Now Could Be the Perfect Time to Buy CBS Calls

Short interest makes up a hefty 22.4% of VIAC's available float

Digital Content Manager
Feb 4, 2021 at 10:59 AM
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The shares of CBS Corporation (NASDAQ:VIAC) are experiencing a brief pause from their long-term outperformance this morning, last seen at $50.04 after the security received a downgrade from Deutsche Bank. The analyst in coverage cited a "material" change to the price of its shares, which have jumped 73% since November. 

The security has staged an impressive recovery on the charts over the past year, more than quadrupling off a March 18, 11-year low of $10.10, to a Jan. 27, three-year high of $58.68. Shares have been cooling off since that peak, though, with the $52 mark now emerging as a potential area of resistance. In the last nine months, VIAC has added 204.8%.

Analysts were pessimistic towards the security coming into today, with 12 of the 19 in question carrying a tepid "hold" or worse rating. Plus, the stock's 12-month consensus target price of $35.79 is a 29.5% discount to current levels, suggesting the equity is well overdue for a fresh round of upgrades and/or price-target hikes.

Shorts sellers are climbing on top of VIAC, too. Short interest rose 5.7% in the last two reporting periods, and now the 121.25 million shares sold short account for a whopping 22.4% of the stock's available float, or nearly two weeks' worth of pent-up buying power.

The options pits reflect that pessimism, with puts popular. This is per the security's 10-day put/call volume ratio of 2.82 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 94% of readings from the past year. This means puts are being picked up at a quicker-than-usual pace, leaving the door wide open for call traders to enter the ring.

 

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