Buzz Stocks: First Solar, Rite Aid Corporation, Chico's

Today's stocks to watch in the news include First Solar, Inc. (FSLR), Rite Aid Corporation (RAD), and Chico's FAS, Inc. (CHS)

Feb 11, 2015 at 9:08 AM
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Futures are pointed lower this morning, as caution sets in ahead of today's highly anticipated meeting of European finance ministers regarding Greece's bailout program. Meanwhile, among specific equities in focus are alternative energy concern First Solar, Inc. (NASDAQ:FSLR), drugstore chain Rite Aid Corporation (NYSE:RAD), and specialty retailer Chico's FAS, Inc. (NYSE:CHS).

  • FSLR is up nearly 2% in electronic trading, on news that iPhone purveyor Apple Inc. (NASDAQ:AAPL) will purchase roughly $850 million in power from the company's California solar farm. The renewable energy will be used to power AAPL's new Silicon Valley campus, as well as various other offices and stores throughout the state. On the charts, FSLR has had an impressive February -- due in part to well-received news out of China -- adding nearly 15% to trade at $48.54. Against this backdrop, options traders have grown increasingly optimistic, as evidenced by First Solar, Inc.'s 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio, which has jumped to 2.36 from 0.89 on Jan. 30. What's more, the current ratio ranks in the 66th percentile of its annual range, meaning calls have been bought to open over puts at a faster-than-usual clip in recent weeks.

  • While yesterday's M&A headlines were dominated by Internet names, it's RAD that's grabbing attention this morning. Shares of the stock are up 9% ahead of the bell, following news the company is purchasing pharmacy benefit manager EnvisionRx from private equity firm TPG in a cash-and-stock deal worth about $2 billion. Technically speaking, Rite Aid Corporation has been gaining ground since hitting an annual low of $4.42 in mid-October, up 71.5% to settle last night at $7.58. In the options pits, though, short-term speculators are more put-heavy than usual, per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.70, which rests above 86% of all similar readings taken in the past year.

  • CHS is poised to pop 8% out of the gate -- and hit a new annual high -- amid reports the retailer could be a potential buyout target for private equity firm Sycamore Partners. Specifically, signs suggest the two are in talks, and are nearing a deal. Similar to RAD, CHS has also been charting a path higher since bottoming at a two-year low of $14.39 in mid-October, tacking on roughly 20% to linger at $17.25. However, options traders have shown a distinct preference for puts over calls of late. At the ISE, CBOE, and PHLX, for example, CHS' 10-day put/call volume ratio of 6.24 ranks in the 83rd annual percentile. Plus, Chico's FAS, Inc.'s SOIR of 1.27 rests just 3 percentage points from a 52-week peak, meaning short-term speculators have rarely been as put-heavy toward the stock as they are now.
 

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