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Options traders are positioning defensively in DAR with put demand jumping to its highest level in almost a year, while short sellers have been rapidly covering. Earnings land on 29 October.
The put-call ratio hit 0.5134 on 12 October, 3.5 standard deviations above its 20-day mean of 0.463. The 52-week high is 0.5297, so this reading sits close to the most defensive options positioning Darling Ingredients has seen all year. The move came in a single session, with the PCR sitting in a narrow 0.455 to 0.463 band for the previous two weeks.
JP Morgan's Thomas Palmer raised his price target to $83 on the same day, maintaining an Overweight rating. UBS lifted its target to $88 in late September. The consensus mean target stands at $81.67, well above the current price of $61.06. Yet options traders chose to buy downside protection at the same moment a major bank was hiking its target. That tension is the most interesting aspect of this snapshot.
Short interest has fallen 19.2% over the past week to 3.46% of free float. At that level it is not a dominant driver of price action, but the speed of the decline is notable. Short covering has been consistent through October, with shares short dropping from around 6.75 million to 5.48 million in the space of a few days.
The lending market remains extremely easy. Availability stands at 5,153% of current short interest, meaning there are more than 51 shares available to borrow for every one currently borrowed. The cost to borrow has risen 56% over the past week to 0.55%, but that is still a historically low absolute level. There is no sign of a borrow squeeze.
CEO Randall Stuewe sold 5,000 shares on 2 September at $68.20, following two prior sales in August at $63 to $65. The Chief Admin Officer sold 8,000 shares on 14 August. None of these trades were made under a pre-arranged 10b5-1 plan, which makes them discretionary. Net insider sales over the past 90 days total roughly $2.1 million.
The CEO sold at prices above where the stock trades today. That gap between the price insiders chose to sell at and the current price of $61.06 may be contributing to the cautious mood in the options market.
See the live data behind this article on ORTEX.
Open DAR on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
