Unusual Options Activity Fri 10/6/23

 

The following options are exhibiting notable trading, potentially indicating changing sentiment toward the underlying stocks, and/or potentially representing positioning for increased volatility.

Bullish Call Activity:

• MU Oct 68 calls (volume: 3940, open int: 8070, implied vol: ~67%, prev day implied vol: 46%).  2K traded in a single transaction. Co starting construction on memory fab in Idaho; expected to come online in phases starting in 2025, with DRAM production ramping over the second half of the decade. Co is expected to report earnings late December. 
• QCOM Oct 110 calls (volume: 3020, open int: 760, implied vol: ~43%, prev day implied vol: 35%). The Biden administration is expected to soon tighten chip tool restrictions against China. Co is confirmed to report earnings November 1 after the close.
• AVGO Oct 840 calls (volume: 1920, open int: 640, implied vol: ~37%, prev day implied vol: 34%). Co is expected to report earnings mid-November.
  

Bearish Put Activity:

• UPST Oct 25 puts (volume: 2610, open int: 410, implied vol: ~159%, prev day implied vol: 100%). Co is expected to report earnings early November.
• SIRI Nov 4 puts (volume: 10.4K, open int: 10, implied vol: ~91%, prev day implied vol: 88%). 2500 contracts traded in a single transaction. Co is confirmed to report earnings November 3 before the open.

Sentiment: The CBOE Put/Call ratio is currently: 1.30, VIX: (17.64, -0.85, -4.6%).
October 20 is options expiration -- the last day to trade October equity options.

Appaloosa Management : top 5 buys in the 4th quarter

David Tepper, founder of Appaloosa Management, disclosed last week that his fund's top five buys during the fourth quarter of 2019 included a new holding in Intelsat SA (NYSE:I) and position boosts in four companies: Alibaba Group Holding Ltd. (NYSE:BABA), Micron Technology (NASDAQ:MU), Energy Transfer LP (NYSE:ET) and Amazon.com Inc. (NASDAQ:AMZN).

A distressed debt specialist, Tepper became interested in the stock market as a young boy watching his father trade stocks in his hometown of Pittsburgh. The Appaloosa fund manger has since earned international reputation for producing some of the highest returns among fund managers on Wall Street.

According to CNBC sources, Tepper announced in May 2019 that he plans to convert Appaloosa into a family office so that he can concentrate on managing the Carolina Panthers NFL football franchise, which he purchased for over $2.27 billion in 2018. As of December 2019, the $3.94 billion equity portfolio contains 22 stocks, with turnover of 13%. The top three sectors in terms of portfolio weight are communication services, consumer cyclical and technology, with weights of 31.53%, 30.05% and 17.39%.

New buy: Intelsat

Appaloosa purchased 2,885,019 shares of Intelsat, giving the stake 0.51% weight in the equity portfolio. Shares averaged $15.33 during the quarter.

The Luxembourg-based telecom company provides diversified communication services to media companies, fixed and wireless telecom operators and data networking service providers. According to GuruFocus, Intelsat's interest coverage and debt ratios underperform over 90% of global competitors, suggesting low financial strength.

Charts 6 months later: 

• Intelsat SA (NYSE:I) is trading over the counter

https://finviz.com/screener.ashx?v=211&t=I,BABA,MU,ET,AMZN&ta=0&p=w&o=-change

-=Micron (MU) reported earnings on Thur 26 Sept 19 (a/h)

•  The stock was up over 50% in 2019 heading into the report. 

Micron beats by $0.08, beats on revs; guides Q1 EPS in-line, revs above consensus; Sees FY20 CapEx in the range of $7-8 bln

Reports Q4 (Aug) earnings of $0.56 per share, excluding non-recurring items, $0.08 better than the S&P Capital IQ Consensus of $0.48 (Guidance $0.38-0.52); revenues fell 42.3% year/year to $4.87 bln vs the $4.56 bln S&P Capital IQ Consensus (Guidance $4.3-4.7 bln).

• Gross Margin 30.6% (Guidance 27.5-30.5%)
• Operating Expenses $745 mln (Guidance $760-810 mln)
• Free Cash Flow $263 mln.

Co issues guidance for Q1, sees EPS of $0.39-0.53, excluding non-recurring items, vs. $0.49 S&P Capital IQ Consensus; sees Q1 revs of $4.8-5.2 bln vs. $4.78 bln S&P Capital IQ Consensus.

• Gross Margin in the range of 25-28%.
• Sees CapEx in the range of $7-8 bln; Co had said it would be down meaningfully from the $9 bln in 2019.

"We are encouraged by signs of improving industry demand, but are mindful of continued near-term macroeconomic and trade uncertainties. As markets recover, Micron is well positioned to address the robust secular demand for memory and storage solutions."

Micron -- DRAM and NAND Outlooks

DRAM

• CY-19 industry bit demand growth remains unchanged at mid-teens, with supply exceeding demand
• CY-20 industry bit demand growth of high-teens to 20%, above supply growth of only mid-teens
• Long-term bit demand growth CAGR of mid-to-high teens

NAND

• CY-19 industry bit demand growth in the low-to-mid 40% range, which will exceed bit supply growth of approximately 30%
• CY-20 industry bit demand growth of high-20s to low-30% range, with supply growing somewhat below demand
• Long-term bit demand growth CAGR in low-30% range

Micron- Huawei Commentary

In the fiscal fourth quarter, sales to Huawei declined sequentially and were down meaningfully from the levels we anticipated prior to the addition of Huawei to the Entity List

We have applied for licenses with the U.S. Department of Commerce that would allow us to ship additional products, but there have been no decisions on those licenses to date

If the Entity List restrictions against Huawei continue and we are unable to get licenses, we could see a worsening decline in our sales to Huawei over the coming quarters

Read more: http://hosting.briefing.com/cschwab/InDepth/InPlay.htm#ixzz60kaKalQr

Earnings this week : Sept 23 - 27, 19 (wk 39)

Monday (Sept 23)

• Morning: CMD UXIN

Tuesday (Sept 24)

• Morning: AZO BB KMX INFO JBL MANU NEOG NIO
• Afternoon: CTAS NKE SNX

Wednesday (Sept 25)

• Morning: DAVA WOR
• Afternoon: AIR FUL KBH

Thursday (Sept 26)

• Morning: ACN ATU CAG FDS, CCL
• Afternoon: CAMP MTN MU PRGS UEPS

Friday (Sept 27) 

• None

Notable earnings reports:: Ascena Retail Group (NASDAQ:ASNA) on September 23; Nike (NKE), Blackberry (BB), AutoZone (NYSE:AZO), Nio (NYSE:NIO) and CarMax (NYSE:KMX) on September 24; AAR (NYSE:AIR) and KB Home (NYSE:KBH) on September 25; Micron (MU), Carnival (NYSE:CCL), Rite Aid (NYSE:RAD) and ConAgra Brands (NYSE:CAG) on September 26.

***

President Trump will meet with Japanese Prime Minister Shinzo Abe in the week ahead at the annual United Nations General Assembly amid high expectations that a trade deal will be finalized. Heading into the meeting, Tokyo reportedly wants written assurances from Washington that it will not impose hefty tariffs on its auto exports before a finalized deal on farm goods and digital trade is inked. The vibe from the Trump-Abe meeting could impact trading on Nissan (OTCPK:NSANY), Subaru (OTCPK:FUJHY), Toyota (NYSE:TM) and Honda (NYSE:HMC). Meanwhile, economic reports on new home sales, durable goods and consumer spending will give investors a good idea where Q3 stands, while the final reading on Q2 GDP will put a period on the last quarter.

=Micron (MU) reported earnings on Tue 25 June 19 (a/h)

Micron beats by $0.26, beats on revs; Seeing early signs of demand improvement but will reduce 2020 CapEx spend

• Reports Q3 (May) earnings of $1.05 per share, excluding non-recurring items, $0.26 better than the S&P Capital IQ Consensus of $0.79; revenues fell 38.6% year/year to $4.79 bln vs the $4.7 bln S&P Capital IQ Consensus.
• "Micron's improved competitive position and strong execution helped us deliver solid results despite a challenging environment," said Micron Technology President and CEO Sanjay Mehrotra. "While we are seeing early signs of demand improvement, we plan to reduce our capital expenditures in fiscal 2020 to help improve industry supply-demand balance."

Earnings this week : June 24 - 28, 19 (wk 26)

Earnings confirmed for this week

Monday (June 24)

• None

Tuesday (June 25)

• Morning: BNED FDS LEN
• Afternoon: AVAV FDX MU SNX

Wednesday (June 26)

• Morning: ATU BB GIS INFO PAYX SCHN UNF
• Afternoon: FUL MLHR KBH WOR

Thursday (June 27)

• Morning: ACN APOG CAG GMS MKC PDCO SJR WBA
• Afternoon: CAMP NKE PRGS SGH

Friday (June 28) 

• Morning: STZ JKS

Notable earnings reports: Micron (NASDAQ:MU), FedEx (NYSE:FDX), Lennar (NYSE:LEN) and FactSet Research (NYSE:FDS) on June 25; Rite Aid (NYSE:RAD), Blackberry (NYSE:BB), National Beverage (NASDAQ:FIZZ) and General Mills (NYSE:GIS) on June 26; Nike (NYSE:NKE), Walgreen Boots Alliance (NASDAQ:WBA) and ConAgra Brands (NYSE:CAG) on June 27; Constellation Brands (NYSE:STZ) on June 28.

Spotlight on FedEx: Analysts expect FedEx (FDX) to report revenue of $17.88B and EPS of $4.39 with its FQ4 report. JPMorgan turned some heads by predicting that FedEx would clear the decks with below-consensus guidance across the board. FedEx conference call topics will run the course from fuel costs, tariff headwinds, wage inflation pressure to Amazon. Naturally, shares of UPS (NYSE:UPS) could see a jolt if FedEx surprises to the upside or downside with guidance. So far this year, shares of FedEx are up 4.1% to trail the 5.7% gain for UPS.

Playing Nike earnings: Nike (NKE) is expected to report revenue of $10.2B and EPS of $0.66 when it reports on July 27. Oppenheimer thinks Nike's stepped up investment spending could drag down FQ4 profit and the company's full-year guidance to act as a near-term negative catalyst for shares. "We recommend clients use any share price weakness in NKE as a buying opportunity. In our view, higher costs at the company are strategic in nature and will help to further enhance the prowess of the brand, over time," advises the firm. Foot Locker (NYSE:FL), Under Armour (NYSE:UAA) and Adidas (OTCQX:ADDYY) have all been known to swing up or down with Nike on earnings day.

Micron (MU) reported earnings on Thur 20 Sept 2018 (a/h)

** charts before earnings **

 

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Micron beats by $0.21, beats on revs; will guide for Q1

• Reports Q4 (Aug) adj. earnings of $3.53 per share, $0.21 better than the S&P Capital IQ Consensus of $3.32; revenues rose 37.5% year/year to $8.44 bln vs the $8.25 bln S&P Capital IQ Consensus ($8.0-8.40 bln guidance), reflecting increased demand broadly across our products and end markets.
• Gross margin was 61% vs. 59-62% guidance, compared to 60.6 percent in the third quarter benefiting from strong execution across our product portfolio. Operating cash flow +61% to $5.16 bln 
• "In the fourth quarter, we set revenue records across all our major markets, from automotive and industrial to mobile and cloud datacenters. The secular and diversified growth drivers in our industry combined with accelerating pace of transformation of the new Micron form a tremendous catalyst for us to create enduring value for our customers and investors in 2019 and the years ahead."

Earnings expected this week : Sept 17 - 21, 18 (wk 38)

Earnings confirmed for this week

Monday (Sept 17) 

• Morning: None
• Afternoon: FDX  ORCL

Tuesday (Sept 18)

• Morning: APOG AZO CBRL GIS 
• Afternoon: None

Wednesday (Sept 19)

• Morning: CPRT
• Afternoon: MLHR  RHT

Thursday (Sept 20)

• Morning: DRI   THO
• Afternoon: MU  SCS  UNFI

Friday (Sept 21)

• Morning: None

Micron (MU) reported earnings on Tue 19 Dec 2017 (a/h)

• #15;  vol. 47.7M

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** charts after earnings **

Micron beats by $0.24, beats on revs; guides Q2 EPS above consensus, revs above consensus 

• Reports Q1 (Nov) earnings of $2.45 per share, excluding non-recurring items, $0.24 better than the Capital IQ Consensus of $2.21; revenues rose 71.4% year/year to $6.8 bln vs the $6.43 bln Capital IQ Consensus.
  • Revenues for the first quarter of 2018 were 11 percent higher compared to the fourth quarter of 2017, reflecting increased demand for our mobile, server, and SSD products. Our overall consolidated gross margin of 55.1 percent for the first quarter of 2018 was higher compared to 50.7 percent for the fourth
• Co issues upside guidance for Q2, sees EPS of $2.51-2.65 vs. $2.04 Capital IQ Consensus Estimate; sees Q2 revs of $6.80-7.20 bln vs. $6.21 bln Capital IQ Consensus Estimate.

Micron Technology (MU) reported earnings on Thur 29 June 2017 (a/h)

** charts after earnings **

 

• Micron beats Street 3Q forecasts

BOISE, Idaho (AP) _ Micron Technology Inc. (MU) on Thursday reported fiscal third-quarter net income of $1.65 billion, after reporting a loss in the same period a year earlier.

On a per-share basis, the Boise, Idaho-based company said it had net income of $1.40. Earnings, adjusted for non-recurring costs and stock option expense, were $1.62 per share.

The results beat Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $1.49 per share.

The chipmaker posted revenue of $5.57 billion in the period, also exceeding Street forecasts. Five analysts surveyed by Zacks expected $5.4 billion.

Micron shares have risen 44 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed 8 percent. In the final minutes of trading on Thursday, shares hit $31.56, more than doubling in the last 12 months.

Micron Technology (MU) reported earnings on Thur 23 March 2017 (a/h)

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• DRAM and NAND memory chip maker Micron Technology (MU) showes higher-than-expected earnings, and also an outlook for Q3’s revenue and profit that blows away Street consensus.

BOISE, Idaho (AP) _ Micron Technology Inc. (MU) on Thursday reported fiscal second-quarter net income of $894 million, after reporting a loss in the same period a year earlier.

The Boise, Idaho-based company said it had profit of 77 cents per share. Earnings, adjusted for non-recurring costs and stock option expense, were 90 cents per share.

The results beat Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 81 cents per share.

The chipmaker posted revenue of $4.65 billion in the period, meeting Street forecasts.

Micron shares have risen 21 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed nearly 5 percent. In the final minutes of trading on Thursday, shares hit $26.45, more than doubling in the last 12 months.

Micron (MU) reported earnings on Wed 21 Dec 2016 (a/h)

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** charts after earnings **

 

 Micron beats by $0.03, reports revs in-line :

• Reports Q1 (Nov) earnings of $0.32 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.29; revenues rose 18.5% year/year to $3.97 bln vs the $3.94 bln Capital IQ Consensus.
  • The increase in the company's revenues of 23 percent for the first quarter of fiscal 2017 compared to the fourth quarter of fiscal 2016 was due primarily to 18 percent and 26 percent increases in DRAM and trade NAND sales volumes, respectively, and a 5 percent increase in DRAM average selling prices.
  • The company's overall consolidated GAAP gross margin of 25 percent for the first quarter of fiscal 2017 was 7 percentage points higher compared to the fourth quarter of fiscal 2016 primarily due to manufacturing cost reductions and increases in DRAM average selling prices.

Micron: Industry Breakdown from Presentation :

• DRAM Guidance
  • Expect 2017 supply bit growth in the 15%-20% range.
  • Assumes suppliers won't add significant wafer capacity.
  • Longer-term, expect bit demand growth of approximately 20%-25%.
• NAND Guidance
  • Expect 2017 supply bit growth in the high 30% to low 40% range.
  • Assumes impact of 3D NAND conversions.
  • Longer-term, expect bit demand growth of approximately 40%-45%.
  • Expect to ship 3D XPointTM technology for revenue in 2017.
• DRAM (61% of Q1 revenue)
  • Mobile represented approximately 30%.
  • PC segment was in the mid-20s % range.
  • Server business was in the high-teens % range.
  • Specialty DRAM, which includes networking, graphics, automotive and other embedded technologies, was in the mid-20s % range.
• NAND (32% of Q1 revs)
  • Consumer, which includes memory cards, USB and components, represented 40%.
  • Mobile was in the low-20s %.
  • SSDs were in the mid-teens %.
  • Automotive and Industrial Multi-Market Segment and other embedded applications were in the 20% range.
• Storage Business Unit
  • Revenue up 13% Q/Q.
  • Continued to strengthen NAND and SSD product portfolios.
  • Now in fully-ramped production and customer qualification for 3D NAND TLC client and cloud drives.
• Embedded Business Unit
  • Revenue up 13% Q/Q driven by seasonal strength
  • Consumer revenue driven by home automation and camera
  • Saw continued strength and increasing demand in Automotive
• Mobile Business Unit
  • Revenue up 54% Q/Q driven by customer qualifications.
  • Saw strong sales of LPDRAM and Mobile NAND products.
  • Improved profitability from continued 20nm ramp and reduced higher-cost early production inventory.
• Computer and Networking Business Unit
  • Revenue up 18% Q/Q due to strong demand and 20nm shipments.
  • Saw additional Cloud growth and qualifications for top customers.
  • Graphics demand fueled by GPU launches and strong console sales.

Micron (MU) reported earnings on Tue 4 Oct 2016 (a/h)

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Micron beats by $0.06, reports revs in-line :

• Reports Q4 (Aug) loss of $0.05 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of ($0.11); revenues fell 10.6% year/year to $3.22 bln vs the $3.19 bln Capital IQ Consensus.
• "We are seeing improving market conditions in terms of both slowing supply growth and improving demand across a number of key segments," said Micron CEO Mark Durcan.
• Revenues for the fourth quarter of fiscal 2016 were 11 percent higher compared to the third quarter of fiscal 2016.
• DRAM sales volumes were up approximately 20 percent, while NAND sales volumes were up approximately 12 percent.
• DRAM average selling prices declined approximately 6 percent, while NAND average selling prices were relatively unchanged.
• The company's overall consolidated gross margin of 18 percent for the fourth quarter of fiscal 2016 was slightly higher compared to the third quarter due to increases in gross margin of DRAM products.

Micron (MU) reported earnings on Tue 22 Dec 2015 (a/h)

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Micron beats by $0.01, misses on revs; guides Q2 EPS below consensus, revs below consensus :

• Reports Q1 (Nov) earnings of $0.24 per share, $0.01 better than the Capital IQ Consensus of $0.23; revenues fell 26.7% year/year to $3.35 bln vs the $3.47 bln Capital IQ Consensus.
  • Revenues for Q1 were lower compared q/q primarily due to a 13 percent decline in DRAM average selling prices.
  • Non-Volatile trade revenues for the first quarter of fiscal 2016 declined 2 percent compared to the fourth quarter primarily as a result of a 7 percent decline in average selling prices partially offset by an increase in sales volume.
  • The company's overall consolidated gross margin of 25 percent for the first quarter of fiscal 2016 was 2 percent lower compared to the fourth quarter of fiscal 2015 primarily due to lower average selling prices partially offset by manufacturing cost reductions for DRAM and Non-Volatile products.

Guidance

• Co issues downside guidance for Q2, sees EPS of ($0.12)-($0.05), excluding non-recurring items, vs. $0.23 Capital IQ Consensus Estimate; sees Q2 revs of $2.9-3.2 bln vs. $3.47 bln Capital IQ Consensus Estimate.
• Q2 Gross Margin expected to be in the range of 17.5-20.0%.
• Operatin Expense expected to be in the range of $565-620 mln
• Operating Income (Loss) ($60) mln to $20 mln
• FY16 CapEx expected to be in the range of $5.3-5.8 bln

Outlook Comments

• PC DRAM remains under pressure; however there are signs of demand stabilizing
• Client SSD and eMCP prices have been impacted by increased competition
• We are on track with the qualification of several new technologies including 20nm DDR4 and low-power DDR4, as well as 3D NAND
• We are hopeful market conditions will improve in CY 2016 with stabilization in PC and continued strength in Mobile, Cloud and Embedded segments