Buzz Stocks: Yahoo! Inc., VF Corp, and Valeant Pharmaceuticals Intl Inc

Today's stocks to watch include Yahoo! Inc. (YHOO), VF Corp (VFC), and Valeant Pharmaceuticals Intl Inc (VRX)

Feb 19, 2016 at 10:10 AM
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Sliding crude oil prices are weighing on U.S. stocks this morning, with traders also digesting the latest inflation data. Meanwhile, Internet stock Yahoo! Inc. (NASDAQ:YHOO), apparel producer VF Corp (NYSE:VFC), and drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX) are among the equities in focus today.

  • YHOO is 2.4% higher at $30.12, after the company said it created a committee to explore strategic alternatives, while continuing to consider a spin-off of its stake in Alibaba Group Holding Ltd (NYSE:BABA). Yahoo! Inc. popped earlier this week, after BABA reported holdings in Groupon Inc (NASDAQ:GRPN), breaking out above its 30-day moving average for the first time since December. The company has been talking restructuring for months, under pressure from Starboard Value. Option traders are hoping YHOO can keep the rally going -- at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 3.17 is higher than 83% of readings from the past year.
  • After reporting fourth-quarter earnings below expectations, VFC has dropped 6% to $57.60. The shares have been struggling to regain ground since hitting a two-year low of $52.21 in January, but analysts are still relatively optimistic, with 15 out of 20 rating VF Corp a "strong buy." Things are looking bearish in the options pits, however, where traders have bought to open nearly seven VFC puts for each call over the past 50 days on the ISE, CBOE, and PHLX -- a ratio in the 97th percentile of its annual range.
  • VRX is 6.3% lower at $88.15, thanks to a bearish note from Wells Fargo analyst David Maris, who began coverage on Valeant Pharmaceuticals Intl Inc with an "underperform" rating and a price target in the $65 to $68 range -- lower than the shares have seen in about three years. Maris cited concerns over the company's business model and accounting practices, saying VRX leaves too many "unanswered questions," and management has put Valeant "at significant business and reputational risk." In the options pits, near-term traders have been call-skewed in the extreme of late -- VRX's Schaeffer's put/call open interest ratio (SOIR) of 0.91 is lower than 98% of the past year's readings.
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