Unusual Options Activity: Cemex (CX)

International cement giant Cemex (CX) has seen shares rally in recent months. A return to normal economic activity bodes well for construction. One trader sees the trend continuing even higher.

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  • That’s based on the April 2021 $5.50 calls. Expiring in 136 days, the options saw over 12,950 contracts trade. That’s a staggering 105-fold rise in volume from the prior open interest of 105. With shares at $4.60, the stock would need to rise 19.6 percent for the option to move in-the-money.

    The trader paid about $0.31 on average, or $31 per contract of 100 shares.

    Shares of Cemex are up 29 percent over the past year, beating the S&P 500 by about 12 percent. Shares still trade under their book value and at about 0.5 times their price to sales. While unprofitable in the most recent quarter, the company has made an overall profit in the past year.

    Action to take: The relative valuation and performance of shares looks like a reasonable buy here. Traders may want to buy these April calls. While far out-of-the-money, they offer triple-digit return potential as shares continue to trend higher in the next few months.

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  • Investors may also like shares here for the valuation, a bet on a recovering global economy, and a 2.1 percent dividend yield at today’s prices.