After unusual volume in the Tenaris (NYSE:TS) calls yesterday, a trader is loading up again today on the Sept $50 calls of Tenaris (TS). Given yesterdays action and the size of today’s action, we like this trade a lot. Given that it’s unusual option buying in a foreign ADR, we like this trade EVEN more.
We’re betting that this trader(s) have some knowledge of events/facts that haven’t been announced to the public yet. It’s hard to lose money when you know facts before everyone else, right?
The September $50 Tenaris (NYSE:TS) calls have traded over 2600 calls and are now bidding $1.00 and asking $1.05 with the last trade at $1.05. Meanwhile, the stock is trading at $47.28 today, up 38 cents. Volume is actually lighter than it’s usual average volume, which is interesting given the large call buying taking place.
With this kind of call buying it’s only a matter of time before either 1) an analyst upgrade and/or target price raise is announced, 2) some sort of merger / acquisition is announced, 3) a dividend hike is announced, or 4) some sort of positive financial update, or contract win is announced.
The 52 week high for Tenaris (NYSE:TS) is $49.87 and the low $40.63. It has a dividend yield of 1.82% currently. It’s a thinly traded stock yet has 24 analysts covering it at the moment, with a rating of HOLD, and a price target of $46.12. The consensus earnings estimate for this quarter is 70 cents per share.
This makes us think an upgrade and price target increase is coming very soon. We are ready, having bought some of the September $50 calls in a copycat trade. These fishy foreign company option trades are almost always golden.
Tenaris (NYSE:TS) is based in Luxembourg and is a steel pipe manufacturer and distributor. It’s pipes are mainly used in pipelines, and in oil and gas drilling. Given that line of business and the growth in oil and gas drilling and pipeline building, this make for interesting timing for this activity in Tenaris options. A big project contract could be the reason for this call buying too.