Investors Purchase Large Volume of Semtech Call Options (NASDAQ:SMTC)

Key Points

• Unusual options activity: Investors bought 6,195 call options on Semtech (SMTC) — a 331% increase over typical call volume, signaling elevated bullish interest in the stock.
• Solid quarter but mixed profitability: Semtech reported $0.44 EPS (vs. $0.43 expected) and revenue of $274.4M (up 9.3% year-over-year), though it still shows a negative net margin (-3.86%); analysts have largely raised targets and hold a consensus "Moderate Buy" with an average target of $95.71.
• Price action and insider selling: SMTC traded at $107.11 midday with volume below average, and insiders sold about 51,384 shares (~$4.32M) under pre-arranged Rule 10b5-1 plans while owning roughly 0.48% of the company.

Semtech Corporation (NASDAQ:SMTC - Get Free Report) was the target of some unusual options trading activity on Monday. Investors purchased 6,195 call options on the stock. This represents an increase of 331% compared to the typical volume of 1,439 call options.

Semtech Trading Down 0.6%

NASDAQ:SMTC traded down $0.61 during midday trading on Monday, reaching $107.11. 314,571 shares of the stock traded hands, compared to its average volume of 1,963,953. The company has a fifty day moving average of $85.49 and a 200 day moving average of $77.68. Semtech has a 12 month low of $24.05 and a 12 month high of $110.55. The company has a debt-to-equity ratio of 0.89, a quick ratio of 1.66 and a current ratio of 2.37. The stock has a market capitalization of $9.96 billion, a P/E ratio of -244.26 and a beta of 2.06.

Semtech (NASDAQ:SMTC - Get Free Report) last posted its quarterly earnings results on Monday, March 16th. The semiconductor company reported $0.44 EPS for the quarter, beating analysts' consensus estimates of $0.43 by $0.01. Semtech had a negative net margin of 3.86% and a positive return on equity of 18.09%. The company had revenue of $274.40 million during the quarter, compared to analyst estimates of $273.14 million. During the same period in the prior year, the business posted $0.40 EPS. The firm's revenue was up 9.3% compared to the same quarter last year. On average, research analysts predict that Semtech will post -0.02 EPS for the current year.

Wall Street Analysts Forecast Growth

SMTC has been the subject of a number of recent research reports. Benchmark boosted their price objective on shares of Semtech from $115.00 to $120.00 and gave the stock a "buy" rating in a report on Tuesday, April 14th. Robert W. Baird boosted their price objective on shares of Semtech from $88.00 to $110.00 and gave the stock an "outperform" rating in a report on Tuesday, March 17th. B. Riley Financial boosted their price objective on shares of Semtech from $115.00 to $122.00 and gave the stock a "buy" rating in a report on Thursday. Morgan Stanley boosted their price objective on shares of Semtech from $75.00 to $85.00 and gave the stock an "equal weight" rating in a report on Monday, March 16th. Finally, TD Cowen restated a "buy" rating on shares of Semtech in a report on Tuesday, February 24th. Fourteen equities research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average target price of $95.71.

Insider Buying and Selling at Semtech

In other Semtech news, CEO Hong Q. Hou sold 2,000 shares of Semtech stock in a transaction that occurred on Friday, April 10th. The shares were sold at an average price of $90.11, for a total transaction of $180,220.00. Following the completion of the sale, the chief executive officer directly owned 73,228 shares in the company, valued at $6,598,575.08. The trade was a 2.66% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Mark Lin sold 974 shares of Semtech stock in a transaction that occurred on Wednesday, April 1st. The shares were sold at an average price of $78.42, for a total transaction of $76,381.08. Following the sale, the chief financial officer owned 33,343 shares of the company's stock, valued at approximately $2,614,758.06. The trade was a 2.84% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 51,384 shares of company stock valued at $4,321,300 over the last quarter. Company insiders own 0.48% of the company's stock.

Institutional Investors Weigh In On Semtech

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Banque Cantonale Vaudoise bought a new stake in Semtech during the 1st quarter valued at $33,000. Hantz Financial Services Inc. raised its holdings in Semtech by 243.2% during the 3rd quarter. Hantz Financial Services Inc. now owns 508 shares of the semiconductor company's stock valued at $36,000 after buying an additional 360 shares during the last quarter. Salomon & Ludwin LLC bought a new stake in Semtech during the 3rd quarter valued at $41,000. AlphaQuest LLC raised its holdings in Semtech by 42.5% in the 3rd quarter. AlphaQuest LLC now owns 580 shares of the semiconductor company's stock worth $41,000 after purchasing an additional 173 shares in the last quarter. Finally, Jones Financial Companies Lllp raised its holdings in Semtech by 65.5% in the 3rd quarter. Jones Financial Companies Lllp now owns 594 shares of the semiconductor company's stock worth $42,000 after purchasing an additional 235 shares in the last quarter.

Semtech Company Profile

Semtech Corporation is a leading supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms. The company's products address a broad range of applications in the Internet of Things (IoT), data center and telecom, industrial, home automation, automotive, and aerospace markets. Semtech's portfolio includes power management, signal integrity, protection devices, wireless and sensing technologies that enable smarter, more connected systems worldwide.

A core offering from Semtech is its LoRa® technology, a low-power, long-range wireless communication platform that has become a de facto standard for global IoT deployments.

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