Buzz Stocks: Monsanto Company, Fiat Chrysler Automobiles NV, and Ares Capital Corporation

Today's stocks to watch include Monsanto Company (MON0, Fiat Chrysler Automobiles NV (FCAU), and Ares Capital Corporation (ARCC)

May 23, 2016 at 10:39 AM
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U.S. stocks are up, even as Fed officials continue to hint at an upcoming rate hike. Among equities in focus today are agricultural products provider Monsanto Company (NYSE:MON), auto maker Fiat Chrysler Automobiles NV (NYSE:FCAU), and investment stock Ares Capital Corporation (NASDAQ:ARCC).

  • MON shares are up 5.5% at $107.10 -- their highest point since July -- after German-owned Bayer AG confirmed that it had offered to purchase the agrochemical company for $62 billion, or $122 per share. Bayer CEO Werner Baumann said that Bayer execs "fully expect a positive answer" regarding the offer, and dismissed media critics of the deal as "uneducated." Monsanto Company stock has been on the upswing amid the buyout speculation of late. Call buyers haven't been hotter on the stock in at least a year, with MON's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) of 5.5 sitting higher than all other readings from the past 12 months. In addition, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.2 is the lowest reading from the past year, indicating an exceptional appetite for calls from near-term traders. 

  • FCAU is down 4.6% at $6.72 – a nearly three-month low – amid reports of a potential sales ban in Germany, should the company continue to disregard emissions rules. Following the recent rash of emissions scandals by companies such as Mitsubishi Motors and Volkswagen, Germany has been cracking down on emissions testing, and German Transport Minister Alexander Dobrindt criticized Fiat Chrysler Automobiles NV's behavior as "uncooperative" and "incomprehensible." The auto maker's stock has been of interest to short sellers, as 8.4% of the stock's float is currently sold short -- an amount that would take over nine days of trading, at FCAU's average daily volume, to cover. Option buyers have grown bearish, too, with FCAU's 50-day ISE/CBOE/PHLX put/call volume ratio of 1.5 sitting in the 87th percent of its annual range.

  • ARCC is trading at $14.85, down 2.2%, after announcing that it had entered into an agreement to acquire American Capital Ltd. (NASDAQ:ACAS) for $3.43 billion. The shares of ARCC are still up over 15% during the past three months, and are testing a foothold atop their 200-day moving average. Near-term options buyers have shown an unusually large appetite for puts in recent weeks, with ARCC's SOIR of 7.1 in the 99th percentile of its annual range. On the other hand, analysts still seem upbeat on the stock, with 10 of 13 rating ARCC shares as "buy" or better, without a single "sell" rating in sight.


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