2 Stocks Shaken Up By C-Suite Exits

Dismal earnings are sinking COTY as well

Managing Editor
Aug 21, 2018 at 10:36 AM
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Shares of cosmetics company Coty Inc (NYSE:COTY) and rental car name Hertz Global Holdings Inc (NYSE:HTZ) are lower in response to executive shakeups. Below, we'll take a closer look at shares of COTY and HTZ.

Dismal Earnings, CFO Departure Send COTY to Bottom of NYSE

At last check, Coty stock was down 9.5% to trade at $11.22, on track for its worst day since November 2016 and near the bottom of the New York Stock Exchange (NYSE). Not only did CFO Patrice de Talhouet resign, but the company reportedly dismal quarterly sales, due to supply-chain disruptions stemming from a trucker strike in Brazil. It was the company's first sales miss in six quarters, according to Reuters.

Today's drop has COTY dangerously close to its Aug. 16 record low of $10.75. Since a Feb. 20 annual high of $21.68, the shares have now lost nearly half their value, pressured lower by their 20-day and 50-day moving averages. 

Short sellers are likely cheering the news today, although COTY is currently on the short-sale restricted (SSR) list. Short interest increased by 9.3% in the most recent reporting period, to a record high 69.35 million shares. This represents 15% of its total available float, and 16.2 times the average daily trading volume.

HTZ Loses Momentum After CFO Switch

Looking at Hertz, the stock is down 1.1% to trade at $20.81 this morning, after CFO Thomas Kennedy announced his resignation. Nielsen Holdings (NLSN) CFO Jamere Jackson will succeed him, starting Sept. 10. Perhaps helping pare some losses is a price-target hike to $21 from $19 at J.P. Morgan Securities.

HTZ shares have rallied 57% from their mid-July lows below $13.50, bucking a historically bearish seasonal trend. Nevertheless, the stock is still staring up at its year-to-date breakeven level, and the $22-$23 region has capped several rebound attempts in 2018. In addition, it seems a near-term pullback may have been in the cards for HTZ. The stock sported a 14-day Relative Strength Index (RSI) of 71 at last night's close -- well into overbought territory.

Those looking to bet on HTZ may want to consider options. Schaeffer's Volatility Index (SVI) for the security is currently at 50%, which registers in the 4th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a historical volatility perspective.

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