Traders Buy High Volume of Call Options on Microchip Technology (NASDAQ:MCHP)

Key Points

• Unusual options activity: Traders purchased 247,022 call options on Microchip Technology, roughly 1,221% above its typical daily call volume.
• Analyst sentiment remains positive: The stock carries a consensus “Moderate Buy” rating with a $98.67 price target, despite some analysts lowering targets or downgrading their views.
• Shares declined amid solid earnings: MCHP fell to $71.01, below both its 50-day and 200-day moving averages, while its latest quarterly results exceeded revenue and EPS estimates and revenue rose 38% year over year.

Microchip Technology Incorporated (NASDAQ:MCHP - Get Free Report) was the recipient of some unusual options trading on Wednesday. Stock traders purchased 247,022 call options on the stock. This represents an increase of approximately 1,221% compared to the typical daily volume of 18,696 call options.

Insider Transactions at Microchip Technology

In other news, CFO James Bjornholt sold 4,112 shares of the firm's stock in a transaction that occurred on Tuesday, August 25th. The stock was sold at an average price of $75.32, for a total value of $309,715.84. Following the completion of the sale, the chief financial officer directly owned 28,573 shares of the company's stock, valued at $2,152,118.36. This trade represents a 12.58% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.79% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in the company. Resonant Capital Advisors LLC boosted its holdings in Microchip Technology by 0.9% in the first quarter. Resonant Capital Advisors LLC now owns 12,542 shares of the semiconductor company's stock worth $810,000 after acquiring an additional 118 shares in the last quarter. Apella Capital LLC raised its holdings in Microchip Technology by 4.8% during the second quarter. Apella Capital LLC now owns 2,669 shares of the semiconductor company's stock worth $225,000 after buying an additional 122 shares during the last quarter. Bridgewater Advisors Inc. increased its position in shares of Microchip Technology by 4.2% during the second quarter. Bridgewater Advisors Inc. now owns 3,331 shares of the semiconductor company's stock worth $304,000 after acquiring an additional 133 shares in the last quarter. Total Wealth Planning & Management Inc. boosted its stake in Microchip Technology by 3.5% during the 2nd quarter. Total Wealth Planning & Management Inc. now owns 4,225 shares of the semiconductor company's stock valued at $385,000 after purchasing an additional 141 shares during the last quarter. Finally, Texas Capital Bank Wealth Management Services Inc increased its holdings in Microchip Technology by 2.0% during the 2nd quarter. Texas Capital Bank Wealth Management Services Inc now owns 7,513 shares of the semiconductor company's stock worth $685,000 after purchasing an additional 144 shares in the last quarter. Institutional investors and hedge funds own 91.51% of the company's stock.

Analyst Ratings Changes

Several equities analysts have commented on the stock. BMO Capital Markets initiated coverage on shares of Microchip Technology in a report on Friday, August 21st. They issued an "outperform" rating and a $95.00 price objective on the stock. Wells Fargo & Company dropped their price target on Microchip Technology from $95.00 to $88.00 and set an "equal weight" rating for the company in a report on Monday, July 20th. Zacks Research cut Microchip Technology from a "strong-buy" rating to a "hold" rating in a research report on Monday, August 17th. Cantor Fitzgerald restated an "overweight" rating on shares of Microchip Technology in a research note on Wednesday, September 9th. Finally, Weiss Ratings upgraded shares of Microchip Technology from a "hold (c-)" rating to a "hold (c)" rating in a research note on Tuesday, August 11th. Three analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating and eight have given a Hold rating to the stock. According to data from MarketBeat, Microchip Technology currently has a consensus rating of "Moderate Buy" and a consensus price target of $98.67.

Microchip Technology Price Performance

MCHP stock traded down $3.15 during mid-day trading on Wednesday, hitting $71.01. The stock had a trading volume of 5,656,000 shares, compared to its average volume of 10,025,106. The firm has a fifty day simple moving average of $75.89 and a 200 day simple moving average of $82.36. The firm has a market capitalization of $38.56 billion, a P/E ratio of 105.36, a P/E/G ratio of 0.51 and a beta of 1.77. The company has a current ratio of 1.92, a quick ratio of 1.11 and a debt-to-equity ratio of 0.83. Microchip Technology has a 52 week low of $48.52 and a 52 week high of $105.91.

Microchip Technology (NASDAQ:MCHP - Get Free Report) last issued its quarterly earnings results on Thursday, August 6th. The semiconductor company reported $0.76 earnings per share for the quarter, topping analysts' consensus estimates of $0.70 by $0.06. The company had revenue of $1.48 billion during the quarter, compared to the consensus estimate of $1.46 billion. Microchip Technology had a net margin of 9.34% and a return on equity of 14.97%. The firm's quarterly revenue was up 38.0% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.27 EPS. Microchip Technology has set its Q2 2027 guidance at 0.910-0.950 EPS. As a group, research analysts forecast that Microchip Technology will post 3.16 EPS for the current year.

Microchip Technology Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, September 9th. Investors of record on Monday, August 24th were paid a $0.4550 dividend. The ex-dividend date of this dividend was Monday, August 24th. This represents a $1.82 annualized dividend and a yield of 2.6%. Microchip Technology's dividend payout ratio is presently 271.64%.

Microchip Technology Company Profile

Microchip Technology Inc is a semiconductor company that develops and manufactures embedded control solutions for automotive, industrial, aerospace and defense, communications, consumer, and computing applications. Its products are designed to help customers manage processing, connectivity, power, timing, security, and data storage within electronic systems.

The company's product portfolio includes microcontrollers, microprocessors, analog and mixed-signal devices, power-management products, timing and synchronization solutions, memory products, connectivity components, and field-programmable gate arrays.

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