A Look At Oil-Dri Corp's Volatile November Through Benzinga's Securities Lending Volatility Index

Benzinga’s Securities Lending Volatility Index (SLVX) Powered by Tidal Markets, is an indicator that forecasts stock market activity for broader indices and individual securities.

To demonstrate the use of the SLVX as a stock market indicator, take a look at how changes in the SLVX anticipated a -7.70% decline in Oil-Dri Corporation of America ODC by more than a week this past November. 

Oil-Dri Corporation of America develops, manufactures, and markets sorbent products in the United States and internationally. The company provides agricultural and horticultural products, including mineral-based absorbent products, as well as animal health and nutrition products for the livestock industry.

ODC has a history as a relatively volatile stock, fluctuating between $28 and $35 per share before the November move, with modest share price spikes occurring in April, July, and September. The overall performance of the stock has shown consistent resilience after each downturn in share price, with ODC posting year-to-date performance of 43.45%, outperforming the SP500 by almost 20 percentage points. 

Entering into November, SLVX values of ODC were relatively muted with volatility levels 50 bps above their 3Q19 average of 3.17—a present sign of share price tranquility. But as the early weeks of November rolled on, ODC volatility rapidly increased and the SLVX spiked over 3174%, signifying a decline in price was imminent. 

On the first day of our sample analysis, Wednesday, November 6, the SLVX registered a volatility rate of 3.20. As ODC began to descend in price on November 8, the SLVX jumped to 108.82.

Between November 6-15, Oil-Dri Corporation of America's stock dropped -7.70% over an eight-day stretch-a $2.92 per-share loss. Meanwhile, the SLVX saw the volatility of ODC both rally over 3174% to levels over 108, before falling in volatility as the share price of ODC quickly descended and plateaued off. 

As we continue to watch SLVX values of ODC into the latter parts of November, we’ve seen volatility values fluctuate at higher than usual levels. Unless the SLVX of ODC cools back to pre-November levels, expect to be on the lookout for future price fluctuations.