Buzz Stocks: Kinder Morgan Inc, Valeant Pharmaceuticals Intl Inc, and InterOil Corporation (USA)

Today's stocks to watch include Kinder Morgan Inc (KMI), Valeant Pharmaceuticals Intl Inc (VRX), and InterOil Corporation (USA) (IOC)

May 20, 2016 at 10:37 AM
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U.S. stocks are trading higher today, as traders try to shake off recent rate-hike fears. Among equities in focus today are energy provider Kinder Morgan Inc (NYSE:KMI), biotech Valeant Pharmaceuticals Intl Inc (NYSE:VRX), and oil-and-gas stock InterOil Corporation (USA) (NYSE:IOC).

  • KMI is up 0.9% at $17.42, after Canada's National Energy Board approved plans to expand Kinder Morgan Inc's Trans Mountain oil pipeline, assuming the more than 150 conditions to do so are met. KMI said it was "pleased" with the outcome, although environmentalists and indigenous rights groups mourned the decision. The energy stock hit an all-time low in January, but has muscled its way to a year-to-date gain of roughly 17.3%. Options traders have been especially bearish on the stock lately, with KMI's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) of 1.63 sitting in the 90th percentile of its annual range. The stock has tended to exceed options traders' volatility expectations over the past 12 months, with a Schaeffer's Volatility Scorecard (SVS) of 97.

  • The VRX saga continues, with the stock up 2.8% at $27.00, even after receiving a notice of default from bondholders due to its delayed earnings report. The company has endured its share of controversy, including facing a congressional hearing for alleged price gouging, and top-tier leadership shakeups. The pharmaceutical stock has lost nearly three-quarters of its value so far this year, hitting a five year low earlier this month. Options bulls have stayed hot on the stock, though, with Valeant Pharmaceuticals Intl Inc's 50-day ISE/CBOE/PHLX call/put volume ratio of 1.76 sitting in the 90th percentile of its annual range. VRX's Schaeffer's put/call open interest ratio (SOIR) of 0.9 is lower than 98% of all other readings from the past year, suggesting a strong near-term call bias.

  • IOC shares are soaring, up 31.1% at $41.50 -- a new year-to-date high -- after Australia-owned Oil Search Limited announced it would buy InterOil Corporation for $2.2 billion, or roughly $40.25 per share. Recent options buyers might be jumping for joy, as IOC's 50-day ISE/CBOE/PHLX call/put volume ratio is in the 97th percentile of its annual range, at an impressive 36.8.



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