2014-08-22 Smart Money Report (DRI) (EGN)

Posted on August 22nd, by Mitchell Warren in Free Articles, Options Risk Management, Smart Money Report, Unusual Options Activity. Comments Off on 2014-08-22 Smart Money Report (DRI) (EGN)

Smart Money Report

  1. DRI- The Jan 2015 $43/$50 bull risk reversal was put on 3,500 times for a $0.15 debit. Volume was above the open interest in both options. Darden Restaurants has earnings due out on 9/12. Clarence Otis (CEO) will step down by the end of the year. Starboard Value (activist investor) is trying to replace the 12 person board (already have 3 seats on the board).
  2. EGN- 2,000 Oct $80 calls were bought for $1.70 each, against open interest of 78 contracts. The call to put ratio is 173:1. Call activity is 29x the average daily volume. Energen trades at a P/E ratio of 24.40x (2015 estimates) with 14.7% EPS growth (-9% this year), 11.2% revenue growth (-12.3% this year), P/S ratio of 3.08x, P/B ratio of 1.91x, 0.79% dividend yield, and has an average analyst price target of $101.73. On 8/4, Canaccord Genuity lowered their price target to $110 from $128. One major negative is that 2014 EPS estimates continue to decline ($2.72 from $2.95 3 months ago).
  3. HLF- A rollout from 28,000 Jan 2015 $50 puts (credit) into 32,200 Jan 2016 $50 puts (debit). Volume was above the open interest in the Jan 2016 $50 puts. The put to call ratio in Herbalife is 17:1. Put activity is over 4x the average daily volume.
  4. SNI- Nearly 900 Dec $80 calls were bought for $5.10 each, against open interest of 70 contracts. Typically trades 192 calls per day.
  5. VMC- 3,000 Feb 2015 $70 calls were bought for $2.45-$2.50 each, against open interest of 63 contracts. 7,335 sets in open interest in the Nov $65 calls from large buying on 8/11 and 8/18.

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