Gun Stock Sinks to Multi-Year Low as BlackRock Enters the Fray

Call buying has been popular on MOMO stock

Managing Editor
Feb 23, 2018 at 3:22 PM
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U.S. stocks have steadily climbed today, as the Dow heads for another triple-digit victory. Among other names making noise, gun stock American Outdoor Brands Corp (NASDAQ:AOBC) and biotech stock Anika Therapeutics (NASDAQ:ANIK) are lower, while Chinese mobile app concern Momo Inc (NASDAQ:MOMO) is soaring. Here's a closer look at what shares of AOBC, ANIK, and MOMO are reacting to today.

Gun Control Debates Dig Into AOBC Stock

American Outdoor Brands stock, formerly known as Smith & Wesson, is down 1.4% to trade at $9.98 -- and earlier touched a three-year low of $9.43 -- after asset manager BlackRock weighed in on gun stocks following the Florida school shooting last week. BlackRock, a major investor in AOBC, said it will meet with gun makers and distributors to "understand their response" amid the divisive gun control debate that has erupted.

AOBC stock has now shed 26.6% in 2018, and is on track for its ninth consecutive losing month. Any breakout attempts during this span have been contained by the shares' descending 40-day and 80-day moving averages.

Short sellers have been piling on amid the stock's steady downturn. Short interest increased by 24% since its mid-September low, and represents roughly 14% of AOBC's total available float. 

Downgrade Pummels ANIK Stock

Shares of Anika Therapeutics are down 9.9% to trade at $51.98 -- on track for their worst one-day loss since December 2015 -- after Barrington Research downgraded the biotech name to "market perform" from "market outperform." The analyst in coverage sees a cap on price appreciation during the next few quarters. In response, ANIK shares gapped below their 160-day moving average, which caught the stock's pullback in late December. 

Most analysts remain in the stock's corner, as three out of four brokerage firms rate it a "strong buy." Furthermore, ANIK's average 12-month price target of $67 sits 30% higher than the stock's current perch. This indicates there is ample room for more downgrades and/or price-target cuts on the struggling biotech name.

Dating App Purchase Boosts MOMO Stock

Shares of Momo are up 14.2% to trade at $34.86, and on track for their best one-day gain since August 2016, after the company announced the acquisition of dating app Tantan in cash-and-stock deal. MOMO stock is now set to close above its 200-day moving average for the first time since mid-September. The equity has tacked on 55% since falling to an annual low of $22.49 on Dec. 1, and is on pace to post its second straight weekly gain of more than 12%. 

In the options pits, calls have become more popular recently. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MOMO's 10-day call/put volume ratio of 6.57 ranks in the 92nd annual percentile.

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