Buzz Stocks: FedEx, Herbalife, and Retrophin Inc.

Today's stocks to watch in the news include FedEx Corporation (FDX), Herbalife Ltd. (HLF), and Retrophin Inc (RTRX)

Mar 18, 2015 at 9:26 AM
facebook twitter linkedin


U.S. benchmarks look like they're ready for another rough day, as investors grow nervous in the hours leading up to the Federal Open Market Committee's (FOMC) policy update. In company news, today's stocks to watch include package delivery specialist FedEx Corporation (NYSE:FDX), nutritional supplements marketer Herbalife Ltd. (NYSE:HLF), and biopharmaceutical issue Retrophin Inc (NASDAQ:RTRX).

  • Fiscal third-quarter earnings for FDX handily topped expectations, with operating margins jumping to 8.5% from 7.3% year-over-year. However, quarterly sales came in south of the Street's consensus estimate, as did the company's full-year profit forecast. As such, FedEx Corporation is sitting 2.2% lower ahead of the open, threatening to send the shares into negative year-to-date territory. While the stock has churned in the $170-$180 range for most of 2015 -- and closed last night at $175.71 -- optimism has picked up in the options arena. FDX's 10-day call/put volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) rests at 2.25, in the 96th percentile of its annual range.

  • HLF is pointed nearly 5% higher in electronic trading, after a lawsuit filed by a jilted investor was dismissed. The court ruled that the shareholder, Abdul Awad, failed to demonstrate that his losses resulted from company fraud, as Bill Ackman's allegations -- which have recently been called into question -- do not constitute evidence. Looking to the charts, it's understandable that Awad would be upset -- Herbalife Ltd. has plunged 35% year-over-year to trade at $34.43. This is good news for short sellers, though, of which there are many -- including Ackman. Two-fifths of HLF's float is sold short, which represents more than two weeks' worth of trading volume, at typical daily levels.

  • RTRX is up roughly 32% in pre-market trading, after the Food and Drug Administration (FDA) approved privately held Asklepion Pharmaceuticals LLC's bile acid synthesis drug, Cholbam. Consequently, as previously agreed upon, RTRX will purchase the worldwide rights for the treatment from Asklepion for $28 million in cash, plus more than 661,000 RTRX shares. Taking a step back, Retrophin Inc has been a technical juggernaut in 2015, adding 20.6% to land at $14.76. Additional upside could be forthcoming, as short sellers rush to cover their bets. Over one-quarter of RTRX's float is sold short, which would take about 14 sessions to buy back, at typical trading levels.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners