Investors Buy Large Volume of Put Options on Xerox (NASDAQ:XRX)

Key Points

• Investors bought 1,689 put options on Xerox on Wednesday — roughly a 1,369% increase versus average volume — signaling heightened bearish speculation.
• Analyst coverage is negative with a consensus "Sell" rating and a $2.50 target after downgrades from Weiss, Citigroup and Zacks.
• Xerox shares opened at $1.26 (down 2.3%), reported negative EPS and a high debt-to-equity ratio (8.94), but the company declared a $0.025 quarterly dividend

Xerox Holdings Co. (NASDAQ:XRX - Get Free Report) was the recipient of some unusual options trading activity on Wednesday. Stock traders acquired 1,689 put options on the stock. This represents an increase of approximately 1,369% compared to the average volume of 115 put options.

Wall Street Analyst Weigh In

XRX has been the subject of a number of research reports. Weiss Ratings assumed coverage on shares of Xerox in a research note on Wednesday, January 28th. They set a "sell (d-)" rating for the company. Citigroup reaffirmed a "neutral" rating and set a $2.50 price target (down from $3.50) on shares of Xerox in a research note on Friday, January 30th. Finally, Zacks Research cut Xerox from a "hold" rating to a "strong sell" rating in a research note on Tuesday, March 3rd. One research analyst has rated the stock with a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, Xerox currently has a consensus rating of "Sell" and a consensus target price of $2.50.

Hedge Funds Weigh In On Xerox

Several large investors have recently made changes to their positions in XRX. Hsbc Holdings PLC grew its holdings in Xerox by 64.5% in the 4th quarter. Hsbc Holdings PLC now owns 71,044 shares of the information technology services provider's stock valued at $168,000 after buying an additional 27,848 shares during the last quarter. S Harris Financial Group LLC acquired a new position in shares of Xerox during the fourth quarter worth approximately $25,000. Aristides Capital LLC bought a new stake in shares of Xerox in the fourth quarter valued at approximately $181,000. Invesco Ltd. boosted its position in shares of Xerox by 12.6% in the fourth quarter. Invesco Ltd. now owns 450,416 shares of the information technology services provider's stock valued at $1,067,000 after acquiring an additional 50,550 shares during the period. Finally, Empowered Funds LLC grew its stake in shares of Xerox by 10.2% in the fourth quarter. Empowered Funds LLC now owns 652,289 shares of the information technology services provider's stock worth $1,546,000 after acquiring an additional 60,195 shares during the last quarter. Institutional investors and hedge funds own 85.36% of the company's stock.

Xerox Trading Down 2.3%

NASDAQ:XRX opened at $1.26 on Thursday. The company's 50 day moving average is $1.82 and its 200-day moving average is $2.58. The company has a quick ratio of 0.79, a current ratio of 1.11 and a debt-to-equity ratio of 8.94. Xerox has a 12 month low of $1.26 and a 12 month high of $6.80. The firm has a market cap of $162.06 million, a price-to-earnings ratio of -0.15 and a beta of 1.80.

Xerox (NASDAQ:XRX - Get Free Report) last posted its quarterly earnings data on Thursday, January 29th. The information technology services provider reported ($0.10) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.15 by ($0.25). The firm had revenue of $2.03 billion for the quarter, compared to the consensus estimate of $2.08 billion. Xerox had a negative return on equity of 8.26% and a negative net margin of 14.65%.Xerox's quarterly revenue was up 25.7% on a year-over-year basis. During the same period in the prior year, the company posted $0.36 earnings per share. Equities analysts anticipate that Xerox will post 1.07 EPS for the current year.

Xerox Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Thursday, April 30th. Stockholders of record on Tuesday, March 31st will be given a $0.025 dividend. This represents a $0.10 annualized dividend and a dividend yield of 7.9%. The ex-dividend date of this dividend is Tuesday, March 31st. Xerox's dividend payout ratio (DPR) is currently -1.22%.

Xerox Company Profile

Xerox Holdings Corporation NYSE: XRX is a global provider of document management technology and services. The company designs and manufactures a broad range of multifunction printers, production printers, digital presses and related consumables. In addition to its hardware offerings, Xerox delivers software and workflow automation solutions, managed print services and cloud-based document platforms that help organizations optimize their information-intensive processes.

Founded in 1906 as The Haloid Photographic Company, Xerox pioneered xerographic imaging in the late 1940s, launching the first plain-paper copier in 1959.

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