FIVE has added 48% year-to-date
The shares of Five Below Inc (NASDAQ:FIVE) are up 2.9% to trade at $98.21 today, after Loop Capital upgraded the discount retailer to "buy" from "hold," while nudging its price target up to $120 from $110. The analyst in coverage is encouraged by the company's improving merchandise and brand awareness, and believes it is "more economic downturn resistant" than other retailers.
It's been a volatile stretch for Five Below stock, based on its 30-day historical volatility of 54.7%, which ranks in the 92nd annual percentile. Back in September, FIVE gapped higher after a blowout earnings report, netting a record high of $136.13. The shares pulled back from there, but appear to have found support at their 200-day moving average. Overall, FIVE boasts a 48% lead year-to-date.
The equity is ripe for a short squeeze, and that could keep the wind at FIVE's back. Short interest increased by 19.2% in the last reporting period to 3.61 million shares, the most since Aug. 1. This now accounts for nearly 7% of the stock's float and at FIVE's average daily volume, it would take more than four days for all of the bearish bets to be covered.
In the options pits, calls are in vogue, despite limited absolute volume. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows 3,012 calls were bought to open in the last 10 days, compared to 1,780 puts. This call/put volume ratio of 1.69 registers in the elevated 72nd percentile of its annual range, pointing to a healthier-than-usual appetite for bullish bets lately.