Buzz Stocks: Coty, Starwood Hotels, and The Gap

Today's stocks to watch in the news include Coty Inc (NYSE:COTY), Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), and Gap Inc (NYSE:GPS)

Jun 16, 2015 at 9:30 AM
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U.S. markets look to be in for another rough day, with futures pointed lower ahead of the open. In company news, today's stocks to watch include cosmetics marketer Coty Inc (NYSE:COTY), hospitality expert Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), and apparel retailer Gap Inc (NYSE:GPS)

  • COTY has reportedly purchased three Procter & Gamble Co (NYSE:PG) units for up to $12 billion. The acquisition has shares of Coty Inc pointed 15.1% higher ahead of the bell, adding to their already impressive year-to-date gain of 26%. In fact, just last week, the stock touched a record peak of $26.38, and closed last night just below this level at $26.05. Options traders have responded by buying to open COTY calls over puts at a feverish pace in recent months, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the equity's 50-day call/put volume ratio of 15.22 ranks in the 90th annual percentile.

  • HOT announced plans to spin off its time-share business into a new public company called Vistana Signature Experiences Inc. On the charts, Starwood Hotels & Resorts Worldwide Inc has been consolidating in the $81-to-$82 region since hitting an all-time high of $87.99 in late April, closing at $81.76 yesterday. Despite being within striking distance of that technical milestone, half the analysts tracking the shares consider them worthy of just a "hold" rating. This could pave the way for future upgrades, which could be supportive of HOT.

  • GPS will be closing one-quarter of Gap stores in the coming years -- including 140 in 2015 -- due to weak sales. Roughly 250 corporate employees will also be laid off. Shifting gears, Gap Inc has struggled since its late-March year-to-date high of $43.90, down 13% to rest at $38.20 -- pressured by its 20-day moving average. Short sellers have been wagering on extended losses. During the two most recent reporting periods, short interest on GPS soared 44.4%, and now accounts for almost 9% of the stock's float. It would take about one week to repurchase all of these bearish bets, at the equity's average daily trading levels.
 

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