GrubHub Inc (GRUB) Sinks to New Lows As Uber Moves In

Uber's food delivery service is bad news for GrubHub Inc (NYSE:GRUB)

Jan 21, 2016 at 2:38 PM
facebook X logo linkedin


As most of Wall Street enjoys a rare rally, food delivery concern GrubHub Inc (NYSE:GRUB) is watching from the sidelines. The shares were last seen down 5.5% at $19.30, earlier hitting an all-time low of $18.65, as traders react to news that Uber is expanding its food delivery platform, UberEats. The stock has now lost almost 60% since its all-time high of $47.95 in late March. 

Meanwhile, analysts are also displaying newfound skepticism. Cowen and Company this morning lowered its price target to $20 from $22. If the shares don't turn things around on the charts, more bearish notes could be in store, too. For one, GRUB's average 12-month price target still sits at $30.95. Plus, 64% of covering analysts say the stock is a "buy" or better, with none issuing "sell" recommendations.

Pessimism is already prevalent in other areas of Wall Street. Short interest increased by over 11% during the past two reporting periods. Now, it would take GRUB short sellers exactly three weeks to buy back their bets, going by average daily trading volumes. 

What's more, put buying has nearly hit extreme levels recently. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GRUB sports a 10-day put/call volume ratio of 4.45, which is higher than 98% of all similar readings taken in the past 12 months. In short, there's been intense interest in put buying recently. 

In today's trading, puts are outpacing calls by roughly a factor of two. One of the most popular contracts is the February 12.50 put. However, it appears traders may be selling to open the option as a way to bet on GRUB holding above $12.50 through front-month option expiration on Friday, Feb. 19. 

And selling premium on GrubHub Inc (NYSE:GRUB) looks like a great idea right now. The stock's Schaeffer's Volatility Index (SVI) comes in at 93% -- just 1 percentage point from an annual high. In other words, premium on the stock's near-term options is rather steep at the moment, from a volatility perspective.


Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI