We love big call buys on weakness in a stock, or the market in general. And thre was just one seen in Cenovus Energy Inc (CVE) today.
Just a little while ago we saw a trader buy 3,971 September $30 calls. Most of those were bought at the ask of $1.10. This opening call buy in this Canadian energy company had a transaction value of over $437,000.
Cenovus Energy Inc (CVE) is currently trading at $33.51 down 14 cents, not far off it’s low of the day of $33.40. CVE has a 52 week high of $34.49, and a low of $28.25 on the year. It’s trading average volume with about 809,000 shares trading by 1:40 pm today.
Cenovus Energy Inc (CVE)just announce quarterly earnings on July 30th so clearly this is not one of th risky earnings plays. The stock has been oozing lower since the buy, but you’ll still have to pay 5 cents higher to get these calls right now.
No idea what to expect with earnings not reported again until October 23rd. But our money is on a friends and family upgrade play. To be blunt, an analyst is likely about to upgrade this stock and the firm is buying up some calls for some extra leverage when the price bump comes.
We like this trade given it’s size, so we are in it to win it.
Fourteen analysts currently follow Cenovus Energy Inc (CVE). The average rating on CVE is a “HOLD” and the average price target is $36.83. CVE shares are trading at a PE of around 21 now. There definitely looks to be room for a nice analyst upgrade / price target increase in the very near future as there are 9 holds and 5 buy ratings. The last analyst action was August 1, when TD Securities boosted their price target from $35.00 to $36.00. Our money is on one of the US based firms to upgrade this, as Canadians firms are too ethical to buy the options ahead of their own upgrade, right?
Either way, we are interested in Cenovus Energy Inc (CVE) and are locked and loaded in the September $30’s