3 Companies Reporting Next Week, With Spikes in the Put/Call Ratio

Includes: KNL, MAT, WAFD
by: Kapitall

Earnings season kicks off shortly, and the options market can be an interesting source for good ideas.

Here we present 3 companies that are releasing earnings next week. These stocks have seen significant spikes in their put/call ratios within the last ten trading days.

Although this does indicate bearish sentiment, some view the put/call ratio as a contrarian indicator when it reaches extreme values. Thus, a contrarian investor may view these names as likely to turn around in the near future, and of course this could be amplified by any potential earnings surprise next week.

Do you think these names are positioned well for next week? Use this list as a starting-off point for your own analysis into potential plays from earnings season.

List sorted by increase in put/call ratio.

1. Washington Federal Inc. (WFSL): Savings & Loans Industry. Market cap of $1.95B. Earnings to be released on 4/11/11. Put/call ratio has increased 106.9% over the last ten trading days (from 0.72 to 1.49). The stock has lost 13.14% over the last year.

2. Knoll Inc. (NYSE:KNL)
: Business Equipment Industry. Market cap of $1.02B. Earnings to be released on 4/11/11. Put/call ratio has increased 24.3% over the last ten trading days (from 1.15 to 1.43). KNL is exhibiting strong upside momentum--currently trading 9.66% above its SMA20, 10.28% above its SMA50, and 34.02% above its SMA200. The stock has had a couple of great days, gaining 7.93% over the last week.

3. Mattel Inc. (NASDAQ:MAT): Toys & Games Industry. Market cap of $8.84B. Earnings to be released on 4/15/11. Put/call ratio has increased 22.7% over the last ten trading days (from 0.66 to 0.81). MAT offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.61%, current ratio at 2.39, and quick ratio at 2.05. The stock has gained 14.64% over the last year.

*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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