Next week will see a lot of companies reporting their Q1 earnings. One way to sort through the names is by looking at their put/call ratios to find those with excessively bearish sentiment. Those companies might be in the right position for an earnings surprise.
With this in mind, we ran a screen on next week’s reporting companies for those that have seen significant increases in their put/call ratio over the last two weeks, to the upper end of their annual put/call range. This indicates very bearish options market sentiment.
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We also created an equal weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think these names could surprise us all? Use this list as a starting point for your own analysis.
List sorted by increase in put/call ratio.
1. Monro Muffler Brake Inc. (MNRO): Auto Parts Industry. Market cap of $945.12M. Earnings to be released on 5/17. Put/Call ratio has increased 119.18% over the last ten trading days (from 0.73 to 1.6, currently placed at 87% of its annual p/c range). The stock is a short squeeze candidate, with a short float at 11.88% (equivalent to 10.64 days of average volume).
?2. Dick's Sporting Goods Inc. (DKS): Sporting Goods Stores Industry. Market cap of $5.02B. Earnings to be released on 5/16. Put/Call ratio has increased 53.70% over the last ten trading days (from 1.08 to 1.66, currently placed at 97% of its annual p/c range). The stock has gained 43.83% over the last year.
??3. Urban Outfitters Inc. (URBN): Apparel Stores Industry. Market cap of $5.34B. Earnings to be released on 5/16. Put/Call ratio has increased 41.30% over the last ten trading days (from 0.92 to 1.3, currently placed at 80% of its annual p/c range). The stock has lost 15.16% over the last year. ??
4. The Children's Place Retail Stores, Inc. (PLCE): Apparel Stores Industry. Market cap of $1.41B. Earnings to be released on 5/19. Put/Call ratio has increased 9.78% over the last ten trading days (from 0.92 to 1.01, currently placed at 94% of its annual p/c range). The stock is a short squeeze candidate, with a short float at 17.82% (equivalent to 7.11 days of average volume). The stock has gained 22.08% over the last year. ??
5. Red Robin Gourmet Burgers Inc. (RRGB): Restaurants Industry. Market cap of $429.01M. Earnings to be released on 5/19. Put/Call ratio has increased 9.68% over the last ten trading days (from 0.93 to 1.02, currently placed at 98% of its annual p/c range). The stock is a short squeeze candidate, with a short float at 16.95% (equivalent to 10.5 days of average volume).
*Options data sourced from Schaeffer’s, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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