Options Trading Idea: Acquisitions Fueling Expedia’s Growth (EXPE)
This post was originally published on SeeItMarket.com
Earlier this month Expedia (EXPE) announced a $3.9B cash and stock deal for HomeAway. While it isn’t expected to be completed until the first quarter of 2016, the acquisition of the home vacation rental company puts them in a position to compete with the industry leader Airbnb. If it gets regulatory approval it would mean nearly $8B in deals in just two years for Expedia.
And this could mean upside for Expedia’s stock price near-term.
In September, Expedia closed their previously largest purchase of rival Orbitz for $1.6B. Trivago, Travelocity, Wotif are some other notable brands they’ve recently added to their portfolio to stay competitive with Priceline.com (PCLN).
Expedia stock (EXPE) trades at a P/E ratio of 20.02x (2016 estimates), price to sales ratio of 2.48x, and a price to book … Read More »
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 … Read More »
Smart Money Report
JNPR- Juniper Networks is set to announce Q1 earnings after the bell tonight. Analysts are looking for $0.29 in EPS and revenue of $1.2 billion. The options market is implying a $1.54 move, or 5.95%, in either direction through Friday’s close. Call to put ratio in (JNPR) options is currently 1.54, led by a buyer of 5,250 July $23/$29 bull risk reversals for a $0.03 debit. Shares of Juniper Networks have alternated from higher to lower closes after earnings for the past seven reports. If the pattern continues the stock will move lower tomorrow.
T- Another major earnings report that comes out tonight will be from AT&T. Analysts are looking for $0.70 in EPS and revenue of $32.4 billion. Option traders are pricing in a $0.91 move, or 2.51%, in either direction through Friday’s close. The put to call … Read More »