Buzz Stocks: Sears, Valeant Pharmaceuticals, Depomed

Today's stocks to watch include Sears Holdings Corp (SHLD), Valeant Pharmaceuticals Intl Inc (VRX), and Depomed Inc (DEPO)

Aug 20, 2015 at 10:02 AM
facebook twitter linkedin

U.S. stocks are lower, as a global sell-off and sinking oil prices once again weigh on Wall Street. Among the equities in focus are retailer Sears Holdings Corp (NASDAQ:SHLD), as well as pharmaceutical firms Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Depomed Inc (NASDAQ:DEPO).

  • SHLD is down 3.7% at $22.49, despite the retailer recording its first quarterly profit in three yearsOptimism was on the rise ahead of SHLD's earnings report, and the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.53 is at a 52-week low. In other words, SHLD's near-term option traders haven't been more call-heavy during the past year. On the charts, Sears Holdings Corp is roughly 25% lower year-to-date, and the stock is facing pressure from its descending 10-week moving average. 

  • VRX is drawing attention this morning, after the company said it will buy Sprout Pharmaceuticals -- the privately owned maker of the newly OK'd "female Viagra" -- for $1 billion in cash. VRX's CEO said the duo have been talking about a buyout for three weeks -- and it's a good thing the company struck, as Sprout's CEO said the company received a lot of looks after yesterday's FDA nod. The shares of Valeant Pharmaceuticals Intl Inc are lower with the broader equities market, down 2.9% at $237.83. The stock is up an impressive 66% in 2015, but option buyers have picked up puts over calls at a near-annual-high clip during the past two weeks, per the stock's 10-day put/call volume ratio of 4.52 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The reading ranks in the 97th percentile of its annual range.

  • Finally, DEPO's board unanimously rejected a third bid from Horizon Pharma PLC (NASDAQ:PLC), which "undervalues" the stock at $30 per share. DEPO and HZNP have gone round after round this year, and Depomed Inc shares are now sitting at $30.93, down 2.1% this morning. Amid the M&A chase, DEPO hasn't moved a whole lot since gapping higher in early July, with the stock stuck in the $30-$33 neighborhood.  

Get the skinny on all the biggest stories of the morning… Sign up now to get Schaeffer's Midday Market Check delivered straight to your inbox!


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners