Earnings Preview: Halliburton Company, Hasbro, Inc., and Steel Dynamics, Inc.

Analyzing recent option activity on Halliburton Company (HAL), Hasbro, Inc. (HAS), and Steel Dynamics, Inc. (STLD)

by Griffin Kruse

Published on Apr 17, 2015 at 12:36 PM
Updated on Apr 20, 2015 at 5:32 PM

Among the stocks gearing up to report earnings on Monday are oil-and-gas firm Halliburton Company (NYSE:HAL), toymaker Hasbro, Inc. (NASDAQ:HAS), and commodity concern Steel Dynamics, Inc. (NASDAQ:STLD). Below, we'll gauge the pre-earnings temperature of HAL, HAS, and STLD.

  • HAL has started to bounce back from the steep losses it suffered as crude prices tanked during the second half of 2014, with the shares up 19% year-to-date to reach $46.79. However, traders have remained skeptical of Halliburton Company, as its 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.12 is the highest reading taken over the past year. Meanwhile, HAL has notched gains in the session immediately following its last four earnings releases, for an average post-report boost of 1.5% over that time frame. Traders are paying historically tame prices for their short-term bets on the equity, as its Schaeffer's Volatility Index (SVI) of 30% ranks in the 27th percentile of its annual range.

  • HAS has been a technical standout, with the shares up 20% year-to-date to hit $66.03 -- and yesterday notching a fresh all-time high of $66.32. What's more, sector rival Mattel, Inc. (NASDAQ:MAT) posted impressive first-quarter earnings last night, raising expectations for Hasbro, Inc. ahead of its trip to the earnings confessional Monday morning. Traders have favored calls over puts in recent weeks, as HAS' 50-day ISE/CBOE/PHLX call/put volume ratio of 3.73 stands in the 98th percentile of its annual range. On the earnings front, the stock has been impressive, with the shares gaining an average of 2.8% in the session immediately following its last four earnings reports -- including a 7% pop in February. Near-term options are pricing in somewhat inflated volatility expectations, as HAS' SVI of 27% ranks higher than 72% of all similar readings from the past year.

  • STLD has been choppy over the past year, with the shares tumbling from a six-year high of $25.51 on Sept. 18 to a low of $16.51 on Jan. 29. Despite this rocky price action, the shares of Steel Dynamics, Inc. are still up 12.1% year-over-year to trade at $20.44. Sentiment in the options pits has been optimistic, as STLD's 10-day ISE/CBOE/PHLX call/put volume ratio of 40.12 is higher than 86% of all equivalent readings from the past 12 months. Meanwhile, in the session immediately following its last four earnings reports, STLD has been unpredictable, with results ranging from a 4.8% loss last April to a 4.5% gain in July. Traders are paying historically modest prices for their short-term bets on the stock, as its SVI of 35% sits in the 41st percentile of its annual range.

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