OptionPundit

Category: Insider Watch

  • The Usual Unusual : American Tower Corp (AMT)

    While looking for unusual activity, I found this interesting company called American Tower Corp (AMT). Yesterday, 20,539 March 08 37.5 put contracts exchanged hands. When compared with 1,118 open interests, this is a huge 18times volume in a day that raised my eyebrows.

    amt-375-put-trade.png AMT is to announce Q4 earnings on Feb 25th before market opens. Wall street is expecting $0.08/shares on $370million revenues, so to me this transaction suggest action around earnings (either before or after). One thing which I can’t pin is this, is this a single purchase/sale? So, I looked at 1 min intra-day chart of AMT, and it seems this was one trade i.e. 20,000 contracts in one go. Assuming $1.25 average price, this is a $2.5million dollar deal which will only make money if the stock falls below $36.25 vs today’s price $38.84 by March ’08 expiration.

    Who is AMT:

    American Tower Corporation is a wireless and broadcast communications infrastructure company with a portfolio of over 22,000 owned communications sites. The Company’s portfolio includes approximately 20,000 owned tower sites in the United States and over 2,500 in Mexico and Brazil. In addition, to its owned tower sites, the Company offers access to over 10,000 rooftop and tower sites in the United States that it manages for third parties. American Tower Corporation also operates in-building distributed antenna systems in malls and casino/hotel resorts. Its primary business is leasing antenna space on multi-tenant communications sites to wireless service providers and radio and television broadcast companies. The Company operates in two business segments: rental and management and network development services.

    According to msn money, the earnings are expected to grow 293.7% in 07 and over 62% in 08. Those are rich growth rates. Price/Earnings ratio is 142 vs 17 for the industry/sector, with PEG over 3.5. No doubts, earning estimates are trending higher (about 14% up vs 60days ago’s estimates) so analysts are expecting upsides. It’s also a highly ranked stock on momentum list that is expected to outperform general markets by a wide margin.

    Whatever it is, it seems investors are betting for high growth and in case it falters, the stock might be punished hard which is what this 20k trade suggests to me. What does it suggest to you?

    Profitable trading, OP

  • Insider Watch- General Growth properties Inc , GGP

    So Who is buying General Growth properties Inc, GGP?

    This caught my attention over the weekend when I saw some serious money being put on the table. Over $26millions to be precise, during last week.

    I scan insider trades to get hints about potential long terms bullish plays. I don’t generally look for selling signal as selling can be attributed to several reasons, but buying only has only one reason i.e. the insider(s) thinks the stock is going to go up. But how far is the time horizon, that’s open to interpretations. However, This scan was very interesting scan that was worth sharing.

    So, let’s step back and think for a minute.

    Mr. Bernard Freibaum, who is the Chief Financial Officer (CFO), Excecutive Vice President(EVP) GGP Transactionand director of GGP has made a direct purchase of over $26.6millions at a average share price of $62.5-$63/shares (currently the shares trades nearly at that price).

    Mr BernardHere is a profile of Mr Bernard, as per the company website, he joined in 1993 and has extensive expertise in financial sector.

    GGP CompensationAnd per definitive proxy statement Def 14A filed on March 29th, Mr. Bernanrd earns $5,011,488 in total compensations. Now investing $26 millions is serious money. Being a financial wizard, Mr Bernanrd, I am sure, knows very well on what he is investing. What’s my take? watch-out for GGP with a potential bullish bias, but how long and when, that’s anybody’s guess. When I open a trade to play, I shall share via alerts to the registered users.Discuss it here- OP’s Discussion Forum

    Profitable trading, OptionPundit