Buzz Stocks: Deere & Company, The GEO Group Inc, and Square Inc

Today's stocks to watch in the news include Deere & Company (DE), The GEO Group Inc (GEO), and Square Inc (SQ)

Aug 19, 2016 at 9:44 AM
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U.S. stocks are down early, as crude oil's recent rally takes a breather. Among equities in focus today are farm equipment firm Deere & Company (NYSE:DE), real estate investment trust (REIT) The GEO Group Inc (NYSE:GEO), and payment processing concern Square Inc (NYSE:SQ)

  • DE reported better-than-expected earnings and raised its full-year outlook. As a result, the stock is 4.2% higher at $80.20. Longer term, however, Deere & Company shares have been stair-stepping their way lower since their early June highs, and are down 11.5% year-over-year. Options traders have been buying to open calls over puts at a rapid rate during the past 50 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). DE's call/put volume ratio across that time period is 1.09 -- just 6 percentage points from an annual high. If the stock resumes its longer-term trajectory to the downside, a capitulation among these bulls could result in headwinds.
  • While GEO was dealt a serious setback yesterday with the Justice Department's decision to phase out private for-profit prisons, the stock is bouncing back. A day after plummeting to a seven-year low of $16.26, the shares are up 10.8% at $21.62 on the Federal Bureau of Prisons' contract renewal for the D. Raymond James correctional facility. Separately, a number of analysts weighed in on Thursday's Justice Department development, with Compass Point writing that the policy shift is "undeniably negative" for The GEO Group Inc, but is "far from a death sentence." Option bulls certainly hope this is true. During the last 10 days at the ISE, CBOE, and PHLX, traders have bought to open 2.77 GEO calls for every put.
  • SQ has jumped 2.1% out of the gate to trade at $12, after a Securities and Exchange Commission (SEC) filing revealed that Point72 Asset Management's Steven Cohen has accumulated a 5.4% passive stake in the company. Also fanning the bullish flames, several Square Inc job postings suggest the firm is planning further expansion in Europe, while JPMorgan Securities raised its price target on the stock to $15 from $14. On the charts, the shares have been trekking higher since testing the $8.50 level in late June, helped by a standout earnings report earlier this month. Plus, there's plenty of potential buying power sitting on the sideline, with one-tenth of SQ's float sold short -- or 6.4 times the stock's usual trading volume.

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