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Analyst: This Drug Stock Could Quintuple

Gun stocks initially rallied today, but RGR has reversed lower

Managing Editor
Nov 6, 2017 at 2:58 PM
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Stocks are trading higher this afternoon, with traders digesting major M&A developments and high-profile Saudi Arabian arrests. Among the stocks making big moves this afternoon are luxury retailer Michael Kors Holdings Ltd (NYSE:KORS), firearm producer Sturm Ruger & Company Inc (NYSE:RGR), and woman's healthcare company TherapeuticsMD Inc (NASDAQ:TXMD). Here's a quick look at what's moving shares of KORS, RGR, and TXMD.

KORS Hits New High After Earnings Beat, Guidance

Michael Kors stock is up 15.2% at $54.87, and earlier touched a fresh annual high of $55, after the luxury retailer reported a fiscal second-quarter earnings beat and raised its full-year sales forecast. As a result, Jefferies raised its price target on KORS stock to $62 from $60.

Options traders have been put-heavy towards KORS recently, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing its 10-day put/call volume ratio at 2.71. Ranking in the 93rd percentile of its annual range, this high ratio suggests that puts have been bought to open over calls at a faster-than-usual clip during the past two weeks.

Gun Stocks Reverse Early Gains

Shares of RGR spent the majority of the morning higher, but at last check were 1.7% lower at $49.95. Gun stocks initially ticked higher following Sunday's mass shooting in rural Texas that killed 26, as some traders expect a run on firearms before possible gun-control legislation can be introduced. RGR stock is down 5.2% year-to-date, with recent rebound attempts stalling in the face of its 200-day moving average and the key $55 area.

A few short sellers could be breathing a sigh of relief after RGR stock reversed early gains. Short interest represents more than 24% of Sturm Ruger stock's total available float, or just under three weeks' worth of pent-up buying demand, at the security's average daily trading volume.

TXMD Stock Skyrockets on 'Most Important Event in the Company's History'

TXMD stock is skyrocketing, after the company reported a narrower-than-expected third-quarter loss and said it plans to resubmit a marketing application for its TX-004HR drug. "The ability to resubmit the TX-004 NDA without the need for 12-month endometrial safety data is, perhaps, the most important event in the company's history," said Cantor Fitzgerald, which has an "overweight" rating and $32 price target on TXMD -- more than five times the stock's current price. The stock was last seen 35.3% higher to trade at $5.90, in territory not touched since mid-September.

Short interest on TXMD has fallen over 27% during the past two reporting periods, to 41.1 million shares. That said, short interest still accounts for over 20% of the stock's float, or 11.2 times' TXMD's average daily volume.

 
 

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