Short Sellers Scramble as Del Frisco's Restaurant Group Inc (DFRG) Rallies

Short interest on Del Frisco's Restaurant Group Inc (NASDAQ:DFRG) plummeted ahead of today's news

by Josh Selway

Published on Dec 28, 2015 at 3:09 PM

Del Frisco's Restaurant Group Inc (NASDAQ:DFRG) has jumped 6.4% to $15.68 today, on news Fidelity National Financial has taken an 8.1% stake in the company. Still, the stock remains roughly 34% lower in 2015, as it struggles to recover from its late-July bear gap. In fact, the shares topped out near $16 earlier, an area that has effectively contained all of their post-gap highs. 

Some short sellers appear to have gotten out of the way just in the nick of time. For instance, short interest fell by 10.6% during the most recent reporting period. However, DFRG's short-interest ratio still stands at 6.30 -- meaning it would take more than a week to cover all of the remaining bearish bets, at the stock's average daily volume. 

Option traders, though, have taken a seemingly more bullish stance. DFRG's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.20. This indicates call open interest outweighs put open interest by a factor of 5-to-1 among options that expire within the next three months. 

Analysts have tended to side with option traders. Specifically, four of the six brokerage firms that cover Del Frisco's Restaurant Group Inc (NASDAQ:DFRG) say it's a "buy" or better, with not a single "sell" recommendation to be found. 

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