Short Squeeze Sends Lumber Liquidators Stock to 2-Year Highs

Beleaguered LL stock scored a big win with its same-store sales beat

Aug 1, 2017 at 10:32 AM
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U.S. stocks are trading higher ahead of a busy day of earnings reports. Sports apparel company Under Armour Inc (NYSE:UAA), flooring supplier Lumber Liquidators Holdings Inc (NYSE:LL), and online retail platform Shopify Inc (US) (NYSE:SHOP) are three stocks in the news and making big moves this morning. Here's a quick look at what's moving shares of UAA, LL, and SHOP.

Traders React to Under Armour's Slashed Guidance, Job Cuts

Under Armour stock is trading lower -- and extending its year-to-date slump -- despite reporting a slimmer-than-expected quarterly loss and revenue that narrowly beat the consensus. Traders are keying in on UAA's freshly cut full-year sales forecast, along with a restructuring plan that involves cutting 2% of its workforce. Last seen trading down 7.1% at $18.60, the athletic wear stock is now down 36% in 2017.

Heading into this morning's earnings report, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) revealed a 10-day call/put volume ratio of 3.36 for UAA stock, which ranks in the 90th percentile of all other ratios in the past year. This means that calls were bought to open over puts at an unusually rapid pace ahead of earnings.

Lumber Liquidators Stock Reaches 2-Year High

Lumber Liquidators reported its first profit in over two years earlier, with same-store sales for the second quarter rising 8.8% to comfortably top analysts' expectations. Today's bull gap has LL stock trading up 30.6% at $32.26, in territory the shares haven't explored since April 2015.

With 24.6% of LL's float sold short, it's likely we're seeing a short squeeze play out for the stock post-earnings. At the equity's average daily trading volume, it would take 12.4 sessions for all of these shorted shares to be covered.

SHOP Stock Soars Past Analysts' Expectations

Shopify beat analysts' expectations by reporting a narrower-than-expected loss for the second quarter today. The U.S.-traded shares of SHOP are up 9.5% at $101.15, down a bit from this morning's newly set record high of $105.79.

With SHOP stock more than doubling year-to-date -- and impressing on earnings today -- some analyst upgrades could be coming down the pike. Among the 23 brokerage firms following the shares, 12 still carry a "hold" or "sell" rating.

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