2 Pharma Stocks Gapping Higher Today

Jerome Stevens Pharmaceutical ditched Lannett for Amneal

by Patrick Martin

Published on Aug 20, 2018 at 2:26 PM

Stocks are higher today on trade optimism, with the Dow outperforming, and the Nasdaq erasing earlier losses. Looking at individual names, pharma concerns Amneal Pharmaceuticals Inc (NYSE:AMRX) and Achieve Life Sciences Inc (NASDAQ:ACHV) are gaining ground, as is exchange operator Cboe Global Markets Inc (NASDAQ:CBOE). Here's a closer look at what's moving shares of AMRX, ACHV, and CBOE.

New Supply Agreement Vaults AMRX to Top of NYSE

Amneal Pharmaceuticals stock is up 11.3% to trade at $23.95 -- one of the best stocks on the New York Stock Exchange (NYSE), and on track for its best day since Oct. 18 -- after Jerome Stevens Pharmaceuticals ditched Lannett Company (LCI) to enter a supply agreement with Amneal for its Levothyroxine sodium tablets. An analyst at RBC said this "surprise" win increases Amneal's chances of meeting its 2020 earnings target, while Cantor Fitzgerald reiterated its $35 price target, saying AMRX's pipeline is "under appreciated."

A round of short covering could also be adding to today's gains. Although short interest fell 13.9% in the most recent reporting period, there are still 5.22 million shares sold short -- representing almost 8% of AMRX's available float or 4.6 times the average daily pace of trading.

Upgrade Boosts ACHV Shares

Achieve Life Sciences stock is up 8.9% to trade at $3.05, after Ladenburg Thalmann initiated coverage on the pharma name with a "buy" rating and $12 price target -- a 328% premium to Friday's close at $2.80. The analyst in coverage is optimistic about the company's smoking cessation drug. Despite the surge today, the shares remain stuck beneath their 30-day moving average, a trendline that has ushered the stock lower for most of 2018. Overall, ACHV has given back 77% this year.

VIX Futures Volume Growth Draws Analyst Love For CBOE

Earlier this morning, Raymond James upgraded CBOE to "outperform" from "market perform," citing the improving volume and open interest trends in VIX futures. The brokerage firm also set a $115 price target -- a 20% premium to last week's close at $95.77. In response, CBOE is up 2.9% to trade at $98.50, and on track for its seventh straight win. This would mark the stock's longest daily win streak since late January.

Those looking to bet on CBOE may want to consider options. Schaeffer's Volatility Index (SVI) for the security is currently at 20%, which registers in the 15th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a volatility perspective.

What's more, the equity has consistently rewarded premium buyers over the past year. This is per the stock's Schaeffer's Volatility Scorecard (SVS), which is currently docked at an elevated 97 out of 100. This suggests that CBOE stock has regularly made larger-than-expected moves on the charts, compared to what its options were pricing in.


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