Buzz Stocks: Eli Lilly and Co, Myriad Genetics, Inc., and Perrigo Company plc

Today's stocks to watch in the news include Eli Lilly and Co (LLY), Myriad Genetics, Inc. (MYGN), and Perrigo Company plc Ordinary Shares (PRGO)

Aug 10, 2016 at 9:19 AM
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U.S. stocks are eyeing a modestly higher open, as traders digest another round of earnings reports. Among equities in focus today are healthcare stocks Eli Lilly and Co (NYSE:LLY), Myriad Genetics, Inc. (NASDAQ:MYGN), and Perrigo Company plc Ordinary Shares (NYSE:PRGO)

  • LLY is down 1.8% ahead of the bell, after an independent panel recommended the drugmaker continue its late-stage study on breast cancer drug abemaciclib, after the treatment failed to meet its goals. While this would be a step in the wrong direction, Eli Lilly and Co has made a lot of progress since bottoming below $68 in mid-March, closing last night at $81.50. Yet, options traders have been placing bearish bets over bullish at an extreme rate recently. LLY's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) checks in at 4.08 -- in the 100th annual percentile.
  • MYGN reported worse-than-expected earnings and revenue, and offered up a dismal full-year outlook. This prompted Wells Fargo, Barclays, and Piper Jaffray to reduce their ratings to the equivalent of a "hold," while the latter pair joined several other analysts in cutting their price targets on Myriad Genetics, Inc. Collectively, these developments have sent the stock 28% lower in electronic trading, meaning the shares will likely open at a two-year low after settling Tuesday at $29.46. Option bears are in luck. During the past 10 days at the ISE, CBOE, and PHLX, traders have bought to open 6.05 MYGN puts for every call, with the corresponding put/call volume ratio outstripping 93% of others recorded in the past year.
  • PRGO missed the Street's estimates in the earnings confessional, and lowered its forecast, too. As a result, the stock has tanked 12% in pre-market trading, after yesterday's settlement at $95.09. If these losses materialize, Perrigo Company shares could flirt with a nearly five-year low. This is bad news for bullish bettors at the ISE, CBOE, and PHLX -- of which there have been plenty. During the last 10 weeks across those exchanges, traders have bought to open 2.40 PRGO calls for each put, and the resultant call/put volume ratio rests just 4 percentage points from a 12-month peak.

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