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Speculators bet on Akorn, Inc. (AKRX) to rebound from today's losses
Akorn, Inc. (NASDAQ:AKRX) is getting hammered today after reaffirming its 2015 guidance, dropping 12.2% to trade at $45.50. The stock was also added to the short-sale restricted list. In the options pits, overall volume is at six times the normal intraday rate, with traders apparently betting on AKRX's struggles to be short-lived, as calls are outpacing puts by a nearly 5-to-1 margin.
Looking closer, the equity's most popular option today is the in-the-money April 45 call, which traders are buying to open as they bank on a rebound in the underlying by options expiration, at the close on Friday, April 17.
Today notwithstanding, AKRX has been phenomenal on the charts, more than doubling over the past year. In fact, the shares hit an all-time high of $55.86 late last month. Regardless, short sellers continue to flock to the security, with short interest increasing almost 12% in the latest reporting period. Nearly 16% of AKRX's float is now in the hands of short sellers, accounting for roughly nine days' worth of trading, at typical daily volume levels.
Elsewhere, the shares saw their price target slashed this morning by Sterne Agee (to $51) and Jefferies (to $56). Both brokerage firms maintained "buy" ratings on the equity, though, falling in line with the general sentiment on the Street; nine out of 11 analysts tracking Akorn, Inc. (NASDAQ:AKRX) deem it a "buy" or better.