The market may be struggling today, but that doesn’t mean the smart money isn’t buying calls still. The largest call buy of the day so far was just seen in Pandora Media (P). Actually, there has been two big call buys in Pandora.
Seems one trader is tuning into Pandora Media (P) prospects and thinks it’s going higher before October 18th. The first trader bought 1,500 Pandora October $28 calls. They paid the ask of $1.15 for those calls. That makes for a good sized bet with a transaction value of about $173,000.
Then a second trader came in 15 minutes later with a buy of 1125 October $31 calls as well. That trade went through at the ask of 57 cents, for a trade value of $64,000.
Pandora Media (P) is currently trading at $27.02 up 92 cents so far, though it is well off it’s low of the day of $26.14. Pandora has a 52 week high of $40.44, and a low of $20.21 on the year. It’s trading pretty low volume though, with just over 1 Million shares trading by 10:15 this morning.
Pandora Media (P) isn’t scheduled to report quarterly earnings until late October so clearly this is not one of those earnings plays here. So these two call buys in Pandora Media (P) are eve more interesting now.
So what do these traders know that no one else seems to know? Is there a big announcement coming? Are they planning to pre announce stellar results and higher forward guidance? No, not likely. It’s much more likely that an analyst upgrade and price target boost is in the works, and said firm is buying up some calls to make mad money.
There have now been just under 1900 of the October 28 pandora calls traded as the piggy back traders hop on this trade.
We like this trade and we like the company, so we’re in for some fun too.
32 analysts currently follow Pandora Media (P). The average rating on CNP is “overweight” and the average price target is $34.70. There definitely looks to be room for a nice analyst upgrade / price target increase in the very near future.
The last analyst action was September 4, when Albert Fried & Company reiterated it’s underweight rating, and August 25 when MKM Partners reiterated a BUY rating on the stock. Our money is on Goldman Sachs or Cowen and Co to come out with a big price target raise and upgrade.
Either way, we are interested in Pandora Media (P) and have already nibbled on the Oct 28 calls.