FFIV Finds New Highs on Investment Buzz

The company also previewed its upcoming investor and analyst strategy

Deputy Editor
Nov 9, 2020 at 10:35 AM
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The shares of F5 Networks Inc (NASDAQ:FFIV) are making big moves today, after hedge fund Elliott Management took stake in the company, making it one of F5's largest investors. The networking company also previewed its upcoming analyst and investor meeting, which will highlight revenue growth and expanding operating margin in its strategy. Additionally, F5 announced $1 billion in share repurchases across the next couple years. At last check, FFIV is up 6.01% at $153.05.

Today's pop earlier helped F5 stock surpass its July 23 annual high of $156.36. Starting the week strong after two-straight weekly wins, the equity is now up 10.5% year-to-date.

A round of upgrades could be on the horizon, if the stock keeps up its momentum, with eight of the 14 analysts flashing a "hold" or worse rating on FFIV. Furthermore, the 12-month consensus price target of $163 is a chip-shot away from current levels. 

An unwinding of short interest could push the security even higher. The 3.74 million shares sold short account for 6.2% of the stock's available float, or five days to cover at its average pace of trading. 

The options pits have been particularly bearish too, as per FFIV's 10-day put/call volume ratio of 3.39 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 93% of readings from the past year, showing a strong penchant for puts in the last two weeks. Today, that sentiment appears to be changing, with over four times as many calls as puts across the tape so far. 

That said, speculating on F5 stock's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 31% stands higher than just 16% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 


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