Q2 STOCKS TO BUY

Tiffany Stock Eyes Best Day in Years After Earnings, Share Buyback

Plus, one analyst sees KemPharm's ADHD drug a "transformative catalyst"

Managing Editor
May 23, 2018 at 3:00 PM
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The stock market is mixed this afternoon, as traders digest falling oil prices and the latest Fed meeting minutes, which signaled support for a June rate hike. Among individual stock movers today, drug name Clementia Pharmaceuticals Inc (NASDAQ:CMTA) is gapping lower, while fellow pharma concern KemPharm Inc (NASDAQ:KMPH) and jewelry retailer Tiffany & Co. (NYSE:TIF) are surging. Here's a closer look at how the shares of CMTA, KMPH, and TIF are trading today.

Drug Trial Uncertainty Buries Clementia Stock

Clementia stock was higher in early trading after the company reported data for palovarotene, its treatment for a rare bone disease. However, the shares have since swung 19% lower to trade at $15.80 -- one of the worst stocks on the Nasdaq today -- after it was revealed data from one patient was excluded from the results. CMTA stock is on track for its worst single-day loss ever, and is now trading back below its year-to-date breakeven level. 

Analysts have yet to weigh in on the stock amid today's bear gap -- though downgrades and price-target cuts could be on the horizon. All five of the brokerages covering CMTA rate it a "buy" or "strong buy," and its average 12-month price target of $26.60 is a 75% premium to the stock's current perch.

ADHD Drug Optimism Lifts KemPharm Stock

KemPharm stock is up 8.2% to trade at $6.60, after Janney initiated coverage on the biotech with a "buy" rating and $17 price target -- territory not seen since May 2016. The analyst in coverage believes the company's upcoming ADHD treatment will be a "transformative catalyst." KMPH stock has added 64% in 2018, and hit a two-year high of $8.40 on March 21. The shares abruptly pulled back from there, although the dip was contained by the $4.80 level, which has served as a floor since January. 

Earnings Beat Sends TIF Stock to New Record High

Tiffany stock is up 22% to trade at $124.88 -- fresh off a new record high of $125.50, and the on track for its best day since early 2001 -- after the upscale jeweler reported first-quarter earnings and revenue that handily surpassed analyst expectations. The company also raised its full-year forecast and announced a new $1 billion share buyback program. In response, Cowen and Jefferies issued price-target hikes to $140 and $130, respectively.

It looks like options traders were bracing for a post-earnings pullback. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TIF's 10-day put/call volume ratio of 1.24 ranks in the elevated 73rd annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.

Shifting gears to today, options volume has exploded -- with puts and calls running neck and neck. Almost 36,000 total options have changed hands, nearly 17 times the intraday rate and volume pacing in the 99th annual percentile. The most popular is the June 125 call, where new positions are being opened.

 

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