Why LinkedIn Stock (LNKD) Looks Poised To Rally

Following a disastrous revenue outlook in February, LinkedIn Corp (LNKD) reported Q1 results on April 29th that topped Wall Street estimates, soaring 35% on year over year basis to $861M.

The business-oriented social media company trades at a forward P/E ratio of 30.91x (2017 estimates), price to sales ratio of 5.37x, and a price to book ratio of 3.74x. Given the steady annual earnings growth in the 20% to 25% range, paying just over 30x EPS isn’t outrageous for the $15B company.

At 105.5M monthly active users, LinkedIn falls short of Twitter’s 310M and Facebook’s massive 1.65B user base. However, on a revenue/user ratio, LinkedIn’s $28.30 generated per user is quadruple that of Twitter and is well above the $10.80/user that Facebook (the largest social media company) is bringing in on the top line.

Their Talent Solutions segment is leading the company … Read More »

Options Report

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Unusual Options Activity

Barnes & Noble (BKS)- The Sep $24/$26/$30 bull call spread risk reversal was put on 1,840 times for a $0.55 debit. A trade like this one involves buying the Sep $26/$30 bull call spread and selling the Sep $24 puts for even smaller debit (requires margin). Harper Lee’s “Go Set A Watchman” set a one day sales record recently.
Mondelez International (MDLZ)- There was a rollout from 6,000 Sep $42 calls ($3.40 credit) into 9,000 Sep $45 calls ($1.35 debit). They raised FY15 guidance and reaffirmed FY16 margin guidance. The company also authorized a $6B share repurchase program.
Newfield Exploration (NFX)- Roughly 1,750+ Sep $30 puts were bought for $1.15-$1.25, against open interest of 1,723 contracts. There was a big Aug 21 $31 put buyer yesterday. Earnings are due out on August 4th.
Twitter (TWTR)- Another 5,595 Jan 2017 $35 calls … Read More »

Unusual Options Activity

American Express (AXP)- There was a rollout from 3,260 July 31 $76 puts ($1.64 credit) into 3,260 July 31 weekly $74 puts ($0.55 debit). On July 22nd, they reported a 4% drop in Q2 revenue (worse than expected). The strong dollar is partially responsible for the weakness.
Ball Corp (BLL)- 2,428 Feb 2016 $72.50 calls were purchased for $2.60 and 2,428 Sep $62.50 puts were sold for $0.90-$0.95. Over 12,000 remain in open interest in the Feb $72.50 calls from buying in recent months. They are trying to acquire Rexam (would combine the two largest can makers in the world), but there are still regulatory hurdles to overcome. Earnings are due out on July 30th.
Caterpillar (CAT)- There was a rollout from 4,000 Aug 21 $76 puts ($2.00 credit) into 6,000 Sep 18 $70 puts ($0.81 credit). On July 23rd, … Read More »

Options Report

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Social Media Stocks Sector Analysis: FB, TWTR, LNKD, IACI, WB

This was originally published on See It Market on June 2nd

In this post I want to take an intermediate-term and longer-term look at the charts of five social media stocks. The first three that I will look at are household names that you hear about ton a dailybasis (and probably use on personal level as well): Facebook (FB), Twitter (TWTR), and LinkedIn (LNKD). But stocks like IAC/InterActiveCorp (IACI) and Weibo (WB) are smaller companies in the sector that are worth paying attention to – both social media stocks have big growth potential.

IACI is the $6B owner of dating sites like Match, OkCupid, and Tinder. They also operate in search via About.com, Ask, Dictionary.com, and Investopedia. As well, they own the popular video-sharing subscription service called Vimeo.

Then there is Weibo, a $3B … Read More »

ORM Market Commentary
Is The Rally In Twitter Over?

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Smart Money Report

DE- Another 2,500 Oct 18 $82.50 puts were purchased for $1.89 each, against open interest of 10,571 contracts. There was big buying in these Deere puts yesterday.
LNG- A rollout from 19,000 Oct 18 $80 calls (credit) into 19,000 Oct 18 $85 calls (debit). Volume was above the open interest in the $85 calls. Cheniere Energy shares have remained strong in a nice uptrend (has been above 70 RSI for most of the year).
MRVL- Another 1,500 Nov $15 calls were bought for $0.39 each, against open interest of 15,955 contracts. 3,000 were bought for $0.39 each yesterday as well.
TWTR- A rollout from 7,000 Jan 2015 $45 calls (credit) into 10,000 Jan 2015 $52.50 calls (debit). Volume was above the open interest in the Jan 2015 $52.50 calls. The call to put ratio in Twitter was 3:1.
WLT- 50,000 Jan 2016 $2 … Read More »

Unusual Options Activity

In today’s Unusual Options Activity Report we highlight call buying in Marvell Technology Group (MRVL) and a call rollout in Twitter (TWTR).

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Smart Money Report

IYR- 10k May 30 weekly $70 puts were bought for $0.25-$0.26 each, against open interest of 37 contracts.The real estate ETF is set to close at a new high today with RSI overbought at 74+. This is likely a hedge against an existing long position.
TWTR- A rollout from 4k May 17 $34 calls (credit) into 4k May 23 weekly $33 calls (debit). Volume was above the open interest in the May 23 weekly $33 calls. Twitter has near-term upside potential to $36-$37 (gap fill). Current support is at $29.50.
VGR- More than 2,000 Aug. $22.50 calls were purchased for $0.48-$0.55 each this morning, against open interest of 1,199 contracts. Earnings are due out tonight. Implied volatility rose 13% to 34.31 with call activity over 5x the average daily volume. The stock has moved higher after earnings on three straight … Read More »

 Unusual Options Activity

In today’s Unusual Options Activity Report we highlight a call rollout in Twitter (TWTR) and call buying in the Volatility Index (VIX).

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Smart Money Report

BEAV- The May $100/$105 call spread was put on 3,300 times for a $1.20 debit. Volume was below the open interest in both options. There has been bullish activity in B/E Aerospace all week, following the intention to sell or breakup the company on Sunday.
NQ- More than 5,000 May $13 calls have traded today with majority being purchased for $0.70-$0.80 each, against open interest of 5,282 contracts. Earnings are due out on 5/15.
RSH- 15,000 Jan. 2016 $1.50 calls were purchased for $0.35 each, against open interest of 6,426 contracts. The call to put ratio is 6:1. On average, 7,752 calls trade per day.
TWTR- The Sep. $27/$35 bull risk reversal was put on 2,500 times for a $1.00 debit. Volume was above the open interest in both options. He/she is betting on Twitter shares being above $36 on September … Read More »

Smart Money Report

TWTR- Twitter is set to announce Q1 earnings after the bell tonight. Analysts are looking for -$0.03 in EPS and revenue of $241 million. The options market is implying a $5.65 move, or 13.42%, in either direction through Friday’s close. Call to put ratio in (TWTR) options is currently 1.40, led by activity in the May 17 $50 and $52.50 calls. The stock dropped 24.16% the day after releasing it’s first earnings report back on 2/5.
X- Another notable earnings release due out tonight will come from U.S. Steel. Analysts are looking for $0.32 in EPS and revenue of $4.5 billion. Option traders are pricing in a $1.22 move, or 4.64%, in either direction through Friday’s close. The call to put ratio in (X) options is currently … Read More »

Smart Money Report

JNJ- Johnson & Johnson is set to announce Q1 earnings before the bell tomorrow morning. Analysts are looking for $1.48 in EPS and revenue of $18 billion. The options market is implying a $1.90 move, or 1.96%, in either direction through Friday’s close. Call to put ratio in (JNJ) options is currently 1.26, led by activity in the Apr. 19 $97.50 calls. The stock has only declined after earnings on one out of the last four reports.
KO- Another notable report due out tomorrow morning will come from Coca-Cola. Analysts are looking for $0.44 in EPS and revenue of $10.6 billion. Option traders are pricing in a $0.81 move, or 2.10%, in either direction through Friday’s close. The call to put ratio in (KO) options is currently 1.89, led by a buyer of 2,200 June $39 calls and 2,000 Aug. $41 calls. … Read More »

Smart Money Report

EJ- E-House (China) Holdings is set to announce Q4 earnings before the bell tomorrow morning. Analysts are looking for $0.22 in EPS and revenue of $223 million. Option traders are pricing in a $2.55 move, or 16.49%, in either direction through Mar. options expiration. The call to put ratio in (EJ) options is currently 1.79, led by buying in the Apr. 2014 $19 calls. The stock has gapped higher on the previous three earnings reports.
AKS- 10k June $6 puts were purchased for $0.66-$0.70 each, against open interest of 1,183 contracts. The middle Bollinger Band (20-day SMA) has acted as resistance over the past two months.
DAN- The Mar/Apr $22 call calendar was put on 2,200 times for a $0.49 debit. Volume was above the open interest in both options. They sold the Mar. $22 calls and bought the Apr. $22 calls, … Read More »

Smart Money Report

RSH- RadioShack will report Q4 earnings before the bell tomorrow morning. Analysts are looking for -$0.14 in EPS and revenue of $1.1 billion. The options market is implying a $0.67 move, or 25.00%, in either direction through Mar. options expiration. Call to put ratio in (RSH) options is currently 1.66. The stock has fallen on the previous three earnings reports.
VIPS- Vipshop is set to announce Q4 earnings after the bell tonight. Analysts are looking for $0.41 in EPS and revenue of $559 million. Option traders are pricing in a $19.35 move, or 15.74%, in either direction through Mar. options expiration. The put to call ratio in (VIPS) options is 1.53, led by a seller of 350 Apr. $100 puts for $3.00 each.
BYD- Roughly 6k Mar. $12 calls were purchased for $0.35-$0.40 each, against open interest of 6,563 contracts. … Read More »

Smart Money Report

FSLR- First Solar is set to announce Q4 earnings after the bell. Analysts are looking for $0.98 in EPS and revenue of $961 million. The options market is implying a $5.75 move, or 10.11%, in either direction through Friday’s close. Call to put ratio in (FSLR) options is currently 1.28, led by activity in the Feb. 28 weekly $65, $70, and Mar. 22 $65 calls. The stock has declined after earnings on 4 out of the last 5 quarters.
LOW- Lowe’s will report Q4 earnings below the bell tomorrow morning. Analysts are looking for $0.32 in EPS and revenue of $11.7 billion. Option traders are pricing in a $2.03 move, or 4.22%, in either direction through Friday’s close. The call to put ratio in (LOW) options is 1.74, led by a buyer of 2k Feb. 28 weekly $48 puts, … Read More »

Smart Money Report

CSCO- Cisco Systems is set to announce Q2 earnings after the bell tonight. Analysts are looking for $0.46 in EPS and revenue of $11 billion. The options market is implying a $1.37 move, or 6.00%, in either direction through Friday’s close. Call to put ratio in (CSCO) is currently 1.28, led by a seller of 8,500 Jan. 2015 $25 calls for $0.96 each and buyer of 5k July $24 calls for $0.72 each.
WFM- Whole Foods Market will also releasing earnings after the bell tonight. Analysts are looking for $0.44 in EPS and revenue of $4.3 billion. Option traders are pricing in a $4.00 move, or 7.20%, in either direction through Friday’s close. The call to put ratio in (WFM) options is 1.02.
CTRX- Over 2k July $52.50 calls were purchased for up to $3.29 each, against open interest of … Read More »

 Free Trade of the Day
Twitter (TWTR)

Updates: Community Health Systems (CYH) shares snapped a three day losing streak today, rising 3.59%.

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Smart Money Report

AOL- AOL will report Q4 earnings before the bell tomorrow morning. Analysts are looking for $0.48 in EPS and revenue of $655 million. The options market is implying a $5.70 move, or 11.88%, in either direction through February options expiration. Call to put ratio in (AOL) options is currently 1.99. In recent months, call activity has been largely bullish led by heavy buying in the Apr. 2014 and July 2014 upside calls.
TWTR- Twitter is set to announce Q4 earnings after the bell tonight. Analysts are looking for -$0.02 in EPS and revenue of $217 million. Option traders are pricing in a $10.00 move, or 15.06%, in either direction through Friday’s close. The call to put ratio in (TWTR) options is 1.70.
AMBC- 4,878 Jan. 2015 $30 calls were bought for $1.85 each, against open interest of 822 contracts. Earnings are … Read More »