Seeking Alpha

Brian Gorban's  Instablog

Brian Gorban
Send Message
Brian Gorban has been an active investor for almost twenty years. Mr. Gorban is a graduate from the University of California, Berkeley in 2005 with a degree in Economics and minor in Business Administration from the Haas School of Business (Finance Focus). Upon his graduation, he worked as an... More
My blog:
Financial blog/advice
View Brian Gorban's Instablogs on:
  • 7 Stocks With Unusual Options Activity To Examine Before Making Your Next Trade
    The Home Depot (HD), together with its subsidiaries, operates as a home improvement retailer.  On Nov. 14, there was massive volume specifically with the Nov 39 calls trading almost 34,000 contracts against only 7,424 in open interest.  This is a very bullish buy ahead of their earnings report on Nov. 15 as they were bought aggressively and the stock looks attractive at a trailing 17x P/E, forward 14x P/E,  .9x P/S, 1x EV/S, and respectable 2.6% dividend yield.  I would follow this price action and buy the Nov 39 calls.

    Yahoo! Inc. (YHOO), together with its subsidiaries, operates as a digital media company that delivers personalized digital content and experiences through various devices worldwide.  There was bullish options activity on Nov. 14 with over 19,000 contracts changing hands on the Nov 17 calls specifically.  YHOO recently had bullish options activity here and I'd follow buyers here as only a speculative buy since YHOO is still decently priced at a trailing 19x P/E, forward 18x P/E, virtually no debt and over $1.50/share in net cash, and more credible sources discussing a buy-out any day now which would most likely provide a nice surge in the stock price and these options specifically.

    The Blackstone Group, L.P. (BX), together with its subsidiaries, provides alternative asset management and financial advisory services worldwide.  There was particularly strong options activity on the Jan 2013 15 calls trading almost 5,500 contracts.  They weren't bought aggressively though, so I wouldn't see it as bullish and BX looks a little overpriced to me at 1.7x P/B, 2.1x P/S, 4.7x EV/S, and losing over $150M in net income this past year. Moreover, BX cut its dividend in half earlier this year and with this ugly operating history, it wouldn't be a surprise to see it cut further.  I'd stay away from BX for now.

    General Motors (GM) operates as a global automaker or predominately cars and trucks.  There was particularly strong volume in the Nov 13 puts with well over 13,000 contracts changing hands. These weren't bought aggressively, so I wouldn't see it as bearish and GM has some very favorable metrics at a 5x trailing and forward P/E multiple, .4x PEG, .2x P/S, .1x EV/S, 1x P/B, and very strong $20B net cash position.  I'd be a buyer of GM in fact now and look at buying at the deep in the money Jan 2013 13 calls at $11.

    Comcast (CMCSK), together with its subsidiaries, provides entertainment, information, and communications products and services in the United States and internationally.  There was strong volume in the Dec 22 puts trading 6,004 contracts against only 723 in open interest.  This look to be a bullish sale as the investor sold them aggressively and seems to like an entry price at $22. The company has reasonable valuations at 16x trailing P/E, 12x forward P/E, 1.2x P/S, 1.3x P/B, and consistently growing 2% dividend yield.  I think selling these puts are a great idea or selling Comcast (CMCSA) class A shares at the same Dec 22 puts at $.80/share offers a nice alternative as well as CMCSA has four times the liquidity of CMCSK's common stock while offering the same dividend and valuations.

    Avon Products (AVP) engages in manufacturing and marketing beauty and related products in worldwide. There was very strong activity in the Dec 16 puts trading 17,434 contracts against only 383 in open interest. This look to be in fact bullish since these were sold aggressively and the investor seems to believe that $16 is a nice entry point. AVP looks attractively priced at 10x forward and trailing P/E, .7x P/S, .9x EV/S, 6.6x EV/EBITDA, and consistently growing 5.2% dividend.  I think AVP makes for a buy at these levels and at $16 AVP would have a very nice 5.8% yield.  I'd follow suit and sell these Dec 16 puts.





    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Tags: HD, YHOO, BX, GM, CMCSK, CMCSA, AVP, Options
    Nov 14 5:20 PM | Link | Comment!
  • Look at the Options Activity here before making your trade
     There are many indicators I use when analyzing a stock. One indicator I look for are relatively cheap dividend stocks. Another strong indicator is insider activity in stocks, such as the ones described here. Finally, another indicator is looking at unusual option activity, as I recently brought up here, while some on Nov. 9 caught my eye below. Again, unusual option activity always catches my attention since options are generally a strong indicator to future movement as they provide great leverage for an investor.

    Microsoft (MSFT) develops, licenses, and supports a range of software products and services for various computing devices worldwide. It had abnormal options activity again on Nov. 9, after I recently wrote about it here, with the Nov 27 having a massive 52,307 contracts trading hands.  The contracts were not being bought aggressively though so I wouldn't say this is bullish, however the fundamentals of MSFT still remain strong at trailing 9.5x P/E, forward 8.5x P/E, .8x PEG, over $40B in net cash, and 3.1% dividend.  I think with such a nice yield, MSFT is great as a covered call with the Jan 2013 27 selling for a nice $2.40 premium, while you collect the dividend.

    Citigroup (C), a global financial services company, provides consumers, corporations, governments, and institutions with a range of financial products and services.  The stock got hammered over 8% on Nov. 9 and there was particularly strong volume on Nov. 9 in the Nov 34 trading 13,782 contracts against only 14,704 in open interest.  The contracts weren't being bought aggressively so I wouldn't see it as bullish, moreover I don't see a strong catalyst for C to shoot up 20% by Nov. 18 as these contracts are betting on.  I think if one is bullish on C, the Jan 34 puts selling at $6.40 allow you to take advantage of these sizeable premiums while benefiting if C were to rise from here.

    3M Company (MMM), together with subsidiaries, operates as a diversified technology company worldwide.   There was strong volume on Nov. 9 in the Nov 82.5 calls trading 5,510 contracts against just 4,020 in open interest and the Nov 80 puts had 8,783 contracts trading higher against only 2,226 in open interest.  I wouldn't make much of this action as it's hard to see and moreover MMM seems to just be a victim of the market sell-off. Moreover, it has great fundamentals at a trailing 13.4x P/E, 12.5x forward P/E, 1x PEG, over $4B in FCF this past year, and respectable 2.8% yield.  I'd look to either have this as a covered call or deep in the money call as I'm more bullish than bearish on MMM.

    Janus Capital Group (JNS) is a publicly owned asset management holding company.  There was a massive 20,183 Dec 6 puts being bought aggresively against only 2,077 in open interest showing strong bearishness on Nov. 9.  The market volatility is most likely a negative for their funds as people tend to withdraw money during these times, and their projected to have declining earnings going from a trailing 6.5x P/E to over 10x.  I think I'd follow this bearishness and look to buy the Dec 6 puts as a hedge if anything against my other long positions.

    Jefferies Group (JEF), together with its subsidiaries, operates as a securities and investment banking company.  There was massive volume in the deep out of the money Dec 6 put options trading over 22,000 contracts on Nov. 9.  JEF has been getting clobbered of late due to their European bond exposure and until that clears, expect more volatility.  I wouldn't be short though as the great investment minds of Leucadia own approximately 30% and definitely have the financial muscle to buyout the remaining 70% if JEF keeps getting cheaper.













    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Tags: MSFT, C, MMM, JNS, JEF, Options
    Nov 09 8:55 PM | Link | Comment!
  • Any idea when the Greek contagion will come to an end?
    Amazing how this has been going on for months now and seems to have no resolution.  Anybody think the market will skyrocket on ANY plan as a big uncertainty will have been cleared or just a precursor to bigger problems with the PIIGS?
    Tags: NBG
    Oct 20 12:23 PM | Link | 2 Comments
Full index of posts »
Latest Followers

StockTalks

  • Is There Money Still To Be Made In 3D Printing In 2014? http://seekingalpha.com/a/15luj
    Jan 13, 2014
  • What's your top stock for 2014?
    Jan 7, 2014
  • Happy 2014 everyone!
    Jan 2, 2014
More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.