Tyson Beats on Earnings, Talks Swine Flu Outbreak

Put buying had been picking up on TSN

by Josh Selway

Published on Aug 5, 2019 at 10:40 AM

Tyson Foods, Inc. (NYSE:TSN) is trading up 5.9% this morning at $84.43, thanks to a quarterly earnings beat. The meat supplier also said it received a subpoena from the Department of Justice to provide documents and information on the chicken industry, and that it's complying with the requests. Traders are also anxious to learn how the swine flu fever outbreak in China is effecting Tyson, as many analysts expected it to be a boon for the stock, but executives suggested tailwinds may not be seen until next year. They added that the company is in discussions with meat buyers in China.

Today's pop in the share price could be bad news for options traders, who were picking up puts at an accelerated pace during the past two weeks at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The security has a 10-day put/call volume ratio of 1.80, which ranks in the 99th annual percentile, showing a near annual extreme in put buying compared to call buying. At the same time, a closer look at the most popular options during that time shows heavy interest in a number of options that expired before this week, so maybe these bears got out just in time.

Today's post-earnings move is much bigger than the usual earnings reaction the shares have experienced in the past two years, averaging a swing of 2.7% during that time. TSN does have a history of making moves bigger than the options market was pricing in, based on the Schaeffer's Volatility Scorecard (SVS) of 70, out of a possible 100.

Not only does today's price action have the security at record highs, so far trading as high as $85.43, but it may be more important that it has the shares pushing north out of a recent area of congestion in the $75-$83 range. Overall, Tyson Foods stock has added over 59% in 2019. 

 


A Schaeffer's exclusive

11 Stocks to Buy Before Leap Day

Access your FREE insider report before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.
March Kicks Off with Nonfarm Payrolls, Retail Earnings
Several retail names, including Target, will close out a wild earnings season
Etsy Stock Scores After Substantial Earnings Beat
An exodus of short sellers could fuel more tailwinds
The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.