Buzz Stocks: Alibaba Group, Netflix, and Office Depot

Today's stocks to watch in the news include Alibaba Group Holding Ltd (BABA), Netflix, Inc. (NFLX), and Office Depot Inc (ODP)

Feb 4, 2015 at 9:26 AM
facebook twitter linkedin

U.S. stocks are poised to give back some recent gains this morning, following the price of crude lower. In company news, today's stocks to watch include online retailer Alibaba Group Holding Ltd (NYSE:BABA), streaming content provider Netflix, Inc. (NASDAQ:NFLX), and office supplies seller Office Depot Inc (NASDAQ:ODP).

  • BABA is conducting a drone-delivery trial to customers in Beijing today, and will later try it in Shanghai and Guangzhou. A set of remote-controlled helicopters will deliver parcels of ginger tea packets to customers who volunteered for the one-time test. Technically speaking, Alibaba Group Holding Ltd has fallen on hard times since topping out at $120 in mid-November, sliding 24.5% to trade at $90.61 -- including last week's earnings-induced bear gap, which sparked a rush of bearish brokerage attention. Additional negative notes could be on the horizon for BABA, considering 21 out of 22 covering analysts have doled out "buy" or better ratings -- compared to one "hold" and not a single "sell." Plus, the stock's consensus 12-month price target of $112.33 stands at a 24% premium to the current price.

  • NFLX went down for roughly one hour last night, though it remains unknown what caused the outage. On the charts, the equity has rebounded strongly, adding 31% since crushing earnings expectations the morning of Jan. 21, and settling at $456.92 last night. Options traders have responded in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In the 10 sessions since reporting quarterly results, NFLX's 10-day call/put volume ratio across those exchanges has jumped to 1.06 from 1.01 -- higher than two-thirds of all other readings from the last year.

  • It's official: ODP is being purchased by Staples, Inc. (NASDAQ:SPLS) for $6.3 billion, in a deal that will likely draw the attention of antitrust regulators. The cash-and-stock offer values ODP at $11 per share, representing an 18.5% premium to Tuesday's close at $9.28. Thanks to the news, Office Depot Inc is sitting 3.2% higher ahead of the bell, which comes on the heels of yesterday's nearly 22% gain, and is sure to please a recent crop of option bulls. Longer term, options traders have displayed a pronounced preference for long calls over puts, per ODP's 50-day ISE/CBOE/PHLX call/put volume ratio of 15.75 -- which sits in the 73rd percentile of its annual range.

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners