Call Traders Target Travelers Insurance Stock After Earnings

Travelers reported second-quarter earnings and revenue that topped analyst expectations

Deputy Editor
Jul 20, 2021 at 10:43 AM
facebook twitter linkedin

Travelers Companies Inc (NYSE:TRV) is flat this morning, last seen trading at $1551.29, despite the insurance company posting a second-quarter profit and revenue beat. TRV cited solid growth for its investment income channels, and a dip in catastrophe losses. It also announced an 88 cent quarterly dividend. 

Travelers stock is up 27% year-over-year, but has shed 3.6% in the last three months. TRV's 160-day moving average has contained the pullback though, a trendline that captured a sharp pullback in late June.

Despite the comfortable 12-month lead, analysts have been hesitant to shower Travelers stock with bull notes. Of the 15 in coverage, only four say "strong buy." Meanwhile, the 12-month consensus price target of $162.87 is an 8.5% premium to current levels. 

Options players have been bearish, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TRV sports a 10-day put/call volume ratio of 2.56, which stands higher than 90% of readings in its annual range. This means long puts have rarely been more popular. 

Today though, calls are all the rage. Despite limited absolute volume, calls are trading at six times the average intraday amount. The most popular is the August 150 call, with new positions being bought to open.

Begin the New Year With Schaeffer's 7 FREE 2022 Stock Picks!



Special Offers from Schaeffer's Trading Partners