Earnings Preview: Ford, GoPro, and Sirius XM

Analyzing recent option activity ahead of earnings from Ford Motor Company (F), GoPro Inc (GPRO), and Sirius XM Holdings Inc. (SIRI)

Apr 27, 2015 at 1:05 PM
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Among the stocks gearing up to report earnings tomorrow are car maker Ford Motor Company (NYSE:F), wearable camera specialist GoPro Inc (NASDAQ:GPRO), and satellite radio provider Sirius XM Holdings Inc. (NASDAQ:SIRI). Below, we'll take the pre-earnings temperature of F, GPRO, and SIRI.

  • F has taken a step back recently, with the shares down about 5% from their March 23 year-to-date high of $16.74 to hover near $15.92. However, options traders have shown a preference for Ford Motor Company calls ahead of earnings tomorrow morning. During the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 3.17 F calls have been bought to open for every put. On the earnings front, F has staged a single-session post-earnings swing of 1.9%, on average, over the past eight quarters. The stock's near-term straddle suggests speculators are pricing in a 3.2% move. Traders are paying relatively modest prices for their short-term bets on the stock, as its Schaeffer's Volatility Index (SVI) of 21% ranks in the 31st percentile of its annual range.
  • GPRO has been an underperformer as well, with the shares down 28.2% year-to-date to linger at $45.35. Traders have favored GoPro Inc calls over puts ahead of tomorrow night's earnings releaseOver the past 10 days at the ISE/CBOE/PHLX, 2.46 GPRO calls have been bought to open for every put. The brokerage bunch is still mostly bullish on GoPro Inc too, as eight out of 13 covering analysts rate it a "buy" or "strong buy," with only one "strong sell" recommendation to be found. Meanwhile, GPRO has spent two of its three post-earnings sessions in the red, with the shares experiencing an average single-session post-earnings swing of 13.6% over that same period. The equity's near-term straddle suggests traders are anticipating a 9.9% move. Near-term options on GPRO are available for historically fair prices, as its SVI of 67% is higher than 42% of all similar readings from the past year.
  • On the other hand, SIRI has stair-stepped higher over the past year, with the shares up 27.1% to rest near $3.96 -- within striking distance of an annual high of $4.04, tagged in early March. Sentiment in the options pits has been bullish heading into tomorrow morning's quarterly release, as Sirius XM Holdings Inc.'s 10-day ISE/CBOE/PHLX call/put volume ratio of 41.89 is higher than 90% of all equivalent readings from the past 12 months. Elsewhere, the security enjoyed a 2.2% post-earnings pop in February, and has made a move of 2.2%, on average, after its last eight earnings reports. The security's near-term straddle, meanwhile, is pricing in a 3.8% swing. Traders are paying relatively inexpensive prices for their short-term bets on the equity, as its SVI of 25% ranks in the 23rd percentile of its annual range. 
 

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