We love unusual call buys, but we really LOVE repeat unusual call buys. And that’s the case for Vulcan Materials Corporation (VMC) today.
Back on July 24th we wrote about a BIG call buy in the November $70 calls for Vulcan Materials Corporation (VMC). Now, on Monday, we saw a trader buy 1,794 November $65 calls at $2.60. We thought we’d throw this out now given the weakness in the markets this morning, these calls are looking attractive. This new call buy had a transaction value of over $466,000.
Vulcan Materials Corporation (VMC) is currently trading at $61.70 up 10 cents, though it is well off it’s low of the day of $61.17. VMC has a 52 week high of $25.75, and a low of $22.46 on the year. It’s trading average volume with about305,000 shares trading by 1 pm today.
Vulcan Materials Corporation (VMC)just announce quarterly earnings on August 5 so clearly this is not one of those run of the mill risky earnings plays. This trader bought in yesterday when the stock price was higher than it is now. Yet the stock was down in early trading today. Now it’s jumped back to turned positive on the day. But you can still get these calls at $2.60 at the ask right now, the same as the trader who bought yesterday.
We don’t know what’s happening before mid November, but clearly these two traders know something good is cooking.
We like this trade given it’s size, and the fact that it’s seen some repeat buying. So we are in again.
Fifteen analysts currently follow Vulcan Materials Corporation (VMC). The average rating on VMC is a “HOLD” and the average price target is $65.70. VMC shares are trading at a PE of around 53 now, with a PE for next year forecast at 37. There definitely looks to be room for a nice analyst upgrade / price target increase in the very near future. And we have hunch that is exactly who’s buying here. We’re betting a nice price target increase is cooking from a major firm, maybe in the $68 to $72 range. The last analyst action was August 11, when little known Singular boosted their price target from $33.00 to $35.00. These monkeys have a Sell rating and a price target of $35 on a stock trading at $61.65. Talk about out to lunch. Our money is on a Jefferies upgrade to come out along with a juicy price target raise.
Either way, we are interested in Vulcan Materials Corporation (VMC) and are locked and loaded in the November $65.