Earnings Preview: Ambarella, Inc., AutoZone, Inc., and Best Buy Co., Inc.

Analyzing recent option activity on Ambarella Inc (AMBA), AutoZone, Inc. (AZO), and Best Buy Co Inc (BBY)

by Griffin Kruse

Published on Mar 2, 2015 at 2:11 PM
Updated on Jun 24, 2020 at 10:16 AM

Among the stocks gearing up to report earnings tomorrow are semiconductor issue Ambarella Inc (NASDAQ:AMBA), car parts retailer AutoZone, Inc. (NYSE:AZO), and home electronics retailer Best Buy Co Inc (NYSE:BBY). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on AMBA, AZO, and BBY.

  • AMBA, which will release its fourth-quarter earnings report Tuesday night, has been a technical outperformer, with the shares up a staggering 184.5% -- including a 7.1% gain to $61.46 today-- since hitting an annual low of $21.60 on May 9. Accordingly, call activity is popular in Ambarella Inc's options pits, as its 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.52 sits higher than four-fifths of all similar readings taken over the past year. Meanwhile, in the session following its last seven earnings reports, the shares of AMBA have gained an average of 1.4%. Traders are paying historically fair prices for their near-term bets on the stock, as its Schaeffer's Volatility Index (SVI) of 60% sits in the 46th percentile of all similar readings taken over the past year.

  • AZO has also been on a hot streak, with the shares advancing 31% from their Oct. 15 yearly low of $491.93 to hit $644.48. In fact, the equity notched an all-time best of $651.95 on Friday. In AutoZone, Inc.'s options pits, bullish sentiment is prevalent ahead of tomorrow morning's fiscal second-quarter earnings release. Specifically, the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.28 sits in the 80th percentile of its annual range. Traders hoping for a positive post-earnings move from AZO have history on their side:- in the session following its last six earnings reports, the stock has added an average of 1.7%, including a 4.3% gain this past December. Historically speaking, short-term speculators are paying expensive prices for their bets on AZO, as its SVI of 22% sits in the 80th percentile of all similar readings from the past year.

  • The shares of BBY have fallen recently, with the stock down about 1% year-to-date to hit $38.58, despite a 1.3% gain today. However, calls are fairly prominent in the options pits, as Best Buy Co Inc's 50-day ISE/CBOE/PHLX call/put volume ratio of 1.91 sits in the 61st percentile of all similar readings taken annually. The company, which will report fourth-quarter earnings tomorrow morning, has not performed well, on average, in the session following its last five earnings reports. Drilling down, the shares have only enjoyed a positive post-earnings trading session twice out of the last five times, shedding an average of about 1.7%. Near-term options for the security are available for below-average prices, as its SVI of 42% sits in the 30th percentile of its annual range.

A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

Access your FREE insider report before it's too late!


  
 
 

Partnercenter