HA Stock Grounded After Southwest Eyes Hawaii

News of Southwest's low-cost flights to Hawaii are hurting HA shares

Managing Editor
Mar 4, 2019 at 2:22 PM
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The Dow is down today, erasing early morning gains after some weak economic data. Among the stocks struggling are airliner Hawaiian Holdings, Inc. (NASDAQ:HA), kids clothing concern Children's Place Inc (NASDAQ:PLCE), and telecommunications name CenturyLink, Inc. (NYSE:CTL). Here's a quick look at what's got the shares of HA, PLCE, and CTL struggling today.

Hawaiian Holdings Tests YTD Breakeven Level

Hawaiian Holdings stock is down 10% to trade at $26.65, taking a hit after sector peer Southwest Airlines (LUV) announced plans for low-cost flights to Hawaii. HA's losses today have the stock clinging to its year-to-date breakeven level, but staring at a larger 12-month loss of 23.5%. Plus, the shares' breakouts in 2019 have found stiff resistance at their 80-day moving average.

In the options pits, HA sports a Schaeffer's put/call open interest ratio (SOIR) of 1.65, indicating that put open interest heavily outweighs call open interest among options expiring within three months. This ratio arrives at the 99th percentile of its annual range, suggesting near-term options traders have rarely been more put-biased in the past year.

New Lows for PLCE After Earnings, Revenue Misses

Children's Place stock sits near the bottom of the Nasdaq, down 13% at $82.31, after the company's fourth-quarter earnings and revenue drastically missed expectations. Additionally, the firm gave a weak 2019 forecast, and projected a "highly disruptive" first half due to "unprecedented near-term visibility challenges" following the bankruptcy of Gymboree.

PLCE earlier tapped a new two-year low of $82.25, breaching short-term support at the $84 level. The shares are now on track for their worst day since Dec. 6, which was another post-earnings bear gap of 13.4%. 

Although the stock landed on the short-sale restricted (SSR) list earlier, short sellers are likely cheering today's drop. Short interest increased by 35% in the most recent reporting period to 3.85 million shares, the most since November 2017. This represents 24% of PLCE's total available float, and 5.5 times the average daily trading volume. 

SEC Filing Delay Buries CTL Near Bottom of NYSE

CenturyLink stock is down 7.4% at $12.01, one of the worst stocks on the New York Stock Exchange (NYSE) today. The telecom services name filed to delay its annual 10-K report with the Securities and Exchange Commission (SEC), citing "material weaknesses" with internal indicators -- though it doesn't expect the new results to differ from its mid-February numbers. CTL earlier hit a record low $11.66, and has now racked up a 20% deficit in 2019. The stock has been carving out a channel of lower lows following its Aug. 21 annual high of $24.20.

Calls have been all the rage in CTL's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security has racked up a 10-day call/put volume ratio of 3.63, indicating traders have bought to open nearly four calls for every put on the stock in the past two weeks. This ratio is in the 85th percentile of its annual range, pointing to a much healthier-than-usual appetite for bullish bets over bearish of late. However, given that 19% of CTL's total available float is sold short, its possible some of these call buyers could be shorts seeking an options hedge.

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