Buzz Stocks: Valeant Pharmaceuticals Intl Inc, Yahoo! Inc., and L Brands Inc

Today's stocks to watch in the news include Valeant Pharmaceuticals Intl Inc (VRX), Yahoo! Inc. (YHOO), and L Brands Inc (LB)

by Alex Eppstein

Published on Apr 7, 2016 at 9:45 AM

Stocks are lower this morning, despite a sharper-than-forecast drop in jobless claims. Meanwhile, among specific equities in focus are drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Internet pioneer Yahoo! Inc. (NASDAQ:YHOO), and Victoria's Secret parent L Brands Inc (NYSE:LB).

  • VRX received approval from its creditors to amend the terms of its debt and postpone its regulatory filing deadlines. As such, the stock is looking at another day of huge gains, up 11.3% out of the gate to flirt with $38.00. Year-to-date, however, Valeant Pharmaceuticals Intl Inc remains at a more than 62% deficit. This should be a boon to the bullish hopes of options traders. During the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 1.78 VRX calls for every put -- a ratio that ranks in the top quartile of its annual range. However, skepticism remains on Wall Street, based on the negativity witnessed among analysts.

  • YHOO is expecting a 20% year-over-year drop in earnings and a nearly 15% fall in revenue, according to a Re/code report based on the company's financial documents. This development has the shares down 1.4% in early trading at $36.16, and set to close south of its 10-day moving average for the first time since March 15. In recent weeks, though, Yahoo! Inc. has been rallying amid rampant M&A rumblings. On the sentiment front, analysts remain firmly planted in YHOO's bullish corner, while options traders are nearing a call-skewed extreme. The stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.34, lower than 96% of all other readings from the past year.

  • LB reported same-store sales rose 3% in March, and also announced plans to restructure Victoria's Secret into three business units. At last check, the stock was down 0.6% at $85.55, and more than 8.5% lower in 2016. Moreover, L Brands Inc's rally attempts over the past few weeks have been contained by the 50-week moving average. Elsewhere, options traders have been placing bearish bets over bullish at an accelerated clip. LB's 10-day ISE/CBOE/PHLX put/call volume ratio of 11.04 ranks in the high 89th percentile of its annual range.
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