Chip Stock Sinks as Trade Fears Eat Into Forecast

TTD is one of the best stocks on Wall Street today

Managing Editor
Aug 10, 2018 at 2:39 PM
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Stocks are getting hammered today, as volatility returns amid the crash of the Turkish currency lira. Among the stocks making moves higher are digital advertising expert Trade Desk Inc (NASDAQ:TTD) and pharmacy benefits provider Express Scripts Holding Company (NASDAQ:ESRX), while semiconductor stock Microchip Technology Inc. (NASDAQ:MCHP) is getting crushed. Here's a closer look at what's driving shares of TTD, ESRX, and MCHP today.

Earnings Vaults Trade Desk Stock Near Top Of Nasdaq

At last check, Trade Desk stock was up 36.1% to trade at $126.92, the second-best on the Nasdaq today, thanks to a second-quarter earnings and revenue beat. In addition, no fewer than seven brokerages chimed in with price-target hikes, the highest being Stifel and Oppenheimer, to $130. Earlier, the stock soared to a record high of $130.84, and now has nearly tripled in 2018. 

A short squeeze could be helping fuel this surge. Short interest fell by 15% in the most recent reporting period, yet the 3.85 million shares sold short represents roughly 12% of TTD's total available float and more than a week's worth of pent-up buying power. 

Express Scripts Stock Climbs After ISS Backs Cigna Deal

Express Scripts stock is up 3.1% to trade at $84.39, after advisory firm ISS recommended shareholders support Cigna's (CI) deal to buy ESRX for $52 billion. On Wednesday, billionaire investor Carl Icahn recommended voting against the impending deal. Earlier today, ESRX nabbed a two-and-a-half year high of $85.42, extending its year-over-year lead to 40%. Should today's price action hold, the security would be on track for its best week since March 9. Meanwhile, Evercore ISI raised its price target to $87.

In the options pits, puts have been prevalent. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows ESRX with a 10-day put/call volume ratio of 3.61, which ranks in the elevated 86th percentile of its annual range. An extended surge from ESRX could lead to an unwinding of these bearish bets.

Microchip Stock Pummeled By Cautious Outlook

Microchip stock is down 11.6% to trade at $86.70, on track for its worst day since October 2014, after the semiconductor name's second-quarter revenue forecast came in well below analyst expectations, with the company citing the trade tensions between the U.S. and China. Today's drop takes MCHP stock below short-term support near the $92 level, also home to its 200-day moving average. Now, the security sits just below its year-to-date breakeven mark.

Elsewhere, a number of price-target cuts came through, including a reduction to $98 from J.P. Morgan Securities. Still, 13 of 14 brokerages in coverage rate the stock a "buy" or "strong buy," with not a single "sell" rating to be found. Keep an eye out for more bearish attention on MCHP stock going forward.


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