2 Stocks Tanking After Earnings

CLF is rewarding short sellers today

by Patrick Martin

Published on Oct 20, 2017 at 2:39 PM

Stocks are higher this afternoon, with the Dow, S&P 500 Index, and Nasdaq all touching record highs once again. Mining concern Cleveland-Cliffs Inc (NYSE:CLF) and fast-food firm Del Taco Restaurants Inc (NASDAQ:TACO) are sinking, while software stock Atlassian Corporation PLC (NASDAQ:TEAM) is surging after earnings. Here's a quick look at what is moving shares of CLF, TACO, and TEAM.

Cleveland-Cliffs Stock Reverses Course After Earnings Miss

Cleveland-Cliffs stock is down 6% to trade at $6.99, after the company reported third-quarter earnings below Wall Street estimates while also lowering its 2017 production estimates. CLF stock is now back below its 50-day moving average, and on a year-to-date basis, it's down almost 16%. Short sellers are likely cheering this drop. Short interest has increased by 14.4% during the last two reporting periods to 36.74 million shares, which represents nearly 16% of the equity's total available float.  

Del Taco Stock Plummets After Subpar Earnings Report

Del Taco Restaurants stock is down 19% to trade at $12.50, among the worst on the Nasdaq Composite and currently short-sale restricted, after the fast-food firm reported lackluster third-quarter earnings. The drop today takes the stock to its lowest level since April. Since touching a two-year high of $15.99 on Sept. 27, TACO stock has shed almost 22%. Despite the equity's struggles, analysts are firmly in its corner. Of the six brokerages covering TACO, five rate it a "buy" or "strong buy."

Earnings Beat Powers Atlassian Stock To Record High

Atlassian stock is up 23% to trade at $49.50, near the top of the Nasdaq today after the company reported fiscal first-quarter earnings that topped Wall Street estimates. The company also boosted its full-year guidance. The security earlier hit a record high of $50.88, and analysts are betting on more upside. For instance, several price-target hikes have come through today, with BMO setting the highest mark at $51. Meanwhile, today's move could be pleasing options traders, since call buying has been vastly more popular than put buying during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This is according to its 10-day call/put volume ratio of 6.80.

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