Investors Buy Large Volume of Comcast Call Options (NASDAQ:CMCSA)

Key Points

• Comcast saw unusual options activity on Monday, with investors buying 97,039 call options — about 220% above the average daily volume. This suggests traders were positioning for upside in the stock.
• The stock rose 5.7% to $24.50 on heavy trading volume, but it remains well below its 12-month high of $36.66. Comcast also trades at a low P/E of 4.83 and offers a 5.4% dividend yield.
• Recent earnings topped expectations, with Comcast reporting $0.79 EPS versus the $0.73 estimate and revenue of $31.46 billion, up 5.3% year over year. Analysts currently rate the stock a consensus Hold with a target price of $34.32.

Comcast Corporation (NASDAQ:CMCSA - Get Free Report) was the target of some unusual options trading activity on Monday. Investors acquired 97,039 call options on the stock. This represents an increase of 220% compared to the average volume of 30,319 call options.

Hedge Funds Weigh In On Comcast

Several institutional investors and hedge funds have recently modified their holdings of CMCSA. Western Wealth Management LLC lifted its stake in Comcast by 421.3% in the first quarter. Western Wealth Management LLC now owns 71,828 shares of the cable giant's stock valued at $2,062,000 after buying an additional 58,049 shares in the last quarter. First National Bank of Mount Dora Trust Investment Services increased its position in shares of Comcast by 7.9% during the first quarter. First National Bank of Mount Dora Trust Investment Services now owns 136,782 shares of the cable giant's stock worth $3,927,000 after acquiring an additional 9,976 shares in the last quarter. Wealthquest Corp raised its holdings in shares of Comcast by 15.9% during the first quarter. Wealthquest Corp now owns 8,714 shares of the cable giant's stock worth $250,000 after acquiring an additional 1,195 shares during the period. Parallel Advisors LLC lifted its position in Comcast by 20.3% in the 1st quarter. Parallel Advisors LLC now owns 53,629 shares of the cable giant's stock valued at $1,540,000 after acquiring an additional 9,064 shares in the last quarter. Finally, NewEdge Advisors LLC boosted its stake in Comcast by 35.6% in the 1st quarter. NewEdge Advisors LLC now owns 469,089 shares of the cable giant's stock worth $13,468,000 after purchasing an additional 123,151 shares during the period. 84.32% of the stock is currently owned by institutional investors and hedge funds.

Comcast Trading Up 5.7%

Shares of NASDAQ CMCSA traded up $1.32 during midday trading on Monday, reaching $24.50. 103,564,216 shares of the stock were exchanged, compared to its average volume of 34,048,797. Comcast has a 12 month low of $22.13 and a 12 month high of $36.66. The company has a market capitalization of $87.50 billion, a price-to-earnings ratio of 4.83, a P/E/G ratio of 1.89 and a beta of 0.68. The company has a debt-to-equity ratio of 1.01, a current ratio of 0.87 and a quick ratio of 0.87. The business has a 50-day simple moving average of $25.29 and a two-hundred day simple moving average of $28.04.

Comcast (NASDAQ:CMCSA - Get Free Report) last released its quarterly earnings data on Thursday, April 23rd. The cable giant reported $0.79 EPS for the quarter, beating analysts' consensus estimates of $0.73 by $0.06. The business had revenue of $31.46 billion during the quarter, compared to analysts' expectations of $30.42 billion. Comcast had a net margin of 15.00% and a return on equity of 15.47%. The firm's quarterly revenue was up 5.3% on a year-over-year basis. During the same quarter in the prior year, the company earned $1.09 EPS. As a group, equities research analysts expect that Comcast will post 3.53 EPS for the current year.

Comcast Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, July 22nd. Stockholders of record on Wednesday, July 1st will be given a dividend of $0.33 per share. The ex-dividend date of this dividend is Wednesday, July 1st. This represents a $1.32 dividend on an annualized basis and a dividend yield of 5.4%. Comcast's dividend payout ratio (DPR) is currently 25.98%.

Analyst Upgrades and Downgrades

A number of research firms have commented on CMCSA. UBS Group reaffirmed a "neutral" rating on shares of Comcast in a report on Tuesday, June 23rd. Zacks Research upgraded Comcast from a "strong sell" rating to a "hold" rating in a research report on Tuesday, March 31st. The Goldman Sachs Group reaffirmed a "neutral" rating and set a $29.00 price objective on shares of Comcast in a research note on Thursday, April 23rd. Moffett Nathanson cut their target price on Comcast from $53.00 to $52.00 and set a "buy" rating on the stock in a research note on Tuesday, June 16th. Finally, KeyCorp restated a "sector weight" rating on shares of Comcast in a report on Thursday, April 23rd. Nine equities research analysts have rated the stock with a Buy rating, sixteen have given a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the company currently has an average rating of "Hold" and a consensus target price of $34.32.

Key Stories Impacting Comcast

Here are the key news stories impacting Comcast this week:

• Positive Sentiment: Comcast’s announced tax-free spin-off of NBCUniversal and Sky into a separate media company is being seen as a major value-unlocking event for shareholders. Reuters article
• Positive Sentiment: Analysts and traders are speculating that the breakup could spark a broader wave of media consolidation and potential takeover interest in the newly separated assets. Barron’s article
• Neutral Sentiment: Comcast also drew unusually heavy call-option buying, suggesting traders are positioning for more upside, though this does not change fundamentals by itself.
• Negative Sentiment: The announcement is pressuring other telecom stocks, reflecting industry disruption concerns and a potential read-through that could weigh on peers. Invezz article

About Comcast

Comcast Corporation NASDAQ: CMCSA is a diversified global media and technology company headquartered in Philadelphia, Pennsylvania. Its principal operations are organized around Comcast Cable, which provides broadband internet, video, voice and wireless services to residential and business customers in the United States under the Xfinity and Comcast Business brands, and NBCUniversal, a media and entertainment group that develops, produces and distributes content across broadcast and cable networks, film, and streaming platforms.

NBCUniversal's assets include the NBC broadcast network, a portfolio of cable channels, Universal Pictures and other film and television production businesses, and the Peacock streaming service.

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