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Earnings Preview: Barrick Gold Corporation, Angie's List, Inc., and SunEdison, Inc.

Analyzing recent option activity on Barrick Gold Corporation (USA) (ABX), Angie's List Inc (ANGI), and Sunedison Inc (SUNE)

Feb 17, 2015 at 1:39 PM
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Among the stocks gearing up to report earnings tomorrow are gold concern Barrick Gold Corporation (USA) (NYSE:ABX), online review firm Angie's List Inc (NASDAQ:ANGI) and alternative energy issue Sunedison Inc (NYSE:SUNE). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on ABX, ANGI, and SUNE.

  • ABX, which will release fourth-quarter earnings data tomorrow night, has been in recovery mode, with the shares up 12.4% year-to-date to hit $12.08. Despite the stock's turnaround, Barrick Gold Corporation's Schaeffer's put/call open interest ratio (SOIR) of 0.83 ranks in the 88th percentile of its annual range, suggesting that near-term traders are more put-biased than usual. Traders looking for negative post-earnings price action have history on their side; in the session following its last six earnings reports, ABX has lost value five times, including a 4.2% dip this past October. Short-term speculators are paying relatively fair prices for the stock's options, as its Schaeffer's Volatility Index (SVI) of 47% sits in the 57th percentile of all similar annual readings.

  • Ahead of tomorrow morning's earnings release, ANGI is down 0.7% to reach $4.99, translating into a 20% year-to-date loss. However, traders are still optimistic on the equity. Over the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.95 Angie's List Inc calls have been bought to open for every put. Historically, in the session following its last four earnings reports, ANGI has lost an average of 11.1%. Near-term options for the equity are available for relatively inexpensive prices, as its SVI of 71% sits in the 23rd percentile of all similar readings taken over the past year.

  • The shares of SUNE have been climbing at a steady clip, with the stock up 45.3% year-over-year, including a 2.8% gain today, to hit $22.05. Although Sunedison Inc, has been a technical beast, short-term puts are prevalent heading into tomorrow night's earnings release, as the stock's SOIR of 0.60 sits just 6 percentage points away from an annual pessimistic peak. What's more, in the session following its last five earnings reports, SUNE has averaged a 2.9% gain. Another upbeat earnings reactions could spook the bears in the options world. Traders are paying historically cheap prices for their short-term bets on the equity, as SUNE's SVI of 57% reads in the 28th percentile of its annual range.

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