Goldman Sachs Suggests Buying Put Spreads on Applied Materials
August 24, 2011 9:39 AM
Goldman Sachs is out with a research note this morning, where it suggests that traders buy put spreads on Applied Materials (NASDAQ: AMAT) ahead of earnings.
The Goldman Sachs analyst expects AMAT to guide revenues for next quarter down 10% to 15% qoq, versus Street expectations of down 4% qoq. Novellus (NASDAQ: NVLS), a peer of AMAT, saw 2Q11 orders decline 25% qoq, and guided 3Q11 orders to be flat to down 20% qoq.
Another competitor, KLA-Tencor (NASDAQ: KLAC), guided 3Q orders down 35% qoq at the mid-point and noted that industry fundamentals had declined in the two weeks since SEMICON.
The analysts suggest buying the September $12/12 put spread for $0.74.
Applied Materials, Inc. provides manufacturing equipment, services and software to the global semiconductor, flat panel display, solar photovoltaic and related industries.
