2015-02-02 Unusual Options Activity (ADSK) (AWAY)
Posted on February 2nd, by Mitchell Warren in Free Articles, Options Risk Management, Smart Money Report, Trade Ideas, Unusual Options Activity. Comments Off on 2015-02-02 Unusual Options Activity (ADSK) (AWAY)
Unusual Options Activity
- ADSK- More than 4,000 Feb $52.50 puts were sold for $0.69-$0.92 each, against open interest of 277 contracts (76% of puts have traded on the bid). The put to call ratio is 20:1 and put activity is 5x the average daily volume. AutoDesk shares are down 15% from the November 21st high of $63 and this morning’s large put seller is betting that the downside risk through February options expiration is minimal. The $12B 3D design software company trades at a P/E ratio of 40.10x (Jan 2016 estimates) with 14.5% EPS growth, price to sales ratio of 5.05x, and a price to book ratio of 5.42x. Revenue growth is likely to slow from 10% to 5% in the next year, but the company’s cloud based offerings have been able to bring in more subscribers quarter after quarter. While the 40x multiple is high, it is important to note that they have beat EPS estimates by $0.02-$0.11 in each of the last six quarters. The average analyst price target is $65.38 (1 sell rating, 3 hold ratings, 11 buy ratings).
- AWAY- Someone rolled down 2,200+ Feb $28 calls ($0.27 credit) into 2,200+ Feb $27 calls ($0.55 debit) this morning (Q4 earnings are due out on February 18th). Volume was above the open interest in the Feb $27 calls. The call to put ratio was 19:1 and call activity was more than 3x the average daily volume (implied volatility +8.5% to 50.56). HomeAway shares hit a 2-year low today, down 47% from the 2014 all-time high. This has brought down the forward PEG ratio to 1.79x (2015 estimates) with 18.5% revenue growth that will likely push total sales north of $500M this year. In the near-term the charts still look bearish, but a relief rally could put the stock back at $27-$28 soon. Nearly all Wall Street analysts have a price target north of $30 (average is $39.47) on the vacation rental online marketplace.
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