There’s an old market adage to buy when there’s “blood in the streets.” But there are plenty of ways to draw blood. In today’s litigious society, one such way is with a big lawsuit. From hot cups of coffee to weed killer that may be cancerous, it’s no surprise that America still leads the world in producing lawyers who need something to do—which usually means finding someone with deep pockets to sue. While many cases have their merits, a favorable jury will often hand out pretty sizeable sums—and that kind of news can set back the shares of a company’s price. The days of the biggest ...
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Insider Activity: MGM Resorts International (MGM)
Hedge fund titan makes huge bet on the casino operator. One director just made a $75 million bet on the future of gambling. On June 7, director Keith Meister bought 2.8 million shares ofMGM Resorts International (MGM). Meister, an activist hedge fund manager at Corvex Management, already owns over 18 million shares. The casino company saw shares rise last week along with the overall market, but around $27 per share, shares are still below their 52-week high of $32. Casino stocks are somewhat cyclical, tending to expand with the economy. They tend to contract during recessions, ...
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Insider Activity: Conn’s (CONN)
Multiple directors buy at the regional retail firm. Three different directors have been buying shares recently in regional retail outletConn’s (CONN). Director James Haworth picked up 2,240 shares, shelling out nearly $40,000 to do so. Director Bob Martin picked up 26,600 shares, for a commitment of over $453,000. And director William Saunders bought 10,000 shares even, paying nearly $180,000. This kind of cluster of buys by directors is a solid sign. With only 125 locations in the South and Western United States, Conn’s operates as a specialty retailer of consumer goods and se...
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Unusual Options Activity: Freeport McMoRan (FCX)
Big bet that copper mining giant will move at least 10 percent higher by early July. At least one trader is betting on a 10 percent pop inFreeport McMoRan (FCX) in the next month. On Thursday, nearly 5,900 contracts traded on July 5th $11 calls. With shares just over $10, they would need to rally nearly $1, or about 10 percent, for these calls to expire in-the-money. With a prior open interest of 102 in the contract before the trade, this is a big move. As a copper producer, Freeport is best-in-class. However, copper prices have been weak year-to-date, amidst trade war fears.
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Insider Activity: American Airlines (AAL)
Half a dozen insiders get bullish on American Airlines this week. Six different insiders bought near the recent market bottom forAmerican Airlines (AAL). From the Chairman and CEO, to the company President to several Executive Vice Presidents, over $2.4 million in shares were bought by insiders on Tuesday, just before shares started rallying. The largest buy came from CEO Douglas Parker, who bought 50,000 shares, spending over $1.4 million alone. Based on the price he paid per share, he fared the worst among insiders so far. This type of cluster of insider buying is far more bu...
MoreWhen Stock Investors Get it Wrong
When you buy shares of a company, you’re getting an ownership slice. If the company does well, your shares should rise. The company may even pay a dividend, providing you with cash you didn’t have to labor over for a living. Sounds great! But, a company is more than just the sum of its shares. Companies have a capital structure, which includes a mix of stocks (called equity), and other types of financing, typically debt. Nearly all companies have debt. Some debt, relative to the stock value, is fine. It’s a lot like the mortgage on your home—borrowed money that lets the company do th...
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Unusual Options Activity: Las Vegas Sands (LVS)
A big, bearish trade implies more downside for the casino from here. At least one trader is betting on a big decline in casino firmLas Vegas Sands (LVS). On Tuesday, a large number of contracts traded on aDecember $40 put option. With shares currently trading around $55, which implies a 25 percent decline in shares between now and the end of the year for the put option to pay off like a winning slot machine. The contract had over 1,360 trades, against an existing volume of just over 200 contracts. Shares of the casino have traded as high as $81 in the past year. A slowdown in g...
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Unusual Options Activity: Facebook (FB)
Traders are betting that Facebook shares will bounce after Monday's decline. Some traders are betting that shares ofFacebook (FB) are oversold. The social media giant sold off with the other tech giants on Monday on news that the FTC will look into the company. Shares fell over 8 percent. However, some traders see the move as too much, too soon, and expect shares to potentially move higher from here, with bets on options expiring at the end of this week on June 7. With shares around $171 thanks to the selloff, a surge in call option buyers at the $170, $172, and $175 strike pri...
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Insider Activity: Sally Beauty Holdings (SBH)
Insiders are picking up shares at the cosmetics company. Multiple insiders atSally Beauty Holdings (SBH) have been adding shares in recent days. Chairman of the Board Robert McMaster picked up 5,000 shares, shelling out over $73,000 of his own money to add to his take. CFO Aaron Alt bought 1,500 shares, paying over $22,000 to add to the cosmetic supply company. On top of that, CEO Christian Brickman bought 5,000 shares for nearly $75,000 as well. This is a nice cluster of corporate insiders. The CEO, Chairman and CFO are typically the best informed about a company and its fu...
MoreBuy this Blue Chip Bargain
There are a lot of ways to make money in the market. But even if you find that rare company that can move ten-fold and provide one of the best profits of your lifetime, that will take time. Most investors get impatient. There are far more investors interested in companies likeAmazon (AMZN) today, now that it’s proven its profitability. But even if you invested in the company back when shares were far cheaper, chances are you wouldn’t have taken the full ride. Instead, you would have cashed out and left a huge chunk of potential profits on the table. Rather than try and find the next ...
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