which were started with a "market perform" rating at FBR -- touched a record high of $95.09 yesterday, before settling at $94.60. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open puts over calls at a much faster-than-usual pace in recent months. Specifically, NKE's 50-day put/call volume ratio of 0.71 across those exchanges ranks in the 86th percentile of its annual range. Although some of these long puts may have been initiated by shareholders seeking protection, an unwinding among the "vanilla" bears could boost the security going forward.

  • RIG said it will take a nearly $2.8 billion impairment charge, as lower oil prices weigh on the value of the company's assets. Due to the decision, the firm has delayed the release of its quarterly earnings report from this morning to a yet-to-be-determined date. On the charts, Transocean LTD has fallen in sympathy with declining commodity prices, dropping 39.5% year-to-date at $29.92, and hitting a 10-year low of $27.08 on Tuesday. Not surprisingly, the brokerage bunch is decisively bearish toward the stock, as 16 out of 17 covering analysts have rated RIG a "hold" or "strong sell." Ahead of the bell, the shares are down roughly 5%.

  • Finally, SHLD may convert up to 300 of its retail locations to a real estate investment trust (REIT), which it would then offer to shareholders through a rights offering. This is just the company's latest attempt to raise cash, having already closed stores and sold off assets -- including part of its stake in Sears Canada. Technically speaking, Sears Holdings Corp has had a rough 2014, tumbling nearly 12% to its current perch at $32.67 -- though the stock is up about 23% in electronic trading, thanks to the news. Options traders see more downside ahead, though. SHLD's 10-day ISE/CBOE/PHLX put/call volume ratio of 2.25 sits higher than all but 12% of readings taken in the last year.

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