SEAS, SGEN, DAL Stocks On the Move Today

Trump's travel ban news took the wind out of airlines stocks

Managing Editor
Jun 26, 2017 at 1:54 PM
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Stocks are trading mixed today, as bank stocks edge higher will tech stocks retreat. Theme park stock SeaWorld Entertainment Inc (NYSE:SEAS) is one name swimming in red ink, while biotech issue Seattle Genetics, Inc. (NASDAQ:SGEN) and travel stock Delta Air Lines, Inc. (NYSE:DAL) are also making headlines. Here's a quick look at what's moving shares of SEAS, SGEN, and DAL.

Subpoenas Sink SeaWorld Stock

SeaWorld stock is down 5% to trade at $14.84, and earlier touched its lowest point in 2017, after the company received subpoenas from the Justice Department and Securities and Exchange Commission (SEC) for its corporate response to the "Blackfish" documentary. The documentary, released in January 2013, was critical of the theme park's treatment of orcas, and followed the death of a SeaWorld trainer, triggering SEAS stock to take an extended tumble over the next couple of years. Currently, SEAS stock is down 22% year-to-date, but well off its record lows of $11.77 in September.

This is no surprise for short sellers. Short interest in SEAS stock has increased by nearly 15% over the last two reporting periods, and currently over 25% of the stock's total available float is sold short. At SeaWorld stock's average daily trading volume, it would take about three weeks to buy back these bearish bets.

Lymphoma Drug Results Sends Seattle Genetics Stock Spiraling

Seattle Genetics stock is down 7% to trade at $55.83, one of the worst performers on Nasdaq today, after the biotech's Takeda lymphoma drug met its main goals, but did not display sufficient progression to win over investors. Today's slide puts SGEN stock below its 200-day moving average, a trendline that hasn't been breached on a daily closing basis since the post-Brexit lows of June 2016. Year-over-year, however, SGEN shares remain 48% higher.

Analysts were already skeptical of Seattle Genetics stock. Of the 13 brokerages assigned to SGEN, eight rate it a "hold" or worse. Meanwhile, short interest accounts for 9.4% of the stock's total available float, representing more than 14 days' worth of pent-up buying demand, at the equity's average pace of trading.

Trump Travel Ban Weighs on Airlines Stocks

Delta stock skyrocketed to a record high of $53.79 out of the gate, but has since pared its gains -- and briefly traded lower -- after the Supreme Court's decision to reinstate a majority of the Trump travel ban took the wind out of airlines' sales. At last check, DAL stock was fractionally higher at $52.94, bringing its year-to-date lead to 7.6%.

It's a good time to target Delta Airlines options. This is according to the stock's Schaeffer's Volatility Index (SVI) of 25%, which ranks in the bottom 10% of its annual range. In other words, low volatility expectations are being priced into near-term options. Further, DAL stock's Schaeffer's Volatility Scorecard (SVS) of 82 indicates the shares have exceeded options traders' volatility expectations during the past year.


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