Buffett Boosts Airlines; Biotech Stares at Worst Month in 9 Years

MDXG stock is facing its worst month in nine years

Feb 26, 2018 at 2:50 PM
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U.S. stocks have steadily climbed today, as the Dow heads for another huge gain. Among the equities making noise, biotech MiMedx Group Inc (NASDAQ:MDXG) and laser maker Iridex Corporation (NASDAQ:IRIX) stocks are sinking, while airline name JetBlue Airways Corporation (NASDAQ:JBLU) is higher. Here's a closer look at what shares of MDXG, IRIX, and JBLU are reacting to today.

Federal Probe Guts MiMedx Group Stock

MiMedx Group stock is down 12% to trade at $6.90 -- near the bottom of the Nasdaq today -- after Bloomberg reported the company is under federal investigation for pricing and distribution practices. Just last week, MDXG stock tanked after the firm delayed earnings and announced an internal investigation into sales and distribution practices.

MDXG stock earlier touched a three-year low of $6.05, and is pacing for its worst month since February 2009, giving up nearly 60% so far. Short-term options traders are likely cheering the equity's demise, with MDXG's Schaeffer's put/call open interest ratio (SOIR) of 2.22 ranking in the 93rd annual percentile. This means near-term put open interest outweighs call open interest by a much wider-than-normal margin.

Drilling down, peak open interest of 20,228 contracts is located at the March 10 put. Data from the major options exchanges points to significant buy-to-open activity at this in-the-money strike in recent weeks.

Laser Recall Sends IRIX Stock Spiraling

Shares of Iridex are down 17.4% to trade at $6.05 -- also one of the worst on the Nasdaq today -- after the company was forced to recall a laser accessory following reports of patients experiencing permanent eye damage. Earlier, IRIX shares touched a four-year low of $5.31.

The equity has given up nearly 60% in the past year, with rebound attempts stalling near its 160-day moving average. Although IRIX is on the short-sale restricted list, short sellers have been in the driver's seat, and these bearish bets represent a whopping 15.1 times the stock's average daily trading volume.

JBLU Stock Heads Toward Highest Close Since January

Airline stocks are getting a boost today, after Warren Buffett today said in his annual letter to shareholders that he "wouldn't rule out owning an entire airline," and he's interested in making "one or more huge acquisitions." JetBlue stock was last seen 2.6% higher to trade at $21.88, set for its highest close since Jan. 24.

Should the equity's upward momentum continue, a round of analyst upgrades could add fuel to the fire. Just three of 11 brokerage firms deem JBLU worthy of a "buy" or better rating. However, the stock's tailwinds could stall in the $23-$23.50 neighborhood, if history repeats, as this area has contained rally attempts for the past two years.

 

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