Stocks On the Move: Mallinckrodt PLC, Sprint Corp, and Straight Path Communications Inc

MNK, S, and STRP are among the stocks on the move today

Jan 19, 2017 at 12:14 PM
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U.S. stocks are modestly lower, with Donald Trump's upcoming presidential inauguration casting a long shadow over Wall Street. Among specific equities in focus today are drugmaker Mallinckrodt PLC (NYSE:MNK), as well as telecom stocks Sprint Corp (NYSE:S) and Straight Path Communications Inc (NYSEMKT:STRP). Here's a quick look at what's moving MNK, S, and STRP.

  • MNK has jumped 7.1% to trade at $49.84, after the drugmaker yesterday agreed to a $100 million antitrust settlement. Bolstering the stock, Guggenheim Securities said it doesn't see any near-term or midterm threat to Mallinckrodt PLC's flagship drug, Acthar, while Wells Fargo added, "We like Mallinckrodt's valuation but like many investors, we wish Acthar did not have the capacity to attract so much drama." Today's jump aside, the stock has been getting pummeled on the charts, since topping out in late August near $86. Options traders have been scooping up downside bets at a rapid-fire rate, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MNK's 10-day put/call volume ratio rests at a top-heavy 5.76 -- outstripping 81% of comparable readings from the last year.
  • S has surged 2.5% to trade at $8.95, and earlier hit a two-year high of $9.10. The shares are capitalizing on a price-target hike to $7 from $5.40 at HSBC. However, in general, the brokerage bunch has been pretty skeptical toward Sprint Corp. Of the 19 analysts tracking the stock, 17 have doled out a "hold" or worse recommendation. Not to mention, the consensus 12-month price target of $6.74 is well below the current perch of S shares.
  • STRP has fallen 9.1% at $37, and landed on the short-sale restricted (SSR) list, burned by a report by Kerrisdale Capital. The institutional short seller said optimism over last week's Federal Communications Commission (FCC) settlement is "badly misplaced," and waxed pessimistic about a potential spectrum sale. With today's drop, Straight Path Communications Inc is sitting at the 61.8% Fibonacci retracement of its low and high from the past year. While the stock is currently on the SSR list, plenty of bears have already carved out positions. Specifically, a brow-raising 47.4% of STRP's float is dedicated to short interest, which would take nearly three weeks to cover, at the stock's typical trading levels.
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