Stocks On the Move: Walgreens Boots Alliance Inc, TransDigm Group Incorporated, and Merck & Co., Inc.

WBA, TDG, and MRK are among the stocks on the move today

Jan 20, 2017 at 3:50 PM
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U.S. stocks are higher, following President Donald Trump's inauguration. Among specific equities in focus today are pharmacy chain Walgreens Boots Alliance Inc (NASDAQ:WBA), aircraft component maker TransDigm Group Incorporated (NYSE:TDG), and biotech stock Merck & Co., Inc. (NYSE:MRK). Here's a quick look at what's moving WBA, TDG, and MRK.

  • WBA is down 2.9% at $81.08, following reports that the U.S. Federal Trade Commission (FTC) is still unsatisfied with WBA's attempts to gain antitrust clearance for its Rite Aid Corporation (NYSE:RAD) purchase by selling 865 stores to Fred's, Inc. (NASDAQ:FRED), and likely won't finish its review of the proposed $9.4 billion merger by the Jan. 27 deadline. Both RAD and FRED were earlier halted for volatility, and were last seen significantly lower. WBA is down 7.8% from its mid-December annual high, and is on pace to close below its 50-week moving average for the first time since early November. In the option pits, near-term traders have been unusually put-skewed, with Walgreens Boots Alliance Inc's Schaeffer's put/call open interest ratio (SOIR) of 0.85 sitting higher than 88% of all other readings from the past year.
  • TDG is trading 10.8% lower at $224.57, after scathing remarks from Citron Research's Andrew Left, saying TDG could be the Valeant Pharmaceuticals Intl Inc (NYSE:VRX) of the aerospace industry, thanks to its "egregious" price hikes and predatory business model. Left also said TransDigm Group Incorporated shares should be worth closer to $166. The stock is the second-worst performer on the New York Stock Exchange today, and is now trading below its 320-day moving average for the first time since April. While TDG has landed on the short-sale restricted list, short sellers are likely cheering today's price action, with TDG's short interest up 17% in the last two reporting periods. Shorted shares now account for more than 8.2% of TDG's float, which would take over 11 days to cover, at TDG's average daily volume.
  • MRK is up 4% at $62.76, on news Bristol-Myers Squibb Co (NYSE:BMY) will not be pursuing accelerated approval for its lung cancer drug combination treatment, boosting MRK's position in the field of lung cancer therapies. The stock is the biggest gainer on the Dow so far today, and is up more than 23% year-over-year, recently bouncing off its 200-day moving average. In the option pits, near-term option traders have been extremely put-biased, with Merck & Co., Inc.'s SOIR of 1.86 sitting just 10 percentage points from an annual peak. MRK could benefit further on the charts as these seemingly bearish positions unwind. 
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