Karuna Quintuples; Coty Rises on Kylie Deal

Karuna Therapeutics' schizophrenia drug met its mid-stage goals

Managing Editor
Nov 18, 2019 at 2:28 PM
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Stocks are hitting fresh highs to start the week, although oil prices are lower. Among three names making notable moves higher today are biotech issue Karuna Therapeutics Inc (NASDAQ:KRTX), cosmetics concern Coty Inc (NYSE:COTY), and Russian online services stock Yandex NV (NASDAQ:YNDX). Here's a quick look at what's moving the shares of KRTX, COTY, and YNDX.   

KRTX's Schizophrenia Drug Fuels Major Breakout

The best stock on the Nasdaq today by a wide margin is Karuna Therapeutics, last seen up 421.7% to trade at $92.23. That's not a typo; KRTX earlier nabbed a record high of $94.40, after the company's experimental drug for schizophrenia met the main goals of a mid-stage trial. Karuna is expected to meet with the Food and Drug Administration (FDA) in the middle of 2020 to discuss the next steps. KRTX is now trading more than five times its June 28 initial public offering price of $16. 

While all four analysts rate the stock a "buy" or better, bull notes could still vault it higher. KRTX's average 12-month price target sits at $39, which is now a 41% discount to its current perch. 

COTY Climbs After Taking Control of Kylie Jenner's Company

Coty stock is up 1.1% to trade at $12.03 at last check, after the cosmetics company announced it bought a majority stake in Kylie Jenner's make-up business for $600 million. Coty now owns 51% stake in Jenner's business, and values it at $1.18 billion. COTY is up 82.4% in 2019, and last week's pullback found support at its pre-bull-gap levels from Nov. 6. 

Now actually looks like a nice time to buy premium on COTY, as its Schaeffer's Volatility Index (SVI) of 32% ranks in the bottom annual percentile, pointing to low volatility expectations at the moment.

YNDX Restructuring Catches Options Traders' Eye

Yandex stock is up 11.4% to trade at $39.87, after announcing it will restructure its corporate governance to better acclimate to regulatory risk. In addition, Yandex announced a $300 million stock buyback, and the double-dose of headlines had the stock crossing the $40 threshold earlier for the first time since Aug. 1. YNDX has now tacked on 37.5% since an early October encounter with the $29 level. 

Options traders have responded in kind. More than 11,000 contracts have changed hands today, double the average intraday amount and volume pacing for the 97th percentile of its annual range. Leading the charge is the December 36 put, where new positions are being opened. There's also opening action at the weekly 11/22 40-strike call.


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