This Red-Hot RV Stock Could Be Ripe for a Short Squeeze

MOMO stock is lower on concerns about revenue growth

Managing Editor
Nov 28, 2017 at 1:40 PM
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Stocks are trading at record highs, still buzzing on solid Cyber Monday sales stats. Among the names making big moves are communications company CenturyLink, Inc. (NYSE:CTL), RV manufacturer Winnebago Industries, Inc. (NYSE:WGO), and Chinese software concern Momo Inc (NASDAQ:MOMO). Here's a quick look at what's moving shares of CTL, WGO, and MOMO.

CTL Falls on MoffettNathanson Price Cut

Shares of CTL have moved lower, down 0.6% at $13.53, after the telecom stock received a price-target cut by MoffettNathanson to $18 from $22. The analysts cited faster-than-expected deterioration of the company's business, and said there are more attractive opportunities elsewhere in the sector. CenturyLink stock touched a fresh 20-year low of $13.17 earlier, and has dropped roughly 52% from its mid-June highs.

Meanwhile, short interest has plummeted almost 58% during the past two reporting periods, yet CTL hasn't been able to capitalize. More negative notes could be in store, too, as the underperforming stock still boasts six "buy" or better ratings from analysts.

WGO Stock Soars With THO on Rising RV Sales

Winnebago stock is joining sector peer Thor Industries (THO) in moving higher, as traders celebrate strong Thor earnings and expectations for RV shipments to hit a nearly 40-year high in 2017. WGO was up 6% at $53.55, at last check, after touching a fresh record high of $54.80, and is sporting a 69% year-to-date gain.

A short squeeze could add fuel to the equity's fire. Short interest jumped 21.4% during the past two reporting periods, and now represents more than six sessions' worth of pent-up buying demand, at Winnebago stock's average pace of trading.

MOMO Plummets on Revenue Growth Concerns

Shares of Momo gapped lower after the Chinese software concern forecast slowing revenue growth. MOMO stock was down 16% at $26.11, at last check, but remains 40% higher for 2017.

Analysts were optimistic ahead of earnings, as three out of four following the stock carrying "strong buy" ratings. Meanwhile, options traders today are picking up MOMO puts at seven times the average intraday pace, with potential buy-to-open action spotted at the January 25 put. By purchasing the puts to open, the buyer expects MOMO to retreat beneath $25 over the next couple of months.

 

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