Buzz Stocks: Ciena Corporation, Wal-Mart Stores, Inc., and Yum! Brands, Inc.

Today's stocks to watch include Ciena Corporation (CIEN), Wal-Mart Stores, Inc .(WMT), and Yum! Brands, Inc. (YUM)

by Kirra Fedyszyn

Published on Dec 10, 2015 at 9:39 AM
Updated on Jun 24, 2020 at 10:16 AM

A larger-than-expected rise in weekly jobless claims and a fifth consecutive monthly decline in import prices have U.S. stocks lower this morning, potentially headed for a fourth straight day in the red. Among the equities in focus are networking concern Ciena Corporation (NYSE:CIEN), retail giant Wal-Mart Stores, Inc. (NYSE:WMT), and restaurant interest Yum! Brands, Inc. (NYSE:YUM). 

  • CIEN is down 15.7% at $20.31, after offering lackluster revenue guidance. Ciena Corporation has been plagued with bearish sentiment lately -- the stock's 50-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 0.66 is higher than 92% of readings from the last 12 months. Prior to today's expected pullback, CIEN was on fire, climbing more than 24% in 2015, and earning 13 "buy" ratings, compared to four "holds." A shift in sentiment in light of today's strong fourth-quarter numbers could set the shares up for a future rally. 
  • WMT is up 0.4% at $59.32, after the company began rolling out a new mobile payment platform as part of its existing mobile app. Wal-Mart Stores, Inc. hopes the three-step payment process will make shopping in its store more convenient for customers, especially during the busy holiday season. If the app proves successful, it could make a world of difference for the retailer, which saw disappointing returns from this year's Black Friday sales and has been a historic loser in the month of December. The stock -- which hit a three-year low of $56.30 less than a month ago -- hasn't been getting much love from analysts, either. Out of 19 brokerages covering WMT, 16 give it a lukewarm "hold." But near-term options traders have been favoring calls at an extreme rate recently, bringing Wal-Mart's Schaeffer's put/call open interest ratio (SOIR) to 0.46 -- 2 percentage points from an annual low.
  • YUM is down 1.6% at $72.62, as the company reported that same-store sales in its China locations fell by 3% in November. Yum! Brands, Inc. also said it would return as much as $6.2 billion to shareholders before separating its China business by the end of 2016. YUM has picked up steam since hitting an annual low of $66.35 in October, but is now struggling to stay positive year-to-date. YUM's 10-day ISE/CBOE/PHLX call/put volume ratio sits at 2.11 -- in the 73rd percentile of its annual range, pointing to a healthier-than-usual appetite for long calls during the past two weeks. What's more, YUM has a Schaeffer's Volatility Index (SVI) of 53% -- in the top percentile of its 12-month range -- indicating that near-term traders are paying relatively inflated premiums, from a historical standpoint.

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