Earnings Drive AAP Stock Lower; Transocean Stock Sinks to Record Low

Transocean agreed to buy competitor Songa Offshore for $1.1 billion

Aug 15, 2017 at 1:18 PM
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U.S. stocks are trading slightly higher today, as the Dow tries to climb back above the 22,000 level and U.S.-North Korea drama dies down. Among the stocks in the spotlight today are car parts retailer Advanced Auto Parts, Inc. (NYSE:AAP), oil rig stock Transocean LTD (NYSE:RIG), and network equipment provider Extreme Networks, Inc (NASDAQ:EXTR). Here's a quick look at what's moving shares of AAP, RIG, and EXTR.

Earnings Drive Advance Auto Parts Stock Lower

Weaker-than-expected second-quarter earnings and discouraging comparable-store sales guidance have driven Advance Auto Parts stock down 20.7% to trade at $86.70, after hitting a nearly four-year low of $82.21 earlier. Today's plunge ranks AAP as the worst stock on the New York Stock Exchange (NYSE) and the S&P 500 Index (SPX). The car parts stock also made the short sale resticted (SSR) list today, and is now down almost 50% year-to-date. AAP could be at risk for bearish analyst attention in the near term, as half of the 18 analysts following AAP stock rate it a "buy" or better.

Transocean to Buy Songa Offshore, Stock Sinks

Joining AAP on the SSR list is Transocean stock, which is trading down 7.9% at $7.72, after agreeing to buy its Norwegian oil rig competitor Songa Offshore for $1.1 billion. RIG touched a record low of $7.55 in intraday trading, and is now down more than 47% year-to-date.

RIG options traders, however, may be kicking rocks. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.58 is at the very bottom of its annual range, indicating short-term options players haven't been more call-biased in the past 12 months. 

Extreme Networks Surges After Earnings

Better-than-expected fiscal fourth-quarter earnings has Extreme Networks stock up 12.6% to trade at $10.47. The network equipment stock is near the top of today's list of biggest percentage gainers on the Nasdaq, and has now more than doubled in 2017. EXTR shares hit an intraday high of $10.69 -- just below their June 9 15-year high of $11.03 -- and are poised to close above their 40-day moving average for the first time since June.

In light of EXTR's post-earnings volatility crush, the stock's near-term options are attractively priced, as evidenced by its Schaeffer's Volatility Index (SVI) of 67% -- lower than 85% of all other readings from the past year.

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