Buzz Stocks: Lumber Liquidators, Citigroup, Dollar General

Today's stocks to watch in the news include Lumber Liquidators Holdings Inc (LL), Citigroup Inc (C), and Dollar General Corp. (DG)

Mar 12, 2015 at 9:26 AM
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Futures are poised to track their Asian counterparts into the green today, following an unexpected central bank move. Meanwhile, among specific equities in focus are flooring firm Lumber Liquidators Holdings Inc (NYSE:LL), big bank Citigroup Inc (NYSE:C), and discount retailer Dollar General Corp. (NYSE:DG).

  • LL is up nearly 6% in electronic trading, after the company defended its safety protocols, and said it would provide free indoor air quality testing to customers. This comes in response to recent allegations -- and a potential government investigation -- that its products contain high levels of carcinogens. The firm also said it could not provide a fiscal 2015 forecast at the moment. These fundamental follies have sent Lumber Liquidators Holdings Inc into a tailspin in recent weeks, with the shares off 52.4% from their pre-earnings Feb. 24 close at $68.78 to churn at $32.73. Short-term speculators, meanwhile, have shown a clear preference for calls over puts, as evidenced by LL's Schaeffer's put/call open interest ratio (SOIR) of 1.27, which ranks lower than all comparable readings taken in the past year. In other words, speculative traders are more call-heavy now than they've been at any other point during the past 12 months.

  • C is flirting with a 4% lead in pre-market trading, after the firm's capital plan received top billing in the second round of the Federal Reserve's annual stress tests -- its first pass in three years. C said it will up its dividend to 5 cents per share, and increase its buyback program to $7.8 billion. Technically speaking, it's been a slow start to the year, with shares of C off 3.3%. However, the brokerage bunch remains firmly in Citigroup Inc's corner. Of the 18 analysts covering the shares, 16 maintain a "buy" or better rating, versus two "holds," and not a single "sell." Plus, the average 12-month price target of $61.33 stands at a 17.2% premium to last night's close at $52.33, as well as in territory not charted since January 2009.

  • After settling last night at $71.45, DG is poised to pop nearly 3% out of the gate, following reports the company authorized a $1 billion share repurchase program and will open a number of new stores ahead of the impending merger of its two rivals. Additionally, Dollar General Corp. reported fourth-quarter earnings that arrived in line with estimates and a lower-than-forecast full-year forecast, and announced the retirement of its Chief Financial Officer David Tehle. Today's projected post-earnings price move is par for the course, and has DG on pace to add to its already impressive 20.5% year-over-year gain, and make a move into uncharted waters. This could have some options bears throwing in the towel. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DG's 50-day put/call volume ratio of 1.68 ranks just 1 percentage point from a 52-week peak.
 

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