2014-06-23 Smart Money Report (MU) (SONC)
Smart Money Report
- AMAT- A rollout from 17,000 Jan. 2015 $20 calls (credit) into 28,000 Jan. 2015 $24 calls (debit). Volume was above the open interest in the Jan. 2015 $24 calls. The long-term uptrend remains intact, but is now at the highest level in the RSI on the weekly chart. A better entry would be near $21. Applied Materials trades at a P/E ratio of 17.05x (2015 estimates), PEG ratio of 0.68x (2015 estimates), 9% revenue growth, 1.75% dividend yield, and has an average analyst price target of $22.
- CTXS- 2,000 July $62.50 puts were sold for $0.55-$0.56 each, against open interest of 228 contracts. Earnings are due out on 7/23. This is a mildly bullish bet that Citrix Systems is stay above support at the $62-$63 level through July options expiration.
- MU- The June 27 weekly 1×2 $27/$30 put spread was put on 7,800 times for a $0.25 debit. Volume was above the open interest in both options. Earnings are due out tonight. Max gain on this trade (or hedge) is at $27 on Friday’s close. Profits trail off below $27. Micron Technology has moved lower after earnings on 5 out of the last 7 reports.
- SONC- Sizable buying in the July $22.50 and $25 calls today ahead of earnings tonight. The call to put ratio is 3:1. Call activity is 9x the average daily volume. Sonic has moved higher after earnings on four out of the last five reports.
- USB- 10,000 Jan. 2015 $44 calls were purchased for $1.60 each, against open interest of 872 contracts. Earnings are due out on 7/16. Shares of US Bancorp are starting to move above the $43.50 resistance level from March/April. It trades at a P/E ratio of 13.01x (2015 estimates) with 8.4% EPS growth, 5% revenue growth, 2.24% dividend yield, and has an average analyst price target of $44. On 5/14, Nomura initiated a buy rating with a $51 price target.
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