STMP Stock Nosedives; Plus, Vintage Capital Courts Rent-A-Center Again

KTOS stock has been volatile after earnings

Managing Editor
Nov 3, 2017 at 2:38 PM
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Stocks are trading higher this afternoon, as traders digest big-cap tech earnings and the nonfarms payroll report for October. Online mailing and shipping company Inc. (NASDAQ:STMP), rent-to-own supplier Rent-A-Center Inc (NASDAQ:RCII), and national security technology and supply concern Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) are making big moves. Here's a quick look at what's moving shares of STMP, RCII, and KTOS.

STMP Stock Gaps Lower After Revenue Forecast

Shares of STMP are lower, after the company's revenue forecast failed to meet expectations, overshadowing a third-quarter earnings beat. The stock gapped 20% lower to $175.92 -- a 25% drop from its Oct. 26 record high, and in territory not charted since an early August bull gap. Despite its fall, the online shipping concern still sports a 53% year-to-date gain, but could be vulnerable to analyst downgrades. All five analysts following STMP carry "strong buy" recommendations.

Rent-A-Center Booms After Takeover Bid 

Rent-A-Center stock is trading higher, after the company confirmed that Vintage Capital Management proposed to buy it for $13 per share. The proposal sent shares of RCII up 10% to $10.99 at last check, and propelled its year-over-year gain to nearly 5%. Still, the stock has dropped 21% since its early August high, which happened after Rent-A-Center rejected a higher, $15-per-share bid from Vintage Capital.

Options traders have been put-heavy towards RCII recently, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing its 10-day put/call volume ratio at 10.26. Ranking in the 83rd percentile of its annual range, this high ratio suggests that puts have been bought to open over calls at a faster-than-usual clip during the past two weeks.

KTOS Seesaws After Third-Quarter Earnings 

Kratos reported third-quarter earnings that matched estimates. Nevertheless, KTOS stock was last seen 3.3% lower at $11.58, and has explored a wide range on both sides of breakeven today. Meanwhile, Jefferies raised its price target on KTOS stock to $13 from $12.70. The equity has taken a breather since touching an annual high in early September, but still remains up over 90% year-over-year, and could find an ally in its 160-day moving average, which has contained pullbacks over the past year.

Quite a few short sellers could be cheering today. Short interest represents 12% of Kratos stock's total available float, or more than a week's worth of pent-up buying demand, at the security's average daily trading volume.


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