Stock Traders Purchase Large Volume of Put Options on Xerox (NASDAQ:XRX)

Key Points

• Traders bought an unusually large block of puts—1,689 put options, a 1,369% jump over the typical daily volume of 115—signaling heightened bearish interest in Xerox (XRX).
• Analysts have a consensus "Sell" rating with a $2.50 target after recent cuts, and Xerox recently missed earnings (EPS -$0.10 vs. $0.15 estimate) while showing negative margins and weak fundamentals.
• Institutional ownership is high at 85.36%, with major firms (e.g., Goldman Sachs) markedly increasing positions—Goldman raised its stake 339% to 9.29 million shares.

Xerox Holdings Co. (NASDAQ:XRX - Get Free Report) saw some unusual options trading on Wednesday. Stock traders acquired 1,689 put options on the company. This is an increase of 1,369% compared to the typical daily volume of 115 put options.

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of the stock. Goldman Sachs Group Inc. raised its position in Xerox by 339.3% in the 4th quarter. Goldman Sachs Group Inc. now owns 9,294,446 shares of the information technology services provider's stock worth $22,028,000 after purchasing an additional 7,178,915 shares during the last quarter. Charles Schwab Investment Management Inc. raised its position in shares of Xerox by 32.3% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 3,498,232 shares of the information technology services provider's stock valued at $8,291,000 after acquiring an additional 854,119 shares during the last quarter. Geode Capital Management LLC raised its position in shares of Xerox by 24.4% during the 4th quarter. Geode Capital Management LLC now owns 2,915,580 shares of the information technology services provider's stock valued at $6,911,000 after acquiring an additional 571,715 shares during the last quarter. Two Sigma Investments LP raised its position in shares of Xerox by 43.2% during the 3rd quarter. Two Sigma Investments LP now owns 2,476,689 shares of the information technology services provider's stock valued at $9,312,000 after acquiring an additional 746,582 shares during the last quarter. Finally, First Eagle Investment Management LLC raised its position in shares of Xerox by 89.4% during the 4th quarter. First Eagle Investment Management LLC now owns 2,182,500 shares of the information technology services provider's stock valued at $5,173,000 after acquiring an additional 1,030,000 shares during the last quarter. Institutional investors own 85.36% of the company's stock.

Analysts Set New Price Targets

A number of equities research analysts have weighed in on the company. Citigroup reaffirmed a "neutral" rating and set a $2.50 price objective (down from $3.50) on shares of Xerox in a report on Friday, January 30th. Weiss Ratings assumed coverage on Xerox in a report on Wednesday, January 28th. They set a "sell (d-)" rating on the stock. Finally, Zacks Research downgraded Xerox from a "hold" rating to a "strong sell" rating in a report on Tuesday, March 3rd. One equities research analyst has rated the stock with a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, Xerox currently has an average rating of "Sell" and a consensus target price of $2.50.

Xerox Stock Up 4.3%

Shares of XRX opened at $1.47 on Thursday. The company has a market capitalization of $192.25 million, a P/E ratio of -0.18 and a beta of 1.80. The company has a debt-to-equity ratio of 8.94, a current ratio of 1.11 and a quick ratio of 0.79. Xerox has a one year low of $1.19 and a one year high of $6.80. The business's 50 day simple moving average is $1.63 and its 200-day simple moving average is $2.41.

Xerox (NASDAQ:XRX - Get Free Report) last posted its quarterly earnings data on Thursday, January 29th. The information technology services provider reported ($0.10) earnings per share for the quarter, missing the consensus estimate of $0.15 by ($0.25). Xerox had a negative return on equity of 8.26% and a negative net margin of 14.65%.The company had revenue of $2.03 billion during the quarter, compared to the consensus estimate of $2.08 billion. During the same quarter last year, the firm earned $0.36 EPS. The business's revenue for the quarter was up 25.7% on a year-over-year basis. As a group, sell-side analysts predict that Xerox will post 1.07 EPS for the current fiscal year.

Xerox Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, April 30th. Investors of record on Tuesday, March 31st will be given a $0.025 dividend. This represents a $0.10 annualized dividend and a yield of 6.8%. The ex-dividend date is Tuesday, March 31st. Xerox's payout ratio is -1.22%.

About Xerox

Xerox Holdings Corporation NYSE: XRX is a global provider of document management technology and services. The company designs and manufactures a broad range of multifunction printers, production printers, digital presses and related consumables. In addition to its hardware offerings, Xerox delivers software and workflow automation solutions, managed print services and cloud-based document platforms that help organizations optimize their information-intensive processes.

Founded in 1906 as The Haloid Photographic Company, Xerox pioneered xerographic imaging in the late 1940s, launching the first plain-paper copier in 1959.

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