ARTICLES

Changing news cycle and future valuation point to buying opportunity now. Investing can often come down to cycles. Most assets move in them, swinging between being in favor with the market and becoming overbought, or swinging out of favor and becoming oversold. Right now, cannabis stocks are still out of favor with the market. They’ll swing back in favor in time, but a few short-term fears are weighing on the price. However, there are some early indications that the turn is starting. It may be time to add to your preferred holdings in the space as a result. There are two main factors ...
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Bet on double-digit drop by year-end. The December 20th $30 put options on Kontoor Brands (KTB) saw nearly 15,000 contracts trade recently, a 90-fold explosion in volume from the prior open interest of 166 contracts and a huge sign of confidence for a drop. The bet implies about a 20 percent downside for shares from their current price of $36.00 before year-end. With a price of just $0.53, or $53 per contract, the option has the potential for a huge move if shares drop. Kontoor Brands, which designs and manufactures apparel products under the Wrangler and Lee brands, was recently spun off from ...
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Director makes $1.4 million buy. Walter Loewenbaum picked up 81,657 shares at Luminex Corporation (LMNX), where he serves as a director. Shelling out just under $1.47 million, the buy increases his stake by just 4.1 percent. This is the second insider buy this year following a 5,000-share pickup by the CEO in August. Insider data shows large selling activity from 2018 to 2018, followed by a lull with no activity before the current insider buying. This shift may indicate that management has gone from seeing shares overvalued to undervalued, which also matches the share price move from the $30 ...
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New CEO makes $500,000 buy. The new CEO of McDonald’s, who previously owned zero shares in the firm, picked up 2,580 in his first week on the job. The total cost came to $500,000, and was made on the open market as a vote of confidence in the company. A director at the company also made a 1,300 share buy at $194,000. Insider data for the past three years shows this is the first insider buy since 2017; all other insider activity has been sales. Shares of McDonald’s fell following the ouster of its prior CEO for an inappropriate ...
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Share buybacks put a floor under shares, making for more likely profits. Companies have a number of options for providing their shareholders with a profit from the business. While most investors focus on dividends, or cash payments from the business, many companies have embraced share buybacks as well. The biggest reason is that it’s a more tax-efficient way to boost shareholder returns relative to dividend payments. Companies can buy back shares with their post-tax profits, whereas dividends are taxed as earnings and then again at the shareholder level. Share buybacks also allow companies to improve their earnings per share by reducing their share ...
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Bet on shares moving higher after earnings beat. The April 2020 $105 call option on Qualcomm (QCOM) saw a seven-fold surge in trading from 100 call options to over 700 calls trade. The move comes after the company beat earnings and shares hit a new 52-week high, topping $90 per share. The option is a bet on another $15 rally in shares, or another 16.7 percent higher in the next six months. At a price of $1.80 per option or $180 per contract, shares would need to close around $107 for the trade to be in-the-money in April. Given ...
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Bet on further rally in shares. The June 2020 $205 call options on Alibaba Group (BABA) saw over 5,200 contracts trade, a 7-fold surge in volume. The trader is betting that shares, currently around $187, will rally about 9.6 percent higher in the next 224 days—a solid bet if some of the trade war truce headlines prove true this time. Based on the price paid by the trader of $12 per contract, they’ll make a profit if shares are at least $217 come expiration. With shares trading only as high as $196 in the past year, it’s a bet ...
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CEO, directors buy after earnings period lockup. The CEO of Chesapeake Energy (CHK), Robert Meyer, made a 50,000 share buy after the company reported poor earnings in the third quarter and the insider trading lockout period for the shares expired. That increased his holdings by 1 percent. He was joined by director Brad Martin, who bought 250,000 shares as well—a 24 percent increase in the director’s stake. Insider data shows that other insiders have been bullish this year, and one major fund holder made a big sale. Shares of the natural gas producer slid nearly 30 percent after reporting ...
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