3 Stocks Moving on M&A Buzz

Activist investors have taken aim at MITK and YELP

Josh Selway
Dec 10, 2018 at 10:21 AM
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NutriSystem Inc. (NASDAQ:NTRI) stock is trading up 31.3% today at $44.90, following news the dieting expert is being bought by Tivity Health Inc (NASDAQ:TVTY) for $1.4 billion, or $47 per share. The shares had been trading around their downtrending 200-day moving average since early November, moving further away from their 52-week peak of $55.10 from last December.

This rally from NTRI stock may be a shock for all those shorting the name. Specifically, more than one-fifth of the float is held by short sellers, or more than nine times the average trading pace. Recent options traders had been bearish, too, with put buying more than tripling call buying during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Mitek Systems, Inc. (NASDAQ:MITK) is also gaining today, trading up 12% at $10.05, after ASG Technologies Group raised its buyout offer for the financial technology firm to $11.50 per share from $10. Elliott Management-backed ASG said it made the offer public because Mitek has refused to engage in reasonable discussions about a takeover deal.

MITK stock is now trading in double-digit territory for the first time since January, with the $10 mark acting as a ceiling in recent months. Earlier, in fact, the equity touched an annual high of $10.16. Still, the shares have enjoyed tremendous upside since bottoming at $6.32 in early October. All four brokerage firms covering Mitek Systems have "strong buy" recommendations.

Meanwhile, Yelp Inc (NYSE:YELP) stock is trading 2.1% higher at $35.33, after major shareholder and hedge fund SQN Investors LP called for an overhaul of the company's board, and said it wants the review site to consider all options, including a sale (subscription required). The stock has underperformed this year, down roughly 16% in 2018 and touching a 52-week low of $29.35 a month ago.

Most analysts have already taken a skeptical view of YELP shares, with 16 of the 21 in coverage handing out "hold" or "strong sell" recommendations. In a similar vein, options traders have pushed the 10-day put/call volume ratio at the ISE, CBOE, and PHLX to 2.29 -- ranking in the bearish 94th annual percentile.


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