Buzz Stocks: Lumber Liquidators, ARIAD, XPO Logistics

Today's stocks to watch include Lumber Liquidators Holdings Inc (LL), Ariad Pharmaceuticals, Inc. (ARIA), and XPO Logistics Inc (XPO)

Apr 29, 2015 at 9:43 AM
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Domestic indexes are slightly below breakeven this morning, ahead of what could be a volatile session, given today's economic docket. Among the equities in focus are flooring enthusiasts Lumber Liquidators Holdings Inc (NYSE:LL), oncology concern Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA), and transportation services provider XPO Logistics Inc (NYSE:XPO).

  • No stranger to dramatic declines, LL has lost another 15.9% this morning, last seen at $28.10, after another series of unfortunate events. For one, the company posted disappointing first-quarter numbers, while announcing its chief financial officer will be stepping down. Also, it was reported the Department of Justice is in fact seeking to charge the company for allegedly offering flooring with high levels of formaldehyde. With today's decline, Lumber Liquidators Holdings Inc has lost more than half its value in 2015, and short interest has unsurprisingly been picking up. During the two most recent reporting periods, short interest grew 11.6%, and now represents nearly 28% of LL's float. However, given the equity's average daily volumes, it would only take these bears just 1.2 days to buy back their bets.

  • ARIA, on the other hand, is gaining this morning, after the company agreed to settle a proxy battle with Sarissa Capital Management. As part of the agreement, ARIAD Pharmaceuticals, Inc. CEO Harvey J. Berger, M.D., announced his retirement, effective no later than Dec. 31, 2015. As such, the shares are 2.8% higher at $9.12, continuing their strong technical performance of late. During the past three months, ARIA has outdone the S&P 500 Index (SPX) by more than 33 percentage points -- though the stock has given back some ground during the past two weeks, only to find support from its 20-day moving average. Looking to the analysts, sentiment is perfectly split, with half of the covering brokerage firms deeming the shares a "strong buy," and the other half issuing "hold" recommendations.

  • Lastly, there's XPO​, which has made an upward move of 7.7% to find itself at $45.72, and earlier touched a record high of $48.52. The company announced it's buying Norbert Dentressangle SA, in a deal worth $3.5 billion. XPO Logistics Inc had already been a long-term outperformer, adding 58.7% during the past 12 months even before today's pop. The disparity between call buying and put buying in the security's options pits is mind-boggling. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 130 XPO calls have been bought to open for every put. Not surprisingly, the resultant 10-day call/put volume ratio of 130.20 points to a stronger preference for call buying than normal, sitting only 8 percentage points from an annual bullish peak.
 

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