Och-Ziff Capital Management Group LLC (OZM) Sits Out the Rally

Och-Ziff Capital Management Group LLC (NYSE:OZM) officially agreed to a $412M settlement over foreign bribery charges, confirming rumors earlier this week

Sep 30, 2016 at 12:48 PM
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While other financial stocks are higher with Deutsche Bank AG (USA) (NYSE:DB), hedge fund firm Och-Ziff Capital Management Group LLC (NYSE:OZM) is bucking the trend, down 1.6% at $4.42. The company yesterday agreed to pay $412 million to settle a probe related to bribing African officials for mining rights and to influence government officials. CEO Daniel Och and CFO Joel Frank also agreed to pay an additional $2.2 million penalty to the Securities and Exchange Commission (SEC).
Earlier this week, the stock soared when reports of a plea deal surfaced, so it appears traders may be taking profits today

Prior to today, OZM's 14-day Relative Strength Index (RSI) of 77 was in "overbought" territory, and indicates today's breather may have been in the cards. Still, this week's bull gap helped the shares break out of previous congestion in the $4-$4.25 range, with OZM on pace to close north of its 40-week
moving average for the first time since July 2015. Nevertheless, the stock remains a long-term laggard, losing nearly half its value year-over-year.

In the option pits, Och-Ziff Capital Management Group LLC's (NYSE:OZM) gamma-weighted Schaeffer's put/call open interest ratio (SOIR) checks in at 0.29, indicating near-the-money calls outweigh puts by a more than 3-to-1 margin among options expiring in three months or less. OZM's out-of-the-money December 5 call is home to peak open interest, with over 8,200 contracts on the books. However, it's worth noting that OZM's short interest rose 9.3% over the last two reporting periods, so it's possible some skeptics have been buying out-of-the-money calls to hedge their shorted shares.

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