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- Insider Activity: Unit Corp (UNT)
- Netflix Shares Drop Over 10 Percent as Subscriber Count Misses
- Unusual Options Activity: Cloudera, Inc (CLDR)
- Philadelphia Fed Survey Jumps to Highest in a Decade
| Insider Activity: Unit Corp (UNT) Posted: 19 Jul 2019 03:00 AM PDT
Director adds to stake of energy exploration company. On Wednesday, director Bailey Peyton picked up another 3,000 shares of Unit Corp (UNT), where he serves as a director. The stake cost $21,900 and increased his shares take to 74,652, an increase of 4.2 percent. This follows on buys made back in May by Peyton, as well as two other directors, at prices ranging from 28 to 38 percent higher than today. Unit Corporation engages in the exploration, acquisition, development and production of natural gas and oil properties in the United States, largely in Oklahoma and Texas, as well as other resource-rich states. It has 55 drilling rigs in its fleet, but also owns 3 natural gas treatment plants, 14 treatment plants, and owns over 1,400 miles of pipeline in a number of states Action to take: With the recent weakness in oil this week, as well as the seasonal weakness for natural gas prices in general, and with shares right near their 52-week low of $7.10, there may yet be some more downside ahead. Thanks to the selloff, the company has more debt than equity, so a surge back to old highs may take some time. Investors may want to wait until prices drop even lower, say to $6.00, or wait for the natural gas market to start perking up before buying.  |
| Netflix Shares Drop Over 10 Percent as Subscriber Count Misses Posted: 19 Jul 2019 03:00 AM PDT
Media giant misses on key metric for investors. On Wednesday after the close, Netflix (NFLX) reported solid earnings. Revenue grew by 26 percent to $4.92 billion. The company's operating margin rose 250 basis points to 14.3 percent. However, the company only grew subscribers by 2.7 million. With an expectation of 5 million, the market saw slower subscriber rates as a potential danger for the company's performance going forward, and shares dropped over 10 percent as a result. The earnings come after the company reported its biggest numbers yet for views of programs such as the Adam Sandler movie Murder Mystery and the newest season of Stranger Things. The company announced it was expecting to grow its subscribers by 7 million in the third quarter compared to 6.1 million in the third quarter of the prior year. The company also made a point to announce that, like HBO and unlike many other streaming services, Netflix is and intends to remain ad-free. Action to take: Netflix is an industry dominator. The market has oversold based on one admittedly key metric. But as long as the company is growing revenues by double digits and improving its operating margin, it's moving in the right direction from an operational standpoint. Investors may want to look at adding shares here for the long term. Traders may want to look at January 2020 $350 calls for a rebound trade in the coming weeks.  |
| Unusual Options Activity: Cloudera, Inc (CLDR) Posted: 19 Jul 2019 03:00 AM PDT
Bet on shares heading higher. Shares of Cloudera (CLDR) may be heading higher between now and February, based on a surge of the $5 call options there. On Thursday, over 8,200 of the calls traded against a prior open interest of 123—a 67-fold surge in volume. With shares trading at $5.50, the options are also about 10 percent in-the-money, meaning they should move penny-for-penny, less the decline in the time premium. Cloudera provides data analytic and management products, operating both a subscription and service-based systems. It provides data and storage solutions for private cloud systems, as well as services to collect and analyze data and provide network security. The company has strategic partnerships with companies such as Intel, IBM and Hitachi. In the past year, shares have traded between $4.90 and $20, and are currently around $5.50, about a 75 percent decline from the most recent 52-week high. Action to take: A large, in-the-money trade is a sign of a trader looking to profit from the upside in a company while also allowing for some market fluctuation. With this option trading around $1.47, shares would need to trade closer to $6.50 between now and February to offset the loss in time premium. Given how high shares have traded in the past, this looks like an easily achievable goal. A surge to, say, $10, would lead to the option being worth $5, for about a $3.50 profit, or about a 133 percent return. With those odds, this trade looks particularly attractive.  |
| Philadelphia Fed Survey Jumps to Highest in a Decade Posted: 19 Jul 2019 03:00 AM PDT
Major surge in manufacturing outlook. On Thursday, the latest regional survey from the Philadelphia Federal Reserve Bank, revealed a rise of 5.0 points to 21.8, a massive shift from the 0.3 read June. This is the biggest month-over-month jump since June 2009, as the economy was hitting the bottom of the Great Recession. Nearly just about every read on the survey showed a gain, including the highest rate of manufacturing employment for the history of the survey. Specifically, paid prices rose, new orders rose, shipments rose, and delivery times fell on average. Outlook for future activity and capex rose as well. One dark spot was in a rise in inventories, which could indicate that newly manufactured goods are spending more times unsold on shelves, a sign of an economic slowdown. If all economic surveys showed this kind of strength—albeit off a more dour report last month—then it would be reasonable to ask why the Federal Reserve is starting to talk about cutting interest rates to support the economy now. This survey is a "soft" survey that relies on expectations from industry players. The July survey asked respondents their views on demand over the past several months as well. 56 percent of firms reported increasing demand, but a still-high 31.6 percent of firms reported decreasing demand.  |
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