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- Insider Activity: Halliburton (HAL)
- Dealer Inspire Selected as Website Provider for GM Dealerships
- Cloudflare Soars in IPO
- Unusual Options Activity: CSX Corp. (CSX)
| Insider Activity: Halliburton (HAL) Posted: 16 Sep 2019 03:00 AM PDT
Insiders make first buy in 14 months. Director William Albrecht recently added to his stake at Halliburton (HAL), with an 8,000 share buy. The purchase doubled his total stake to 16,000 shares, and cost over $154,000 to make the buy. This is the first insider buy at the company in 14 months, following a series of sales by insiders at prices anywhere from 28 to 49 percent higher than current prices. Halliburton provides various products and services to the oil and natural gas industry. Their products include well casing and cementing services, well completion and sand control products, pump and lift services, and other various products for drilling and exploration. Action to take: Shares of Halliburton have dropped 49 percent in the past year, against a 3.5 percent drop in revenue, making shares look well oversold. The company remains profitable, and trades near 11 times earnings. While further insider buying at current prices would bolster the case for going long shares, they look attractive under $20 per share, close to the recent insider buy, and where buyers can get a 3.65 percent dividend yield. Speculators may want to wait until the oil market shows more signs of moving higher before making a bet on the space, as shares will likely trade near current prices until sentiment in the oil market improves.  |
| Dealer Inspire Selected as Website Provider for GM Dealerships Posted: 16 Sep 2019 03:00 AM PDT
Cars.com-owned website to profit from agreement. Dealer Inspire, a division of Cars.com (CARS), has been selected as a website provider for dealers of General Motors. The company has over 4,000 dealers in the U.S for the Chevrolet, Buick, and Cadillac brands. Dealer Inspire provides advanced website platforms to connect automotive customers and dealers quickly and with high personalization and customization options. DI reports that it has an average dealer satisfaction score of 9.5 out of 10, leading the industry. Cars.com provides services connecting car dealerships with customers. While shares are down substantially in the past year, the partnership with GM sent shares up nearly 10 percent on the day and shares are well off the lows. Action to take: Given the company's relative valuation, increased revenue from the GM deal, and the bullishness of company insiders, including an 11,000 share buy from the company CEO recently, there is likely further upside in shares here. We continue to like shares of the company, now with a buy price at or under $12. Speculators should still look at long-dated call options to profit from further upside— say with a $15 strike price. Speculators who made a trade following insider buying earlier in the week may want to sell part of their position to take some profits off the table here.  |
| Posted: 16 Sep 2019 03:00 AM PDT
Company marks successful IPO. Shares of Cloudflare started trading on the New York Stock Exchange under the ticker NET. The company had an IPO price of $15 per share, but rallied about 20 percent to $18 per share in early trading. The company's IPO is the biggest tech IPO in recent months, and raised $525 million for the company, which now trades with a market cap of $1.4 billion. Founded in 2009, Cloudflare operates a cloud platform delivering a variety of services to businesses worldwide, including software-as-a-service applications, Internet of Things devices, and other security and network needs. Action to take: While we tend to shy away from IPOs until they can build up an operating history as a stock, particularly at companies that still have a problem growing revenue, Cloudflare’s IPO price was reasonable, and shares didn't soar away from an extreme value. Like many tech names, the company is still showing an operating loss, but is growing revenue at nearly 50 percent per year, and has a strong position in the cloud space to succeed, unlike many companies that go public before they can get fully established. While shares could certainly come back down in a market correction, they look attractive under $19 per share. Options will start trading in a few weeks, so until then, speculators will have to sit on the sidelines.  |
| Unusual Options Activity: CSX Corp. (CSX) Posted: 16 Sep 2019 03:00 AM PDT
Bet on railroad firm getting back to 52-week high. The February 2020 $77.50 call options on CSX Corp. (CSX) saw 2,000 contracts trade, an 18-fold increase over the prior open interest of 114. With shares of the company around $72.21, the option will trade in-the-money if shares rise at least 7.3 percent between now and February. With a price of $2.53 per contract on average, the call buyer will need to see shares trade closer to $80 to make a profit come expiration. As the company's 52-week high is right at $80 per share, the option looks dicey. CSX operates rail-based freight transportation services in the United States, primarily in the 23 states East of the Mississippi River. Action to take: Freight traffic has been slowing, both from a potentially slowing economy and the rise of a more digital economy, making a strong argument against a big rally from here. Shares look fairly valued at current prices, barring some kind of mega-merger with another railroad that would likely face severe antitrust scrutiny. We don't see shares as likely to soar anytime soon, but should provide investors with decent returns over the long haul if bought at or under $73. Speculators may be better off finding a more volatile company in the transportation space to trade, given the high cost of call options on the space.  |
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