Alcoa (NYSE:AA) Stock Sees Unusually High Call Option Buying

Key Points

• Unusual options activity: Traders purchased 27,444 Alcoa call options, 65% above the average volume of 16,601 contracts.
• Mixed stock performance: Alcoa shares rose $0.66 to $38.56, well below the 50-day and 200-day moving averages of $45.78 and $54.91, respectively.
• Earnings beat and analyst caution: Alcoa reported quarterly EPS of $1.82, exceeding estimates by $0.31, while analysts maintained an overall “Hold” rating with an average price target of $58.23.

Alcoa (NYSE:AA - Get Free Report) was the recipient of some unusual options trading on Monday. Traders acquired 27,444 call options on the stock. This is an increase of 65% compared to the average volume of 16,601 call options.

Alcoa Price Performance

Shares of AA traded up $0.66 during mid-day trading on Monday, reaching $38.56. The company had a trading volume of 1,902,755 shares, compared to its average volume of 5,845,535. Alcoa has a twelve month low of $35.12 and a twelve month high of $84.38. The company's 50-day moving average is $45.78 and its 200-day moving average is $54.91. The company has a debt-to-equity ratio of 0.58, a current ratio of 2.31 and a quick ratio of 1.66. The company has a market capitalization of $10.18 billion, a P/E ratio of 6.66, a P/E/G ratio of 0.56 and a beta of 1.74.

Alcoa (NYSE:AA - Get Free Report) last issued its quarterly earnings results on Thursday, October 15th. The industrial products company reported $1.82 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.51 by $0.31. The business had revenue of $3.70 billion for the quarter, compared to the consensus estimate of $3.77 billion. Alcoa had a net margin of 10.77% and a return on equity of 24.58%. The firm's quarterly revenue was up 23.7% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.88 EPS. On average, equities analysts anticipate that Alcoa will post 6.70 EPS for the current year.

Alcoa Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, November 13th. Shareholders of record on Tuesday, October 27th will be issued a $0.10 dividend. The ex-dividend date is Tuesday, October 27th. This represents a $0.40 annualized dividend and a yield of 1.0%. Alcoa's dividend payout ratio (DPR) is 6.91%.

Insider Transactions at Alcoa

In other news, EVP Renato Bacchi sold 700 shares of the company's stock in a transaction dated Monday, August 31st. The stock was sold at an average price of $51.02, for a total value of $35,714.00. Following the transaction, the executive vice president owned 74,930 shares in the company, valued at $3,822,928.60. This represents a 0.93% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, EVP Tammi Jones sold 15,628 shares of the stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $50.60, for a total transaction of $790,776.80. Following the completion of the sale, the executive vice president directly owned 39,819 shares of the company's stock, valued at $2,014,841.40. This trade represents a 28.19% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing.

Institutional Trading of Alcoa

A number of large investors have recently made changes to their positions in the company. Visionary Horizons LLC bought a new stake in shares of Alcoa during the third quarter worth $261,000. Root Financial Partners LLC bought a new stake in shares of Alcoa in the third quarter valued at about $42,000. Quadrant Capital Group LLC lifted its holdings in shares of Alcoa by 2.7% in the third quarter. Quadrant Capital Group LLC now owns 23,979 shares of the industrial products company's stock valued at $995,000 after purchasing an additional 624 shares in the last quarter. Shelton Wealth Management LLC boosted its position in shares of Alcoa by 24.7% during the third quarter. Shelton Wealth Management LLC now owns 17,693 shares of the industrial products company's stock worth $743,000 after buying an additional 3,507 shares during the period. Finally, Assenagon Asset Management S.A. boosted its position in shares of Alcoa by 1,498.8% during the third quarter. Assenagon Asset Management S.A. now owns 717,838 shares of the industrial products company's stock worth $30,149,000 after buying an additional 672,939 shares during the period.

Analyst Ratings Changes

Several analysts recently issued reports on AA shares. Zacks Research raised shares of Alcoa from a "strong sell" rating to a "hold" rating in a report on Monday, September 14th. Bank of America decreased their price target on shares of Alcoa from $57.00 to $51.00 and set an "underperform" rating for the company in a report on Thursday, July 9th. UBS Group lowered their price target on Alcoa from $80.00 to $68.00 and set a "buy" rating on the stock in a research report on Tuesday, June 30th. Barclays initiated coverage on Alcoa in a research report on Wednesday, October 14th. They set an "overweight" rating and a $55.00 price objective for the company. Finally, Weiss Ratings restated a "hold (c+)" rating on shares of Alcoa in a research note on Monday, September 14th. Six research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock currently has an average rating of "Hold" and an average price target of $58.23.

About Alcoa

Alcoa Corporation NYSE: AA is a global producer of bauxite, alumina and aluminum. Its operations span the aluminum value chain, including bauxite mining, alumina refining, aluminum smelting, casting and the production of value-added aluminum products. These materials serve customers in industries such as transportation, building and construction, packaging, aerospace and industrial manufacturing.

The company operates across multiple regions, with assets and activities in North America, South America, Europe, Australia and other international markets.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.