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One of the strongest indicators I've come across in my close to 15 years of investing is analyzing option activity as I recently wrote about here. The simplest reason is that these are some of the most leveraged derivatives which means that if somebody has a strong conviction of a stock going higher, buying calls allows him or her to maximize investment dollars. Moreover, selling puts is another bullish indicator as an investor is willing to pick up shares at that strike price since he sees value at that level.

Let's analyze some stocks that experienced positive option activity Friday:

1) Molex (MOLX) had option volume surge over 900 percent above average by midday on Friday. About 3,500 November 22.50 puts were traded. The electronics components maker has compelling valuations though trading at 12.5x P/E, just over 1x P/S, and just under 4% dividend yield. I think if this were to come down to $20, translating to a 4% dividend yield, I'd be a buyer as the company has been great at raising dividends as well and with a payout ratio near 40%, that looks very likely to continue happening.

2) Freescale Semiconductor (FSL) by midday on Friday had option volume already over 800 percent above average. More than 5,000 March 10 puts have been traded. The company has fallen almost 50 percent since coming public again in May 2011, but I still don't see value as the firm lost $574 million over the last twelve months, has an almost negative $18/share book value with a dangerous amount of debt, and no real catalyst on the horizon. I'd rather own some semiconductor stocks that I discussed here.

3) Photronics (PLAB) had option volume explode over 700 percent above average by midday. About 2,000 December 5 puts were traded. This semiconductor-related company seems to have more value than FSL trading at .6x P/S and P/B, and a solid net cash position in excess of $40 million. The strong bearish put activity though has me pause, so I'd rate this a hold for now and reexamine to see if it holds the $5 level.

4) Big Lots (BIG) had option volume increase over 500 percent above average. About 3,000 January 40 calls were being traded. These deep out of the money calls shows strong optimism over the coming months of a big jump. The company's valuations looks compelling at just over 12x P/E, .5x P/S, and a strong return on equity of 25%. I think this discount retailer continues to do well in these tough economic times and is solid buy at these levels.

5) Usec (USU) had option volume well over 500 percent above average as well. The October and November 2.5 calls were being heavily traded. These significant out of the money calls signal bullishness, even as the stock gets hammered today. This uranium play seems to be in the value category now trading at a cheap .15x P/B, .1x P/S, and .25x enterprise value/revenue. However, the company continues to burn significant cash in this capital intensive business. At these levels, the company is a great speculative play, along with a biotechnology company I mentioned here, and only for the aggressive investor.

Rounding out the list,Sociedad Quimica y Minera de Chile (SQM) and Digital Realty (DLR) were also experiencing option volume approximately 500 percent above average as well at midday Friday. SQM's April 55 calls and April 45 puts were being heavily traded. The Chilean fertilizer maker looks expensive compared to peers trading at a 28x P/E and over 6.5x P/S. I wouldn't be a buyer at these levels. DLR has heavy volume in the October 60 calls. This REIT looks to have a solid return on assets of over 3.5% and return on equity over 6.5%. Its 5% dividend yield is very nice in this environment and looks secure with the company's focus on renting real estate to technology focused firm and high-quality tenants. I'd be holding here at $55.

Sources: Yahoo and OptionMonster Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 7 Stocks With Positive Option Activity On Friday