2 China Stocks Soaring After Earnings; Plus, Mattel's Buyout Bounce

WUBA is extending its impressive year-to-date rally after an earnings beat

Managing Editor
Nov 13, 2017 at 10:12 AM
facebook twitter linkedin

U.S. stocks are trading mixed this morning, with investors still concerned over the possibility of delayed corporate tax cuts. Among the stocks making moves today are online classifieds platform 58.com Inc (NYSE:WUBA), online direct sales company JD.com Inc (NASDAQ:JD), and toy manufacturer Mattel, Inc. (NASDAQ:MAT). Here's a closer look at what's moving shares of WUBA, JD, and MAT.

WUBA Touches Fresh High Following Earnings

Shares of 58.com are trading higher this morning, following a fiscal third-quarter profit and revenue beat. The stock is up 2.3% to trade at $70.50, after earlier setting a new two-year high of $74.19. WUBA is now up 152% on the year.

Ahead of earnings, speculative players were showing some skepticism toward WUBA. The security's Schaeffer's put/call open interest ratio (SOIR) of 1.05 ranks in the 95th percentile of its annual range. This suggests an extreme preference toward short-term puts over calls.

What's more, short interest represents almost 5% of the stock's total available float. At 58.com's average daily trading volume, it would take more than eight days for the shorts to cover their bearish bets.

JD Soars on Earnings, Singles Day Success

JD.com reported a surprise third-quarter profit this morning, just one day after announcing impressive Singles Day sales of $19.1 billion -- up 50% from last year's event. The stock was trading up 4.2% at $41.65 at last check, and on pace to collect a daily close above its 50-day moving average for only the second time since late September. JD stock is up 75.7% year-over-year, and analysts following the online sales concern are looking optimistic, with 10 out of 12 sporting "buy" or "strong buy" recommendations.

Mattel Shares Soar on Hasbro Takeover Interest

Mattel stock is rallying higher on reports that fellow toymaker Hasbro submitted a takeover offer late last week. MAT was last seen up 19.6% at $17.48, with today's bull gap putting the beaten-down stock -- currently down 36.6% year-to-date -- at three-month highs.

Short interest on MAT rose more than 50% during the past two reporting periods, and now represents 21% of the stock's total available float. At Mattel stock's average daily trading volume, it would take almost 10 days for the shorts to cover their bearish bets.

Furthermore, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows MAT with a 50-day put/call volume ratio of 1.80, ranking in the 94th percentile of its annual range. This suggests puts have been bought to open over calls at a faster-than-usual clip during the past 10 weeks.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners