Buzz Stocks: MGM Resorts International, Allergan PLC, and Sanofi SA (ADR)

Today's stocks to watch include MGM Resorts International (MGM), Allergan PLC (AGN), Sanofi SA (ADR) (SNY)

by Mark Fightmaster

Published on Oct 29, 2015 at 9:48 AM
Updated on Oct 29, 2015 at 9:49 AM

U.S. stocks are lower after this morning's GDP miss. Among the equities in focus are casino operator MGM Resorts International (NYSE:MGM), as well as pharmaceutical concerns Allergan PLC (NYSE:AGN) and Sanofi SA (ADR) (NYSE:SNY).

  • MGM is up 5.7% at $22.98, thanks to news that it is going to spin off 10 resorts into a publicly traded real estate investment trust (REIT).  MGM Resorts International is also benefiting from a solid third-quarter earnings report. The shares are now trying to topple the $23 level, which has acted as resistance for more than a year. Recent option buyers are likely applauding today's news, as MGM's 10-day call/put volume ratio of 15.01 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 91% of the readings taken in the past 52 weeks. More bullish sentiment comes from analysts, where 10 of the 12 brokerages covering the equity rate it a "strong buy."
  • Turning to the pharmaceutical world, AGN has been halted, as the company reacts to The Wall Street Journal reports of early merger talks with Pfizer Inc. (NYSE:PFE) (subscription required). Allergan PLC said it can confirm "preliminary friendly discussions regarding a potential business combination transaction" with PFE, but it remains "strongly committed" to divesting its global generics business to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). Ahead of the bell, AGN was pointed significantly higher, and is set to jump well above the $300 level for the first time in more than a month. Sentiment on the pharmaceutical concern is already bullish, as 15 of the 16 analysts tracking AGN rate it a "buy" or better. This sentiment is mirrored in the option pits, where the firm's 50-day ISE/CBOE/PHLX call/put volume ratio comes in at 2.55, ranking in the 98th percentile of its annual range.
  • SNY is down 5.7% ta $48.56, after the company lowered its three-year sales forecast for diabetes treatments. Sanofi SA believes that its sales of Lantus insulin will fall between 4% and 8% through 2018. Technically, the stock has fallen 11.7% since mid-August's high of $54.98, and is now set to end beneath its 10-day and 20-day moving averages for the first time since Oct. 1. Pessimism has been ramping up among option buyers, as SNY's 50-day put/call volume ratio on the ISE/CBOE/PHLX is at a 52-week high of 0.50. 

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