Paper bought 1900 DFT July 20 Puts for $.65 (14.2 times usual volume) when stock was trading $23.67
Paper bought 1000 RT May 7.5 Puts for $.35 (33.5 times usual volume) when stock was trading $7.24
Paper bought 9971 SNE March 14 Puts for $.05 when stock was tradung $15.80
Paper bought 1754 DK March 35 Puts for $.30 (14.9 times usual volume) when stock was trading $39.04
Paper bought 3671 KMI April 35 Puts for $.35 when stock was trading $37.40

Paper bought 5000 GOL July 7.5 Calls for $.55 (91.3 times usual volume) when stock was trading $6.73
Paper bought 500 JNK June 25 Calls for $15.90 (3.1 times usual volume) when stock was trading $40.84
Paper bought 1350 PDS April 9 Calls for $.15 (9.4 times usual volume) when stock was trading $8.06
Paper bought 1360 FOE July 7.5 Calls for $.225 (4.9 times usual volume) when stock was trading $6.80
Paper bought 900 HOGS June 12.5 Calls for $.75 (2.4 times usual volume) when stock was trading $12.77

Paper bought 5000 GOL July 7.5 Calls for $.55 (91.3 times usual volume) when stock was trading $6.73
Paper bought 5000 FNP April 19 Calls for $.90 (2.7 times usual volume) when stock was trading $18.76
Paper bought 6388 JDSU March 14 Puts for $.35 (2.7 times usual volume) when stock was trading $14.09
Paper sold 7500 SVU April 4 Straddles for $.55 (5.1 times usual volume) when stock was trading $4.02
Paper sold 3997 EXAS April 15 Calls for $.35 (6.8 times usual volume) when stock was trading $10.90

In the afterhours session the stock popped to $14.55. Lets say the stock settles here, then the trader that bought those Call Spread would profit $720,000, not a bad return for 2 weeks This is way I trade options, because I can get a double or a triple on my money with a small movement in the underlying stock. I am working to build an Unusual Options Activity Scanner for the retail audience that will filter out 90% of the noise and show the best 20-50 trades in real-time with real-money so stay tuned.

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Andrew Keene
President/Founder
Andrew@KeeneOnTheMarket.com

In the category of profitability DG performs with its peers with respect to gross margins, but outperforms in the category of operating margins; here DG is better than 83% of its peers. This relates to the ability of DG to control its expenses. On a related note, management effectiveness with respect to ROE (return on equity) is also impressive. DG is able to reinvest its earnings very efficiently. DG has a higher ROE than 82% of its peer group. This makes DG more attractive to investors when compared to its peers. Management is a key variable for DG, especially given the fact that the company has chosen to increase its long-term debt by 11% since Q3 2012.

Another metric to look at is DG’s PEG ratio. A PEG ratio puts forward EPS and growth into prospective. PEG ratios under one are generally accepted to be attractive and the opposite for over  one. This ratio is highly a function of and dependent on forward estimates, which can be a weakness, but is still an interesting metric. Wall Street is expecting EPS to grow at 18.5%. Taking DG’s forward PE of 14.8x and dividing it by 18.5 (which represents 18.5% EPS growth) yields a PEG ratio of 0.8x. This means that forward earnings may be ‘cheap’ with respect to growth expectations. It is also interesting to note that the average PEG ratio in DG’s peer group is 1.14.

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salerno.mark.a@gmail.com