Is Iron Mountain (IRM) on the Downslope?
by Houghton and Atkeson 09/23/08
One would think helping companies store and discard document safely would hold up pretty well in a slowing economy, but the stock of Iron Mountain (IRM) is down 30% year-to-date, almost two times worse than the averages. Maybe having Warren Buffett reduce his position is adding fuel to the fire.
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This morning, Iron Mountain options have traded 43 times usual volume and 30% of open interest. In particular, market participants have traded 3,000 IRM Jan 25 Puts (IRMME) and Jan 20 Puts (ZIYMD) in what looks like a put spread.
The stock has bounced off the $24 level three times this year, and maybe the fourth time won't be the charm.
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Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
Watching the Treasury's Actions
In the short-term, the government's bond auction is likely to be a key driver of stocks.
Treasury Auction Boosts Market
The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.
Credit Markets Point to Upturn
The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
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