Buzz Stocks: Best Buy Co Inc, UnitedHealth Group Inc, and KaloBios Pharmaceuticals Inc

Today's stocks to watch include Best Buy Co Inc (BBY), UnitedHealth Group Inc (UNH), and KaloBios Pharmaceuticals Inc (KBIO)

Nov 19, 2015 at 9:56 AM
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It could be a fourth straight win for blue chips, as investors digest minutes from the latest Fed meeting, jobless claims rose in line with expectations, and the Philadelphia Fed index turned positive. Among the equities in focus are electronics retailer Best Buy Co Inc (NYSE:BBY), healthcare interest UnitedHealth Group Inc (NYSE:UNH), and biotech concern KaloBios Pharmaceuticals Inc (NASDAQ:KBIO).

  • BBY is down 6.5% this morning, last seen trading at $29.29, after reporting disappointing quarterly sales and issuing a cautious outlook. Best Buy Co Inc seems to be just the latest in a series of retail losers heading into the holiday shopping season, likely to the delight of recent option buyers. BBY's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 1.82 -- higher than 78% of readings taken in the past year -- indicating that options traders have bought puts over calls at a faster-than-usual pace. And according to near-term at-the-money straddle data, traders were pricing in a post-earnings move of 10.6% for Best Buy -- much higher than the stock's average one-day swing of 5.7% over the last eight quarters. 
  • It's also been a rough start for UNH today, as the company cut its full-year profit forecast, citing weak growth and continued pressure on its Obamacare individual plans. The healthcare concern reported better-than-expected quarterly earnings last month, but the news did little to help the shares. UnitedHealth Group Inc has added 10.7% so far this year, but is down 4.4% today, last seen at $112.06. With 17 out of 18 brokerages following the firm giving it a "buy" rating or better, there is plenty of room for downgrades on UNH. Options traders are already extremely bearish, with the stock's 10-day and 50-day put/call volume ratios on the ISE/CBOE/PHLX both near the top of their annual ranges. 
  • KBIO is exploding this morning, last seen trading at $13.40, an increase of 547.3% over Wednesday's close. The much-needed boost -- KaloBios Pharmaceuticals was down 85% year-to-date heading into today -- came from news that Turing Pharmaceuticals Inc's Chief Executive Martin Shkreli purchased 1.2 million shares of KBIO, making him KBIO's largest shareholder.This development comes just a week after KaloBios announced that it was winding down operations and liquidating assets. A short-covering rally could potentially add fuel to the fire for KBIO, as nearly 9% of the stock's total available float is sold short, accounting for almost eight days' of trading, at the equity's typical daily pace. 

 

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