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The Drug Stock Burning Option Bears; Plus, 2 Retailers In Retreat

Perrigo stock is on top of the NYSE, set to top its 200-day moving average for the first time in years

Aug 10, 2017 at 2:09 PM
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U.S. stocks are trading lower today, due to mounting tensions with North Korea and dismal retailer earnings. Among the retail stocks in the spotlight are Macy's (NYSE:M) and Dillard's, Inc. (NYSE:DDS), while specialty pharmaceutical company Perrigo Company plc Ordinary Shares (NYSE:PRGO) is getting attention after its own earnings report. Here's a quick look at what's moving shares of M, DDS, and PRGO.

Macy's Most Active Stock on NYSE

Despite reporting stronger-than-expected quarterly earnings and a smaller-than-anticipated drop in comparable-store sales this morning, Macy's stock reversed earlier pre-market gains to trade down 9.5% at $20.84, and earlier touched a nearly seven-year low of $20.65. The retail stock is the most active by volume on the New York Stock Exchange (NYSE) today, with more than 29 million shares exchanged. M has lost more than half its value since touching its 52-week high of $45.41 in late November, with recent breakout attempts thwarted by its 80-day moving average. 

Option buyers were upping the bearish ante ahead of earnings, as evidenced by the stock's 10-day put/call volume ratio of 1.05 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- in the 80th percentile of its annual range.

Dillard's Drops To Worst On NYSE After Earnings

Dillard's stock is down 15.5% to trade at $62, after reporting weaker-than-expected second-quarter sales -- ranking DDS as the worst percentage loser on the NYSE today. The drop extends Dillard's reputation as a big post-earnings swinger.

After touching a roughly 16-month high of $83.44 on July 31, DDS has retreated more than 26% to today's intraday low of $61.50 -- just above its 50-day moving average -- and is now back in the red year-to-date. While DDS shares are on the short-sale restricted list today, plenty of short sellers are likely cheering. Short interest represents more than 77% of the equity's total available float.

Perrigo Rallies to Top of Big Board

Better-than-expected earnings and an upwardly revised full-year profit outlook have Perrigo stock up 18.6% to trade at $78.77 -- moving the stock to the top spot of Big Board percentage gainers. After hitting a six-and-a-half-year low of $63.69 yesterday, PRGO is now set to close above its 200-moving average for the first time since September 2015.

Option buyers had quite the bearish appetite ahead of earnings, as evidenced by PRGO's 10-day put/call volume ratio of 5.82 on the ISE, CBOE, and PHLX -- ranking in the 99th percentile of its annual range. What's more, at PRGO's average daily trading volume, it would take nearly three weeks to buy back all the stock's shorted shares. 

 
 

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