Booz Allen Stock Hammered by Justice Probe; Amazon Snaps Up Whole Foods

Booz Allen Hamilton is in legal trouble, while Finisar shakes off a revenue miss

Managing Editor
Jun 16, 2017 at 10:19 AM
facebook twitter linkedin


U.S. stocks are modestly lower this morning, as options expiration nears. Among specific names on the move today are government contractor Booz Allen Hamilton Holding Corporation (NYSE:BAH), optical solutions specialist Finisar Corporation (NASDAQ:FNSR), and organic grocer Whole Foods Market, Inc. (NASDAQ:WFM). Here's a quick look at what's moving shares of BAH, FNSR, and WFM.

DOJ Investigation Leaves Booz Allen Hamilton Stock Reeling

Booz Allen Hamilton stock is reeling today, down 20% to trade at $31.82, after a regulatory filing revealed the Department of Justice is investigating the consulting firm over questionable accounting and billing practices. Following today's massive bear gap, BAH stock is now down nearly 12% year-to-date, despite hitting an all-time high of $39.67 as recently as Wednesday.

Already this morning, bullish brokerage firms are starting to reconsider their stance on Booz Allen. Ahead of the DOJ probe revelation, 80% of analysts called the stock a "buy" or better, but Vertical Research and Raymond James have since downgraded BAH to "hold" and "market perform," respectively.

Finisar Stock Up After Reporting Earnings

Finisar stock is up 10% to trade at $28.29 today, erasing last night's post-close losses, despite a dismal earnings report. FNSR's adjusted profit arrived in line with expectations, but quarterly revenue fell short -- as did the firm's 2018 guidance.

It's been a volatile year for FNSR stock, which has ranged from a mid-February high of $36.41 to a year-to-date low of $21.53 on April 20. Today's bull gap propelled the stock above its 80-day moving average, which rejected a rally attempt earlier this month -- but FNSR is now challenging its overhead 200-day moving average, which served as support during the second half of March.

Meanwhile, analysts remain optimistic. All 10 brokerages covering FNSR  stock rate it a "strong buy."

Amazon Deal Sends Whole Foods Stock Soaring

WFM stock got an unexpected boost today, after Amazon bought Whole Foods for $13.7 billion in cash, including the assumption of debt. The deal values WFM stock, which closed at $33.06 yesterday, at $42 per share. Trading was briefly halted in WFM earlier this morning, but the stock has currently rallied right up to the bid price, up 27% at $41.99 -- suggesting traders are confident in the AMZN deal.

Today's buyout bid likely caught Whole Foods bears off-guard. Despite a 14% decline during the past two reporting periods, short interest still accounts for nearly 10% of the equity's available float (or 7.4 times WFM's average daily trading volume).

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners