Silicon Motion Technology (NASDAQ:SIMO) Stock Sees Unusually High Call Option Buying

Key Points

• Unusual options activity: Traders purchased 6,273 call options on Silicon Motion, about 191% above its typical daily call volume of 2,158 contracts.
• Strong institutional support: Several hedge funds increased or initiated positions, and institutional investors collectively own 78.02% of SIMO’s outstanding shares.
• Positive fundamentals and analyst sentiment: SIMO beat quarterly earnings and revenue expectations, with revenue rising 127% year over year. Nine of 10 analysts rate the stock a Buy, with an average price target of $341.43.

Silicon Motion Technology Corporation (NASDAQ:SIMO - Get Free Report) was the recipient of some unusual options trading on Tuesday. Stock traders purchased 6,273 call options on the stock. This represents an increase of approximately 191% compared to the typical daily volume of 2,158 call options.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of SIMO. Wolf Hill Capital Management LP bought a new position in Silicon Motion Technology during the 4th quarter valued at about $53,893,000. Hawk Ridge Capital Management LP grew its stake in shares of Silicon Motion Technology by 48.9% in the first quarter. Hawk Ridge Capital Management LP now owns 1,173,315 shares of the semiconductor producer's stock worth $131,752,000 after acquiring an additional 385,568 shares during the period. Arrowstreet Capital Limited Partnership grew its stake in shares of Silicon Motion Technology by 112.3% in the first quarter. Arrowstreet Capital Limited Partnership now owns 425,697 shares of the semiconductor producer's stock worth $47,802,000 after acquiring an additional 225,221 shares during the period. AIGH Capital Management LLC purchased a new position in shares of Silicon Motion Technology during the first quarter valued at approximately $22,458,000. Finally, Summit Partners Public Asset Management LLC lifted its position in Silicon Motion Technology by 33.7% during the fourth quarter. Summit Partners Public Asset Management LLC now owns 534,932 shares of the semiconductor producer's stock valued at $49,588,000 after purchasing an additional 134,927 shares during the period. Institutional investors and hedge funds own 78.02% of the company's stock.

Analyst Upgrades and Downgrades

Several brokerages have recently weighed in on SIMO. Craig Hallum reissued a "buy" rating and issued a $325.00 price objective on shares of Silicon Motion Technology in a research report on Friday, July 31st. Wedbush raised their price objective on shares of Silicon Motion Technology from $230.00 to $400.00 and gave the stock an "outperform" rating in a research report on Monday, June 22nd. Weiss Ratings upgraded Silicon Motion Technology from a "buy (b-)" rating to a "buy (b)" rating in a report on Friday. Susquehanna increased their target price on Silicon Motion Technology from $275.00 to $350.00 and gave the stock a "positive" rating in a research note on Friday, July 31st. Finally, Wall Street Zen cut Silicon Motion Technology from a "strong-buy" rating to a "buy" rating in a report on Saturday, August 15th. Nine research analysts have rated the stock with a Buy rating and one has given a Hold rating to the company's stock. Based on data from MarketBeat.com, Silicon Motion Technology presently has an average rating of "Moderate Buy" and an average target price of $341.43.

Silicon Motion Technology Stock Up 2.4%

Shares of SIMO traded up $6.83 during mid-day trading on Tuesday, hitting $289.28. 266,862 shares of the company's stock were exchanged, compared to its average volume of 878,242. Silicon Motion Technology has a 52 week low of $79.76 and a 52 week high of $355.00. The stock's 50-day simple moving average is $256.75 and its 200-day simple moving average is $240.65. The firm has a market cap of $9.81 billion, a price-to-earnings ratio of 33.97, a price-to-earnings-growth ratio of 0.49 and a beta of 1.69.

Silicon Motion Technology (NASDAQ:SIMO - Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The semiconductor producer reported $2.43 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.13 by $0.30. The business had revenue of $451.00 million during the quarter, compared to analysts' expectations of $403.41 million. Silicon Motion Technology had a return on equity of 32.04% and a net margin of 22.06%.The firm's revenue for the quarter was up 127.0% compared to the same quarter last year. During the same period in the previous year, the company posted $0.69 earnings per share. Analysts forecast that Silicon Motion Technology will post 10.78 earnings per share for the current fiscal year.

About Silicon Motion Technology

Silicon Motion Technology Corporation is a fabless semiconductor company that designs and develops NAND flash storage controllers and related semiconductor solutions. Its products manage data storage, performance, reliability and power consumption in devices that use NAND flash memory.

The company supplies controllers for client solid-state drives (SSDs), enterprise and industrial storage applications, embedded storage products such as eMMC and UFS, and removable storage including memory cards and USB flash drives.

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