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- Insider Activity: Bank of Commerce Holdings (BOCH)
- Facebook Rallies Despite Record $5 Billion Fine From FTC
- Oil Rallies, then Flops as Inventories See 10.9 Million Barrel Drop
- Unusual Options Activity: Snapchat (SNAP)
| Insider Activity: Bank of Commerce Holdings (BOCH) Posted: 25 Jul 2019 03:00 AM PDT
Director adds to stake of regional bank. On Tuesday, director Karl Silberstein picked up 4,000 shares of Bank of Commerce Holdings (BOCH). The buy increases his stake to 30,295 shares, and came at a total cost of $42,400. Over the past two years, insiders at Bank of Commerce Holdings have been buyers, with no sales. Insiders own nearly 6 percent of outstanding shares.
Bank of Commerce Holdings is the holding company for Redding Bank of Commerce in Northern California. The bank is largely in the traditional lending business to small and medium-sized businesses as well as retail customers. The company operates 10 full-service facilities in California and is headquartered in Sacramento. Action to take: The combination of multiple years of insider buys with no sales makes this company worth a closer look. Although somewhat small, the bank could be a buyout target by a larger bank looking to grow its book of business in the future. The bank looks particularly attractive, trading at just over 10 times forward earnings and with a fast 27 percent profit margin. And with shares down nearly 20 percent in the past year, it's easy to see why insiders are buying here. Shares look attractive up to $11 per share, and investors will get nearly a two percent yield at current prices.  |
| Facebook Rallies Despite Record $5 Billion Fine From FTC Posted: 25 Jul 2019 03:00 AM PDT
Privacy oversight concerns lead to largest fine for a tech company.
The Federal Trade Commission announced a settlement with Facebook over the company's privacy policies. At $5 billion, the fine is the largest ever imposed by the FTC against a tech company. The fines stem from a probe that started in March 2018 following reports that Facebook allowed political consulting firm Cambridge Analytica to improperly access the data of 87 million users. Shares of Facebook dropped about 2 percent before the market open, but moved off those lows to rally about 1 percent higher before the close (when the company promptly reported an earnings beat). The $5 billion fine represents less than 10 percent of the company's 2018 revenue. Besides the monetary settlement, the FTC has ordered a privacy oversight committee to provide more independent oversight regarding privacy policies, and Facebook CEO Mark Zuckerberg will have to report on the company's privacy policies to the FTC quarterly.
Action to take: The FTC action has been known for some time. And while the fine is large, it beats a prolonged trial, which could have taken years to play out and could have ended in Facebook's favor— and without changes in company privacy oversight. Facebook's approval of these moves is a huge move towards making up for previous privacy missteps. Facebook shares look like a solid buy, even after the company reported an earnings beat after the close Wednesday.  |
| Oil Rallies, then Flops as Inventories See 10.9 Million Barrel Drop Posted: 25 Jul 2019 03:00 AM PDT
Oil inventories see another unexpectedly large decline. Crude oil inventories fell by 10.9 million barrels, per the latest economic data released Wednesday. This is the sixth week in a row to see drops in oil inventories. Crude production dropped by 700,000 barrels in the past week, largely due to stoppages in the Gulf of Mexico related to tropical storm Barry. Rig counts in the U.S. have dropped for both onshore and offshore oil in recent months as well. While this data tends to be seasonally supported by increased demand during the summer driving season in the United States, gasoline inventories rose by 4.6 million barrels. So, as with other economic indicators, there is both good news and bad news, but oil prices rose modestly on Wednesday after the data came out before declining into the close. Some oil analysts see the inventory moves as a sign that oil has priced in a low for the year already, while others see a sign of a slowing economy and thus slowing demand for oil. International data suggests that economies are slowing. Oil futures prices for Brent oil—the international standard for crude—is showing a discount two months out. This is a situation called "contango," which indicates that global supplies are likely in excess of current global demand.  |
| Unusual Options Activity: Snapchat (SNAP) Posted: 25 Jul 2019 03:00 AM PDT
Big bet on decline following earnings surge. Shares of Snapchat (SNAP) may have rallied on Wednesday following their strong quarter, but most traders were betting the rally in shares would be short-lived. On Wednesday, a number of put options on the company saw an explosion in volume, suggesting shares would come down in the coming days—possibly as soon as Friday. The most interesting of these options? The August 16th $17 puts. With shares of Snapchat hitting $17 in trading on Wednesday, the option is a bet that shares will flat line in the next 23 days. Trading around $0.70, if shares come back down off their earnings pop, they should move penny-for-penny. If shares hit $15 by mid-August, for instance, then the options would move to $2, for a 185 percent profit. Action to take: While Snapchat has been doing well operationally, shares are certainly likely to give back some of their post-earnings gains in the coming weeks, as it has after prior earnings reports. So a put trade looks attractive, but we prefer to give traders more time for the trade to play out. December $17 or even $16 puts will give traders more time. While costlier up front due to more time premium in the trade, it gives traders more flexibility on when to take profits.  |
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