Buzz Stocks: Honeywell, Hertz, Valeant Pharmaceuticals

Today's stocks to watch in the news include Honeywell International Inc. (NYSE:HON), Hertz Global Holdings Inc (NYSE:HTZ), and Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

by Karee Venema

Published on Jul 17, 2015 at 9:28 AM
Updated on Jul 2, 2020 at 12:13 PM

Stocks are mixed this morning, although the Nasdaq Composite looks set to hit another notable milestone thanks to well-received earnings from Google Inc (NASDAQ:GOOGL). Meanwhile, among other equities in focus are aerospace issue Honeywell International Inc. (NYSE:HON), car rental concern Hertz Global Holdings Inc (NYSE:HTZ), and drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX).

  • HON has been bouncing higher since hitting an annual low of $82.89 in mid-October, tacking on almost 25% to rest at $103.57. The stock looks poised to extend this momentum today -- up 2.3% in electronic trading, slightly less than the options market was expecting -- after the company posted better-than-expected second-quarter earnings and upwardly revised the low end of its full-year profit forecast. Option bears could start hitting the bricks, should today's projected price move pan out -- which could fuel Honeywell International Inc.'s fire. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HON's 10-day put/call volume ratio of 2.69 ranks in the 98th annual percentile.

  • HTZ is poised to pop 18% out of the gate, after the firm restated its financial statements for 2011 through 2013, and upped its 2015 annual cost savings target by $300 million. Hertz Global Holdings Inc also reiterated its $1 billion share buyback plan and said it expects the spinoff of Hertz Equipment Rental Corp to be wrapped up in the fiscal second quarter. The stock could certainly use a shot in the arm, considering it's shed almost a third of its value year-to-date -- and hit a two-year low of $16.65 last Thursday -- to linger at $16.99. Option traders have kept the faith, though, per the equity's 50-day ISE/CBOE/PHLX call/put volume ratio of 6.07, which sits higher than 99% of all similar readings taken in the past 52 weeks. In other words, calls have been bought to open over puts with more rapidity just 1% of the time within the past year.

  • VRX is set to open in the red, following the firm's latest M&A announcement. Specifically, Valeant Pharmaceuticals Intl Inc said it will buy Egypt's biggest drugmaker, Amoun Pharmaceutical, for roughly $800 million as it looks to expand in the Middle East and North Africa. Longer term, the shares have had a standout run in 2015, up almost 67% at $238.85. Short-term speculators, meanwhile, have shown a preference for puts over calls, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.90. What's more, this ratio ranks in the 75th annual percentile, meaning speculative traders are more put-skewed than usual. Looking ahead, VRX could draw even more attention next week, when it unveils its second-quarter earnings report.

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