Buzz Stocks: McDonald's Corporation, Valeant Pharmaceuticals Intl Inc, and Sears Holdings Corp

Today's stocks to watch include McDonald's Corporation (MCD), Valeant Pharmaceuticals Intl Inc (VRX), and Sears Holdings Corp (SHLD)

by Kirra Fedyszyn

Published on Apr 22, 2016 at 10:05 AM
Updated on Apr 22, 2016 at 10:05 AM

U.S. stocks are mixed this morning, after the latest round of blue-chip earnings. While fast-food chain McDonald's Corporation (NYSE:MCD) seems to be bucking the negative earnings trend, biotech Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and retailer Sears Holdings Corp (NASDAQ:SHLD) are also among today's equities in focus.

  • Dow stock MCD is 0.7% higher at $126.70 -- eyeing yet another all-time high -- after first-quarter earnings exceeded expectations, thanks in large part to the success of all-day breakfast. McDonald's Corporation hit a record peak of $129.80 earlier this week, but could soar even higher with an unwinding of bearish sentiment. More than 60% of analysts still recommend holding or selling the stock. This morning, in fact, Nomura boosted its price target on the shares to $142 from $138. And in the options pits, traders have been more skeptical than usual. A capitulation from option bears could create fresh tailwinds for MCD stock.
  • SHLD has popped 2.5% to $18.46 on reports that it will shutter 78 stores -- about 5% of its total store base -- between late July and mid-September this year. According to CEO Eddie Lampert, this is a result of "aggressive actions" the firm must take to "restore Sears Holdings to profitability." The stock is off 10% year-to-date, hitting a 12-year low of $14.05 just weeks ago, and has been more recently been running into resistance at its 120-day moving average. Option traders, meanwhile, have shown a distinct preference for long calls over puts of late. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Sears Holdings Corp has a 10-day call/put volume ratio of 4.59 -- higher than 83% of all readings in the last 12 months.
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