Q2 STOCKS TO BUY

Options Traders Pile On PBR Stock After CEO Resignation

A Stanford University collab has CODX stock on top of the Nasdaq today

Managing Editor
Jun 1, 2018 at 3:35 PM
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The Dow is roaring back to life today thanks to upbeat unemployment numbers. Among individual stocks making notable moves, drug stock Co-Diagnostics Inc (NASDAQ:CODX) is soaring, while oil name Petroleo Brasileiro (NYSE:PBR) and wireless telecommunications issue Intelsat SA (NYSE:I) are plummeting. Here's a closer look at how shares of CODX, PBR, and I are trading today.

Stanford Project Announcement Boosts CODX Stock

Co-Diagnostics stock is up an impressive 86% to trade at $5.41 -- the best stock on the Nasdaq today -- after it was reported the company's CoPrimer technology is being used in a research project for the Wang Group at Stanford University. CODX stock is on track to close above its 80-day moving average for the first time since mid-November, and is up more than 200% this week -- pacing for its best week in history. Nevertheless, the equity is still trading below its mid-July initial public offering (IPO) price of $6.

CEO Resignation Sinks PBR Stock

Earlier today, Petroleo Brasileiro CEO Pedro Parente resigned in the wake of a nationwide trucker strike that prompted to government to cut diesel prices, sending the Brazilian energy stock reeling. In response, JPMorgan Securities downgraded PBR stock to "neutral," and a Moody's analyst said the resignation will be credit-negative for Petrobras. At last check, the state-controlled oil stock is down 15.4% to trade at $10.04 -- the worst stock on the New York Stock Exchange (NYSE) -- and below its year-to-date breakeven level. PBR stock has now shed 42% since its May 16 three-year high of $17.20. 

Amid the equity's recent plunge, traders have been buying PBR puts at a rapid-fire rate. The security's 10-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 1.04, ranks in the 91st percentile of its annual range, meaning puts have been bought to open over calls at a quicker-than-usual clip.

Shifting gears to today, options volume has exploded. Nearly 300,000 PBR options have changed hands -- five times the average intraday amount, and pacing for an annual high. Leading the charge are the August and November 12 calls, with Trade-Alert pointing to a bearish calendar spread.

Morgan Stanley Bear Note Creates Intelsat Stock Pullback

Intelsat stock is down 5.2% to trade at $16.87, even after Morgan Stanley issued a price-target hike to $6 from $1. However, the new target represents a 66% discount to I stock's close of $17.85 on Thursday, and the analyst in coverage still sees challenges ahead for Intelsat, and believes optimism about the firm's wireless spectrum is priced in. Yesterday, the shares touched a new three-year high of $19.08, after a tweet from a U.S. telecom regulator bolstered hopes for the company's wireless spectrum holdings.

Despite the lower price action today, Intelsat stock has quintupled in the past year. Although the stock finds itself on the short-sale restricted (SSR) list today, plenty of short sellers are likely cheering the pullback. Short interest has more than tripled since April 1, and the 9.74 million shares sold short represents a hefty 30% of the security's total available float. 

 
 

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