An options trader with friends in all the right places has seen hit a quick double on a $255,000 “investment” on King Digital Entertainment (KING). The trader had the “foresight” to buy 2200 November $22 calls on June 6, just 3 weeks ago, at a price of $1.15 – $1.20 per call.
King Digital Entertainment (KING) has been candy crushing it the past week with a steady run from the $17.00 level. It’s up $4.35 for the past month. Yesterday was a big day for KING, trading up $2.70 to $20.55 on much higher volume than usual.
In it’s first 3 months of trading King Digital Entertainment (KING) has traded as low as $15.26, and has seen a high of $21.39. It’s currently trading at a P/E of 4.69 which makes it look undervalued. Of course you would have to assume they’ll need to hit another home run with a new Crack Candy Crush type of game if they can continue to grow revenues, and profits.
It’s too early in it’s trading life to have much in the way of analyst coverage, so there are no clear official price targets out there on King Digital Entertainment (KING). However, Deutsche Bank analysts have been overly enthusiastic about KING’s potential. They have been very positive on the compay’s prospects and have indicated a $27 price target on the shares. $27 would certainly make for a very tidy profit for the trader currently holding on to those November $22 calls.
King Digital Entertainment (KING) announces Q2 earnings on August 4, 2014.
At 9:15 am King Digital Entertainment (KING) is trading down in premarket trading, down 30 cents on very light volume. We did a copy cat trade of the trader in the know on June 6 and continue to hold our NOV 22 calls at this time. If we can get another positive day today, it may be time to take some, or all, off the table.
Here’s the 5 day chart on King Digital Entertainment (KING)