Hotel Stock Eyes 5 Straight Wins After Earnings Beat

The equity remains down 17% year-to-date, though

Assistant Editor
Nov 4, 2020 at 10:07 AM
facebook twitter linkedin


The shares of Hilton Hotels Corporation (NYSE: HLTare up 5.8% at $93.13 this morning, after the hotel chain reported third-quarter earnings that came in just above analysts' estimates. Revenue, meanwhile, finished below Wall Street's forecasts, although comparable revenue per available room fell by more than 60% from one year ago.  The surprise profit beat comes from cost-cutting measures, and signals a gradual recovery for the hotel industry.

Today's positive price action has Hilton stock well on its way to five straight days of gains. The shares' 80-day moving average has stepped up as support recently, helping HLT to a nearly 39% six-month gain. Longer term though, the equity has shed 17% in 2020.

Options traders have been targeting calls with gusto. The security sports a 50-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all but 76% of readings in its annual range. This suggests a heavier-than-usual appetite for long calls of late.

With earnings out of the way, now looks like the perfect time to enter on HLT with options amid a volatility crush. The security's Schaeffer's Volatility Index (SVI) of 59% sits in the relatively low 18th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment.

What This Election Year Means for Stocks

Ipad with I voted sticker

  


 
Special Offers from Schaeffer's Trading Partners