Schaeffer’s Volatility Scorecard (SVS) is a lagging index that measures a stock’s realized volatility from the volatility expectations packed to that stock’s choices over the last year. The target is to find which stocks are the very best — and worst — for most top buyers. The SVS is a really beneficial instrument for premium vendors also, as “the worst” to get a premium buyer could be redeemed as “the best” to get a premium vendor.
Utilizing our strong historical databasewe conduct extensive research on every underlying equity and ascertain which of these underlying equities’ choices have had underpriced or overpriced alternatives. We rate each equity’s choices relative to others in our world, with scores ranging from zero to 100. To learn more about the best way best to use those scores, please examine directions after the scorecard.
Below is a deeper dip to three stocks that showed up on our included listing; obligations processing pro Square Inc (NYSE:SQ), clean energy stock Enphase Energy Inc (NASDAQ:ENPH), and meals delivery service GrubHub Inc (NYSE:GRUB).
What’s the uniting thread between those 3 exceptional stocks? At this time SQ, ENPH, and GRUB all boast SVS’ of all 98, 100, also 96, respectively. In simpler terms, all three stocks have tended to transcend alternative traders’ volatility expectations throughout the last calendar year, a fantastic thing for alternative buyers.
At last check, SQ was up 3.4% to trade in $127.75, a chip-shot in the July 9 record high in $133.81. The shares have nearly quadrupled off their March 18 lows of $32.33, also have more than doubled in 2020. During this channel of higher highs, the ascending equity’s 20-day moving average has stepped up as admirable support.
A short squeeze could be fueling these gains. Short interest fell 13.8% the two most recent reporting periods, yet still accounts for a healthy 8.2% of SQ’s total available float. The security could also benefit from a shift in analyst sentiment, as 22 of the 35 in coverage still rate it a “hold” or worse.
Switching over to ENPH, the California-based solar energy name was last seen up 3.6% at $59.32. Like Square, Enphase stock has also more than doubled in 2020, but remains way off its May 19 record high of $70.36.
Enphase shorts are headed for the exits, down 5.7% in the two most recent reporting periods. Yet that 11.63 million shares sold brief still take up 10.1% of ENPH’s total available float, so a continued exodus of bearish bets may keep the wind at the equity’s back.
And lastly there’s GrubHub stock, which at last check was up 1.4% at $71.06. GRUB is up 109% at those last nine months, with its 30-day moving average containing the last month’s consolidation on the charts.
Now looks like a good time to get on GrubHub with options, too. Despite its own July 30 earnings report, GRUB’s Schaeffer’s Volatility Index (SVI) in 50% ranks in the 10th percentile of its annual range. This suggests options players have been pricing in relatively low volatility expectations of late.
SQ shares rose $1.12 (+0.87%) in after-hours trading Thursday. Year-to-date, SQ has gained 106.41%, versus a 1.69% rise in the benchmark S&P 500 index during the same period.
About the Author: Bernie SchaefferBernie Schaeffer is the founder, chairman, and CEO of Schaeffer’s Investment Research, the leading provider of research and analysis on the stock and options market. Schaeffer founded the company in 1981 using a single alternatives newsletter and the product offerings have grown to nearly 25 different options trading real-time alert services and newsletters over the past 40 years. More…More Resources for the Stocks from this Report