For those investors who specialize in call-spread buying, we all know that the gamble can pay off in a big way, but it can also provide an insight into future stock movement. Today it appears as though shares of Cypress Semiconductor Corporation (NASDAQ:CY) are trading up, due to the fact that a single party recently bought 31,000 June 11/13 call spreads yesterday for $0.33 each.
CNBC’s Contributor Dan Nathan reported on this rather large buy, in which the trader will have the option to break even at $11.33, compared to the $9.50 price in which the options were purchased at.
While no one knows for sure why this investor would risk so much money on what seems to be a large increase in share price, Nathan suggests that this trader is hoping for, or even expecting that Cypress Semiconductor Corporation (NASDAQ:CY) will be acquired by a larger company.
The stock is up 4.99% or $0.47 following the news, hitting $9.99 per share. About 3.57M shares traded hands. CY has declined 29.40% since May 26, 2015 and is downtrending. It has underperformed the S&P500 by 27.13%.
From a total of 7 analysts covering Cypress Semiconductor Corporation (NASDAQ:CY) stock, 6 rate it a “Buy”, 0 a “Sell”, and 1 a “Hold”. This means that 86% of the ratings are positive. The highest target price is $21 while the lowest target price is $11. The mean of all analyst targets is $13.17 which is 31.83% above today’s ($9.99) stock price. Cypress Semiconductor Corporation was the topic of 13 analyst reports since August 31, 2015 according to the firm StockzIntelligence Inc. Oppenheimer initiated shares on December 15 with a “Outperform” rating. Topeka Capital Markets maintained CY stock in a recent report from October 23 with a “Buy” rating. Finally, Sterne Agee CRT initiated the stock with a “Buy” rating in a report they issued on a September 9.
The institutional sentiment increased to 1.27 in Q2 2015. It’s up 0.18, from 1.09 in 2015Q2. The ratio increased, as 51 funds sold all their Cypress Semiconductor Corporation shares they owned while 80 reduced their positions. 36 funds bought stakes while 131 increased their total positions. Institutions now own 322.05 million shares which is 8.17% more than the previous share count of 297.72 million in 2015Q2.
Three Bays Capital Lp holds 9.26% of its total portfolio in Cypress Semiconductor Corporation, equating to 21.71 million shares. Lamond Capital Partners Llc owns 1.10 million shares representing 7.01% of their total US portfolio. Moreover, Soros Fund Management Llc has 2.55% of their total portfolio invested in the company, equating to 19.81 million shares. The Massachusetts-based Brookside Capital Management Llc has a total of 2% of their portfolio invested in the stock. Deroy & Devereaux Private Investment Counsel Inc, a Michigan-based fund reported 1.47 million shares owned.
Cypress Semiconductor Corporation is a well-known provider of mixed-signal programmable solutions. The company has a market cap of $3.25 billion. The Company’s offerings include PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP programmable system-on-chip families. It currently has negative earnings. It caters to markets, including industrial, mobile handsets, consumer, computation, data communications, automotive and military.