Paper bought 4687 PCS March 28th 11 Calls for $.15 when stock was trading $10.60
Paper bought 10,000 HUM April 67.5-60 Put Spread for $2.95 (6.1 times usual volume) when stock was trading $68.57
Paper sold 2000 SPRD May 19 Puts for $1.20 (4.1 times usual volume) when stock was trading $19.50
Paper bought 1910 JNPR May 20 Calls for $.68 when stock was trading $18.68
Paper sold 1000 BMC April 47 Calls for $1 (5.1 times usual volume) when stock was trading $45.44

GES shares are lower by over 4.5% this morning after the company issued disappointing guidance for Q1 and 2014. GES issued EPS guidance in the range of $0.05-0.10 when the analyst community was expecting $0.29. In related news, Wedbush Securities maintained a buy on GES shares, even after the gap down today.

JBL shares are currently down about 4.4%. The firm missed by roughly a penny, but the forward guidance is really why Wall Street is selling. For Q3, the firm expects revenues in the range of $4.3 to $4.5 B and EPS between $0.50-0.58. The analyst community was expecting $0.61 and 4.51B.

salerno.mark.a@gmail.com

Paper bought 500 RES June 17.3 Puts for $2.30 (8.8 times usual volume) when stock was trading $15.81
Paper bought 9665 HUM April 65 Puts for $1 (3.3 times usual volume) when stock was trading $70.44
Paper bought 1500 AMJ April 43 Puts for $.70 (3.2 times usual volume) when stock was trading $43.65
Paper bought 770 CNQ May 65 Puts for $2 (7.8 times usual volume) when stock was trading $69.26
Paper bought 4000 GGB June 7 Puts for $.30 when stock was trading $7.52

Paper bought 1000 MPO May 7.5 Calls for $1.40 (3.5 times usual volume) when stock was trading $8.54
Paper bought 1000 SOXL April 36 Calls for $32.5 (12.2 times usual volume) when stock was trading $37.57
Paper bought 4890 TRI May 35 Calls for $.35 (53.1 times usual volume) when stock was trading $32.31
Paper bought 1650 IR June 60 Calls for $1 (6.2 times usual volume) when stock was trading $56.47
Paper bought 2000 RFMD May 5 Calls for $.40 (3.1 times usual volume) when stock was trading $4.96

Paper bought 8760 DAL Sep 17 Calls for $1.87 (2.3 times usual volume) when stock was trading $17.03
Paper bought 19,361 S Aug 5 Calls for $.15 (5.1 times usual volume) when stock was trading $6.05
Paper bought 9925 GM Jan 2014 30 Calls for $2.74 when stock was trading $29.23
Paper sold 5000 May 45 Puts for $.975 (3.0 times usual volume) when stock was trading $46.30
Paper sold 1520 SNSS July 5 Puts for $.60 (13.6 times usual volume) when stock was trading $5.50

A big factor working in Delta’s favor is their incredibly strong 5-year growth rate. Delta has grown at 20% in comparison to the industry average of 4%. Historically, they have had much higher profit margins and a slightly higher gross margin compared to the overall industry. Their ability to consistently show these types of ratios shows their sustainability down the road. 

Mutual and hedge fund holdings of a company can be strongly indicative of future growth.  As of March, 54% of hedge funds own DAL, up 24% from the previous quarter. Lastly, DAL’s P/E ratio is approximately the mean for the airline industry indicating that it is still growing but also not yet overpriced. When comparing

Delta’s stock price to other airlines with a similar P/E, Delta’s stock price relatively cheap and allows for future growth.

The Trade: I bought the DAL Sep 20 Calls for $.76
Risk: $76 per 1 lot
Reward: Unlimited
Breakeven: $20.76

Greeks of this Trade:
Delta: Long
Gamma: Long
Vega: Long
Theta: Short

—
Andrew Keene
President/Founder
Andrew@KeeneOnTheMarket.com

The analyst community has been overwhelmingly bullish on FDX. There are currently no sell ratings, 10 holds, and 18 buys. The average price target is $114.

The options with 30 days till expiration are implying a 5% move up or down by their expiration, at 68% confidence level.

salerno.mark.a@gmail.com