Buzz Stocks: Procter & Gamble Co, American International Group Inc, and Huntington Bancshares Incorporated

Today's stocks to watch include Procter & Gamble Co (PG), American International Group Inc (AIG), and Huntington Bancshares Incorporated (HBAN)

Jan 26, 2016 at 9:26 AM
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U.S. stocks are pointed higher ahead of the bell, once again moving in step with oil. Among the equities in focus are consumer packaged goods giant Procter & Gamble Co (NYSE:PG), insurance issue American International Group Inc (NYSE:AIG), and financial firm Huntington Bancshares Incorporated (NASDAQ:HBAN). 

  • PG is pointed 1.8% higher ahead of the bell, after the company reported better-than-expected earnings, while reaffirming its full-year core per-share profit and organic sales growth guidance. These expected gains are a break from the norm for Procter & Gamble Co, which is staring at an 14.7% year-over-year loss at $76.85. Over the past few months, option traders have been betting bullishly on the shares. PG's 50-day call/put volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.44 -- in the 91st percentile of its annual range. If the stock resumes its longer-term downtrend, a capitulation among these call buyers could result in headwinds.
  • AIG announced it will spin off its mortgage insurance unit and cut 300 jobs as part of a sweeping plan to make it a "leaner, more profitable and focused" business -- and fend off Carl Icahn's efforts to split the company in three. The news is being well-received, based on the stock's 2.4% pre-market advance. Shareholders would welcome a higher start this morning, considering American International Group Inc has surrendered 10.7% so far in 2016, settling Monday at $55.36. On the other hand, put buyers are counting on extended losses. AIG's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.87 ranks near the top quartile of its 12-month range, suggesting a stronger-than-usual preference for bearish wagers over bullish of late.
  • HBAN will buy Firstmerit Corp (NASDAQ:FMER) for $3.4 billion in cash and stock, which would create the largest Ohio-based bank by deposits. The reaction hasn't been great on Wall Street, with  the shares down 7.4% ahead of the bell -- and on track to open at a new two-year low. Furthermore, Deutsche Bank cut its price target on Huntington Bancshares Incorporated to $10.50 from $11.50. Last night, the stock settled at $8.80, down 26% from its most recent peak of $11.87 in early December. Amid this sharp downtrend, short-term speculators have been gravitating toward puts over calls. Specifically, HBAN's Schaeffer's put/call open interest ratio (SOIR) of 0.84 sits just 1 percentage point shy of a 52-week peak.
 

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