Analyst: Symantec's Unusual Call Buying Could Mean Cheap Valuation, Potential for $1B Buyback
During Wednesday's trading session, shares of Symantec (NASDAQ: SYMC) saw increased strength amid a large block trade in the January $17.50 call options.
Obviously, one investor or investor's fund either believes the company will announce something positive by January 2013 that will greatly increase the share price, or is betting that the future share price will be significantly higher than it is now, likely based on fundamentals.
Benzinga spoke to a couple different analysts to get their take on this unusual options activity.
One analyst Benzinga spoke to said that he does not believe that the company is a takeover target, but he does believe that the stock has a very cheap valuation and is trading towards the lower end of the historical range. He also stated an outside chance of a capital structure change like a dividend, citing Dell's (NASDAQ: DELL) dividend initiation yesterday.
Another analyst Benzinga spoke with said, as well as an attractive valuation, that the $1 billion unsecured note offering announced on June 11th would be used to pay the $1 billion due in 2013, as the company stated in its release. However, he also said that the company could likely announce, with its cash on hand, a $1.2 billion stock buyback program, which would retire about 10% of the shares outstanding.
Currently, shares of Symantec is trading down about 1.4% at $14.36 per share.
Symantec is a global provider of security, storage, and systems management solutions that help businesses and consumers secure and manage their information.
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