CBD Specialist Smashes Skeptics with Earnings Report

GWPH shares could threaten their September record peak

by Josh Selway

Published on Feb 27, 2019 at 9:16 AM
Updated on Jun 24, 2020 at 10:16 AM

GW Pharmaceuticals PLC (NASDAQ:GWPH) is trading up 12.5% before the open, as investors applaud the cannabidiol treatment expert's fourth-quarter results, which featured a 67% increase in revenue. In response, J.P. Morgan Securities and Stifel raised their respective price targets for GWPH stock to $180 and $191. Most analysts are already bullish, with 90% handing out "buy" or "strong buy" recommendations, but many others have been betting against the security.

For instance, short interest jumped almost 58% in just the last two reporting periods, continuing the sharp increase we've seen in 2019. This puts nearly 12% of the total float in short sellers' hands, equating to 6.6 days' worth of buying power, based on average daily trading volumes.

Not only that, but put buying was extremely popular at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ahead of earnings. Data shows a 10-day put/call volume ratio of 1.64, which ranks just 1 percentage point from an annual high. Said simply, options traders were showing unusually bearish tendencies ahead of the quarterly report.

On the charts, GWPH shares had been finding support from the 200-day moving average in recent weeks, a trendline that also helped the stock back in August. GW Pharmaceuticals was up 29% year-over-year coming into today, and now could take aim at its September all-time high of $179.65.


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