Buzz Stocks: Starbucks Corporation, Smith & Wesson Holding Corp, and Johnson & Johnson

Today's stocks to watch in the news include Starbucks Corporation (NASDAQ:SBUX), Smith & Wesson Holding Corp (NASDAQ:SWHC), and Johnson & Johnson (NYSE:JNJ)

Josh Selway
Dec 2, 2016 at 9:25 AM
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U.S. stock futures are hovering near breakeven following a mixed November jobs report. Among specific equities in focus today are coffee stock Starbucks Corporation (NASDAQ:SBUX), gun maker Smith & Wesson Holding Corp (NASDAQ:SWHC), and Dow stock Johnson & Johnson (NYSE:JNJ). Here's a quick look at what's driving SBUX, SWHC, and JNJ.

  • SBUX is set to lose 2.8% at the open, following news the company's longtime CEO Howard Schultz will be stepping down next April and replaced by President Kevin Johnson. Schultz, who will stay on as chairman at Starbucks Corporation, told CNBC he thinks "the stock is undervalued." On the charts, SBUX has rebounded sharply since falling below $51 last month, closing Thursday at $58.51, but remains below the $59 level -- which it hasn't been able to conquer since its April bear gap. Options traders have remained optimistic, though, as call buying has more than doubled put buying during the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). 
  • Although the company's fiscal second-quarter earnings results topped expectations, SWHC is pointed 8.3% lower ahead of the bell on a disappointing current-quarter profit outlook. Price-target cuts at Cowen (to $29) and Craig-Hallum (to $22) are also weighing on the shares pre-market. Closing Thursday at $23.98, Smith & Wesson Holding Corp has been trending lower since its all-time peak of $31.19 back in August, with a post-election bear gap sending the stock below its 200-day moving average. This sell-off has enticed short sellers. During the last reporting period, short interest on SWHC jumped by 26.3%, and now 11.6 million shares are sold short -- the most in nearly two years. 
  • JNJ is edging lower in pre-market trading, after the company was ordered to pay $1 billion to plaintiffs who said they were harmed by its hip implants -- a decision the company said it would immediately appeal. Looking back, it's been a solid year for Johnson & Johnson stock, gaining 8.4% year-to-date to trade at $111.38. Despite this, short-term options traders are decidedly put-skewed. This is based on JNJ's Schaeffer's put/call open interest ratio (SOIR) of 1.83, which is just 9 percentage points from a 12-month high. If the shares can push higher yet again, an unwinding of these seemingly bearish positions could provide an extra lift. 

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