2014-07-15 Smart Money Report (BAC) (INTC)
Smart Money Report
- BAC- Bank of America is set to release Q2 earnings before the bell tomorrow morning. Analysts are looking for $0.29 in EPS and revenue of $21.6 billion. The options market is implying a $0.48 move, or 3.06%, in either direction through Friday’s close. The call to put ratio is currently 2.06, led by a buyer of 6,732 Aug. 16 $15 calls for $0.94 each. Shares of Bank of America have moved higher after earnings on three out of the last four reports. On 7/7, Oppenheimer maintained an outperform rating, but raised their price target to $20 from $19.
- INTC- Intel is set to release Q2 earnings after the bell tonight. Analysts are looking for $0.52 in EPS and revenue of $13.7 billion. The options market is implying a $1.03 move, or 3.28%, in either direction through Friday’s close. The call to put ratio is currently 1.87. From 7/3-7/11 there was large buying in the July 19 $32 and Oct. $34 calls. Shares of Intel have fallen after earnings on four out the last seven reports. Both Citigroup (7/15) and Imperial Capital (7/14) initiated the stock with an outperform rating and have a $37 price target.
- KERX- The Dec. $10/$20 bear risk reversal (collar) was put on 7,000 times for a $0.00 debit. Volume was above the open interest in both options. They sold the $20 calls and bought the $10 puts. They have protection or profits below $10 and upside potential to $20 if this is done against a long stock position.
- VLO- 4,500 Jan. 2015 $55 calls were bought for $2.41 each, against open interest of 10,389 contracts. The call to put ratio is over 2:1. Call activity is already at the daily average. Net call premium is +$1.3M vs. net put premium of +$762K. Last night (VLO) lowered Q2 EPS guidance from $1.37 to $1.10-$1.25. Despite the weak outlook, the stock has recovered from last night’s after-hours lows and remains above the 200-day SMA. (VLO) trades at a P/E ratio of 7.85x (2015 estimates) with 7.6% EPS growth (31.2% this year), 1.1% revenue growth (-12% this year), P/S ratio of 0.19x, P/B ratio of 1.34x, 2.02% dividend yield, and has an average analyst price target of $63. On 7/11, Macquarie lowered their price target from $69 to $62.
- XRT- Over 2,800 July 19 $85.50 puts were sold for $0.29-$0.31 each, against open interest of 807 contracts. The retail ETF is down for the 4th consecutive trading session, but has support at the 50-day EMA (currently $85.30).
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