Schaeffer's 43rd Anniversary Stock Picks in 2024

German Drug Stock Up Over 200% Today

AFMD options volume today is unprecedented

Managing Editor
Aug 28, 2018 at 2:42 PM
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Stocks are a mostly higher today, with the Nasdaq and S&P 500 again touching record highs. Looking at individual names, shares of German drugmaker Affimed NV (NASDAQ:AFMD) and cosmetics company Coty Inc (NYSE:COTY) are higher, while software stock Mitek Systems Inc (NASDAQ:MITK) is struggling. Here's a closer look at what's moving shares of AFMD, COTY, and MITK.

Drug Pact Vaults AFMD Stock to Top of Nasdaq

Affimed stock is up 214% to trade at $5.02, and earlier touched a two-year high of $5.35, after the company secured a drug pact with Genentech to develop immunotherapeutic treatments for multiple cancers. Affimed will receive $96 million up front, and is eligible to score an additional $5 billion in milestone payments and royalties.

Jefferies responded by upgrading the drug stock to "buy" from "hold," while more than doubling its price target to $4 from $1.80. BMO chimed in with a price-target hike to $5 as well. AFMD is the best stock on Nasdaq by far today, and has now gained 288% in 2018.

Not surprisingly, AFMD call options are flying off the shelves today. Roughly 7,300 calls have changed hands -- 127 times the average intraday volume, and nearly 10 times the previous annual high. In the lead today is the September 5 call, where new positions are being opened, indicating options traders are expecting Affimed's rally above $5 to continue into the next month. 

Upgrade Pushing COTY Higher

Coty stock is up 6.1% to trade at $12.88, after Morgan Stanley upgraded the cosmetics name to "overweight" from "equal weight," citing the company's attractive valuation. However, the analyst in coverage also trimmed their price target to $14.50 from $17.

COTY is on track to close above its 30-day moving average for the first time since July 17. Nevertheless, the stock is still staring at a 35% deficit in 2018, and touched a record low on Aug. 16, just before the company reported ugly earnings and announcing a C-suite shakeups. Instead, this may the best cosmetic stock to target next month.

Those wanting to speculate on Coty stock may want to consider doing so with options. Its Schaeffer's Volatility Index (SVI) of 33% ranks in the 10th annual percentile, meaning short-term options are pricing in lower-than-usual volatility expectations at the moment, a boon to potential premium buyers.

C-Suite Shakeup, Downgrade Sink Mitek Stock

Mitek Systems stock is down 16.2% to trade at $7.12, and earlier today fell to a fresh annual low of $6.85, after the company announced the departure of its CEO and CFO. Benchmark downgraded the software stock to "hold" from "buy" in response to the uncertainty now facing the company. MITK is the second-worst stock on the Nasdaq today, and has now shed one-fifth of its value this year alone. 

Benchmark could soon be joined by other analysts stepping to the sidelines. All four of the brokerages covering MITK rate it a "strong buy," and its average 12-month price target of $13.75 is now nearly double its current perch.


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