Underperforming Groupon Stock Slides Ahead of Earnings

Groupon Inc (NASDAQ:GRPN) is getting ready to post first-quarter earnings after the close on Monday, May 9. GRPN has a mixed history of post-earnings reactions, given it finished four of the last these eight next-day session higher, and was lower for the other four, with fairly large moves in either direction. The security has averaged a next-day 16.3% swing in the last two years, though this time the options pits are pricing in a slightly larger 18.4% move. 

GRPN hasn't been faring well on the charts, down 65.2% year-over-year, while pressure at the 60-day moving average is capping the shares. Today, the security is down 8.4% to trade at $16.97.

Shot sellers have been piling on Groupon stock. The 4.26 million shares sold short account for a hefty 20.4% of its available float, or over three days' worth of pent-up buying power.

I's worth pointing out that GRPN ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 22 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making it a potential premium-selling candidate. 

The manufacturing industry was one of the hardest hits in 2020. In the initial months of the coronavirus pandemic, many companies were forced to shutter operations. However, opportunistic investors kept their eye on several of these companies as recovery stocks. And at the beginning of 2021, the emergence of several vaccines allowed businesses to reopen.  Not surprisingly, manufacturing stocks were among the biggest winners.

But where are these stocks headed in 2022? In December, American manufacturers reported their slowest pace of growth in 11 months. A closely followed index of U.S.-based manufacturers dropped to 58.7% in the final month of 2021. This was slightly lower than the 61.1% in November according to the Institute for Supply Management.

Still, any number of above 50% signals expansion. And the number is only slightly below the 60% level that signifies exceptional growth.

Ironically, it’s the virus that continues to provide a headwind. Supply chains are unwinding but not nearly fast enough to prevent material shortages. The controversy surrounding vaccine mandates is causing labor shortages.

However, there’s a strong likelihood that manufacturing stocks will have a strong year in 2022. And even if they don’t, many of these stocks pay a reliable dividend. That’s why we’ve put together this special presentation on the manufacturing stocks that will overcome current difficulties.