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. Upon his graduation, he worked as an investment banker... More
My blog:
Financial blog/advice
  • 7 Stocks With Unusual Options Activity To Examine Before Making Your Next Trade 0 comments
    Nov 14, 2011 5:20 PM | about stocks: HD, YHOO, BX, GM, CMCSK, CMCSA, AVP
    The Home Depot (NYSE: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. (NASDAQ: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. (NYSE: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 (NYSE: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 (NASDAQ: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 (NASDAQ: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 (NYSE: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.
    Themes: Options Stocks: HD, YHOO, BX, GM, CMCSK, CMCSA, AVP
Back To Brian Gorban's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
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.