Schaeffer's 43rd Anniversary Stock Picks in 2024

Buzz Stocks: bluebird bio Inc, Sears Holdings Corp, and Foamix Pharmaceuticals Ltd

Today's stocks to watch include bluebird bio Inc (BLUE), Sears Holdings Corp (SHLD), and Foamix Pharmaceuticals Ltd (FOMX)

Dec 3, 2015 at 9:39 AM

U.S. indexes are attempting to shake off yesterday's losses, as traders eye European Central Bank (ECB) President Mario Draghi's latest easing measures, and await more comments from Fed Chair Janet Yellen. Among the equities in focus are biotech interest bluebird bio Inc (NASDAQ:BLUE), retail concern Sears Holdings Corp (NASDAQ:SHLD), and drugmaker Foamix Pharmaceuticals Ltd (NASDAQ:FOMX).

BLUE is up 1.6% at $82.23, as the company announced it has entered into an agreement with ViroMed Co., Ltd. to research, develop, and sell a new cancer treatment. Over the last six months, bluebird bio Inc has been floundering, losing well over half its value since its annual high in May. Traders and analysts appear optimistic, though. Of the 11 firms following BLUE, all maintain "buy" or better ratings. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 2.48 -- in the 79th percentile for the past year -- indicates more than two calls have been bought for each put over the last 50 days of trading.

SHLD is fractionally lower at $20.40. The retailer announced quarterly earnings that were better than expected, but overall sales are still slumping for Sears Holdings Corp, as demand for apparel and electronics declines. The shares have lost nearly one-third of their value so far this year, and the single analyst covering the stock gives it a "strong sell" rating. Traders are equally bearish; 11.8% of SHLD's total available float is sold short -- accounting for more than 27 days of trading at the stock's typical pace.

FOMX is up 8.4% at $8.64, bringing its year-to-date lead to more than 14%, on the news that its treatment for acneiform rash associated with some cancers had positive results in its Phase II clinical trial. Analysts may be unsurprised by this rally by Foamix Pharmaceuticals Ltd -- which was trending sideways until November -- as all five brokerages covering FOMX give it a "strong buy." Today's news will likely have short sellers sweating, though, as 7.2% of the stock's float is sold short -- more than 10 times FOMX's average daily trading volume. If bears abandon their positions, a short-covering rally could send the shares even higher.

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