Lace 'Em Up: NIKE, Skechers, and Deckers Outdoor

Three shoemakers doing well today are Nike Inc (NYSE:NKE), Skechers USA Inc (NYSE:SKX), and Deckers Outdoor Corp (NYSE:DECK)

Jun 18, 2015 at 11:41 AM
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U.S. equities are off to a hot start, with the Dow surging higher in mid-morning trading. Three stocks in particular seeing notable gains are shoemakers Nike Inc (NYSE:NKE), Skechers USA Inc (NYSE:SKX), and Deckers Outdoor Corp (NYSE:DECK). Below, we'll take a close look at what has NKE, SKX, and DECK moving higher.

  • NKE has jumped 1.5% to trade at an all-time high of $106.36. On a long-term basis, the security has put in a solid performance, with a year-over-year lead of over 40%. The shares have been riding atop their rising 10-week moving average since late February. Meanwhile, in the options pits, Nike Inc's Schaeffer's put/call open interest ratio (SOIR) stands at 0.78, revealing that call open interest outweighs put open interest in the stock's front three-months' series. Plus, this ratio is lower than 71% of readings from the past year, indicating these speculative traders are more call-skewed than usual. This trend is continuing today, as NKE calls are crossing at five times the expected intraday pace. Looking ahead, the company will release fiscal fourth-quarter earnings a week from today.

  • SKX, too, touched a record peak earlier ($112.49), and was last seen at $112. The stock has been simply unstoppable in 2015, more than doubling in value. In the meantime, short sellers have been fleeing in bunches, as short interest plummeted almost 50% during the two most recent reporting periods. Now, however, the pessimism appears to have sprung to Skechers USA Inc's option pits. For one, the stock's SOIR sits at an annual extreme of 0.93. Plus, put buying has been much more popular than normal, according to SKX's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.91 -- higher than 87% of readings from the past year. However, given the stock's technical track record, some of this put activity may be at the hands of shareholders protecting paper profits.

  • Although DECK is 1.9% higher today at $75.73, it's the odd man out in this group, as it's far from its all-time high of $118.90 from October 2011. Plus, the shares haven't done well on the charts, coming into today 18% below their year-to-date breakeven mark. This may be part of the reason for the bearish analyst attention, as nine of 15 brokerage firms say Deckers Outdoor Corp is just a "hold." Option traders seem to be optimistic, however, according to the stock's 50-day ISE/CBOE/PHLX call/put volume ratio. This reading of 2.15 is only 1 percentage point from an annual high. Still, demand for DECK's short-term options appears muted today. The equity's 30-day at-the-money implied volatility is only at 27% -- lower than 91% of readings from the past 12 months. 
 

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