2 Energy Stocks Shaking Off Activist Snubs

Noble Energy, Inc. (NBL) and Western Refining, Inc. (WNR) are higher, despite Soros exiting its stakes in the company

by Kirra Fedyszyn

Published on Feb 17, 2016 at 2:35 PM
Updated on Jun 24, 2020 at 10:16 AM

Activist investors can make some serious waves when Securities and Exchange Commission (SEC) filings are disclosed. Today, it's all about energy, with a slew of activists and hedge funds making moves in the fourth quarter. Among the stocks on the activist radar are Noble Energy, Inc. (NYSE:NBL) and Western Refining, Inc. (NYSE:WNR), both abandoned by billionaire George Soros.

NBL is 8.2% higher at $31.00 today, shaking off the Soros news in light of a solid fourth-quarter earnings report and big oil rebound. "Our ability to monetize additional assets gives us flexibility to adjust in a volatile price environment," said CEO David Stover.

Soros might not be kicking himself just yet. NBL is still down 6.2% in the first quarter, though the equity has made headway since falling to a more than a six-year low of $23.77 in mid-January. 

Recent option traders may be getting nervous, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NBL has a 10-day put/call volume ratio of 6.74 -- higher than 97% of all readings taken in the past year.

In fact, put open interest is at an annual high, and puts are crossing the tape at 13 times their typical intraday pace. However, it appears many of these options are being sold to close.

WNR is also enjoying the broader energy tailwinds, up 1.1% at $26.52. However, the stock still sits on a 25.5% year-to-date loss, after hitting a two-year low of $25.01 less than a week ago.

The company will report quarterly earnings next week, but analysts don't appear particularly optimistic heading into the report -- six out of eight brokerage firms following the stock rate it only a "hold." Short interest on the stock is elevated, as well, accounting for nearly 15% of WNR's available float -- unsurprising, as the security has underperformed the S&P 500 Index (SPX) by 33 percentage points over the last three months.

At the ISE, CBOE, and PHLX, the security's 50-day call/put volume ratio of 5.60 shows nearly six WNR calls have been bought to open for each put during the past 10 weeks. Moreover, the ratio sits in the 89th percentile of its annual range. However, some of this call buying -- particularly at out-of-the-money strikes -- could be attributable to shorts seeking a hedge.

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