It’s shaping up to be a busy Friday for unusual call buying activity, AND repeat buying in one case. Two of the most interesting call buys were seen in Staples Inc (SPLS), one that saw a lot of call buying action in the past week or two, and in Molson Coors Brewing Company (TAP).
We wrote about the call buying surge in Staples Inc (SPLS)here, and that became a quick winner. Not a huge winner but nice none the less. Now today SPLS calls are getting snapped up in a hurry again. First a trader bought 4,970 SPSS December $14.00 calls, paying 30 cents for the contracts. Then, a trader bought another 6,518 December $14 calls for 30 cents again. That makes for a total of 11,663 contracts at 30 cents. Those buys have a transaction value of about $350,000. Given the earlier win in this name we are inclined to copy the trade, though we have to pay 35 cents at the ask now.
Staples Inc (SPLS) is currently trading at $12.74 up 23 cents on the day. The stock is actually off it’s low of the day since the call buy as it bounced up from $12.51. SPLS has a 52 week high of $16.67, and a low of $10.70 for the year. It’s traded just under 1.8 Million shares so far today versus it’s average volume traded of 10.5 Million.
Staples Inc (SPLS)has seen some analyst action the past week with Credit Suisse upgrading the stock to outperfrom from neutral, and raising the price target to $15.00. Given the large number of calls, I wouldn’t be surprised to see an upgrade from either Morgan Stanley or Goldman Sachs in the very near term. They are both at $11.00 on the price target and rating SPLS an underweight.
Meanwhile Molson Coors Brewing (TAP) looks to be going higher soon. A trader bought 1378 of the TAP October $72.50 calls at the ask of $1.70. Not a large number of contracts but interesting none the less. That makes for a transaction value of almost $235,000.
Molson Coors Brewing (TAP) is currently trading at $71.89 up 31 cents on the day, though well off its earlier low of $71.01 since the call buying happened. TAP has a 52 week high of $75.61, and a low of $49.18 for the year. It’s traded 441,000 shares today so far, on track for higher than daily average volume, which is 1.24 million shares.
Molson Coors Brewing (TAP)doesn’t announce quarterly earnings until early November, so this call buy is not based on earnings leak. As usual, it’s likely an impending analyst upgrade coming soon. In this case we’re guessing Morgan Stanley who has a current price target of just $58 from back in May!