Traders Purchase High Volume of Call Options on Weyerhaeuser (NYSE:WY)

Key Points

• Options activity surged: Investors purchased 10,396 Weyerhaeuser call options, 626% above the typical volume of 1,432 contracts, signaling unusually high trading interest.
• Institutional ownership remains substantial: Hedge funds and other institutional investors own 82.99% of the company, with several major firms increasing their stakes during the latest quarter.
• Shares face pressure despite mixed fundamentals: WY traded at $18.86, near its one-year low, while the company beat quarterly earnings and revenue estimates. Analysts maintain a “Moderate Buy” consensus with an average price target of $27.78, and the stock offers a 4.5% dividend yield.

Weyerhaeuser Company (NYSE:WY - Get Free Report) was the target of unusually large options trading on Thursday. Stock investors acquired 10,396 call options on the stock. This represents an increase of 626% compared to the typical volume of 1,432 call options.

Institutional Trading of Weyerhaeuser

A number of hedge funds have recently added to or reduced their stakes in WY. First Eagle Investment Management LLC lifted its stake in Weyerhaeuser by 10.6% in the 2nd quarter. First Eagle Investment Management LLC now owns 51,179,282 shares of the real estate investment trust's stock worth $1,225,232,000 after purchasing an additional 4,885,818 shares in the last quarter. Wellington Management Group LLP increased its holdings in shares of Weyerhaeuser by 14.3% in the second quarter. Wellington Management Group LLP now owns 43,574,118 shares of the real estate investment trust's stock valued at $1,043,164,000 after purchasing an additional 5,437,685 shares in the last quarter. State Street Corp raised its position in Weyerhaeuser by 3.3% in the 2nd quarter. State Street Corp now owns 34,298,957 shares of the real estate investment trust's stock worth $821,117,000 after purchasing an additional 1,106,553 shares during the last quarter. Bank of New York Mellon Corp bought a new position in Weyerhaeuser in the 2nd quarter worth approximately $468,969,000. Finally, Arrowstreet Capital Limited Partnership lifted its holdings in Weyerhaeuser by 11.5% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 6,212,273 shares of the real estate investment trust's stock worth $151,766,000 after buying an additional 639,334 shares in the last quarter. 82.99% of the stock is owned by hedge funds and other institutional investors.

Weyerhaeuser Stock Performance

Weyerhaeuser stock traded up $0.29 during trading hours on Thursday, hitting $18.86. 3,560,209 shares of the stock traded hands, compared to its average volume of 6,051,711. The firm's 50 day moving average price is $22.70 and its 200-day moving average price is $23.62. The company has a debt-to-equity ratio of 0.56, a current ratio of 1.82 and a quick ratio of 1.15. The stock has a market capitalization of $13.60 billion, a price-to-earnings ratio of 29.03, a P/E/G ratio of 1.91 and a beta of 0.92. Weyerhaeuser has a 1 year low of $18.25 and a 1 year high of $27.75.

Weyerhaeuser (NYSE:WY - Get Free Report) last issued its quarterly earnings results on Thursday, July 30th. The real estate investment trust reported $0.13 earnings per share for the quarter, topping the consensus estimate of $0.08 by $0.05. The company had revenue of $1.87 billion for the quarter, compared to the consensus estimate of $1.85 billion. Weyerhaeuser had a net margin of 6.89% and a return on equity of 1.49%. Weyerhaeuser's quarterly revenue was down 8.3% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.12 EPS. As a group, equities analysts expect that Weyerhaeuser will post 0.31 EPS for the current fiscal year.

Weyerhaeuser Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, September 18th. Investors of record on Friday, September 4th were paid a $0.21 dividend. This represents a $0.84 annualized dividend and a dividend yield of 4.5%. The ex-dividend date was Friday, September 4th. Weyerhaeuser's payout ratio is currently 129.23%.

Analyst Ratings Changes

Several brokerages have recently commented on WY. Wall Street Zen upgraded Weyerhaeuser from a "sell" rating to a "hold" rating in a research note on Sunday, August 2nd. Weiss Ratings cut shares of Weyerhaeuser from a "hold (c)" rating to a "hold (c-)" rating in a report on Friday, October 2nd. Citigroup reduced their price target on shares of Weyerhaeuser from $29.00 to $21.00 and set a "buy" rating for the company in a report on Monday. Raymond James Financial raised shares of Weyerhaeuser from an "outperform" rating to a "strong-buy" rating and set a $30.00 price target for the company in a research report on Friday, July 10th. Finally, Truist Financial reiterated a "hold" rating and set a $28.00 price objective (up from $27.00) on shares of Weyerhaeuser in a research note on Monday, August 3rd. One research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating and four have given a Hold rating to the company. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $27.78.

About Weyerhaeuser

Weyerhaeuser NYSE: WY is one of the world's largest private owners of timberlands and a major producer of forest products. The company owns and manages timberlands in the United States and operates manufacturing facilities in the United States and Canada, serving residential, commercial and industrial markets.

Its principal products include lumber, structural panels, engineered wood products and other materials used in homebuilding and construction. Weyerhaeuser also manages its timberlands for sustainable wood production and generates revenue from real estate, energy and natural-resource activities associated with those properties.

Founded in 1900, Weyerhaeuser has developed from a regional timber company into an integrated forest-products business.

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