Traders Purchase Large Volume of Call Options on GameStop (NYSE:GME)

Key Points

• GameStop Corp. experienced a significant increase in options trading, with traders purchasing 361,611 call options, marking a 50% rise over the average daily volume.
• The stock price rose 5.7% on Wednesday, closing at $24.94, with trading volume greatly exceeding the average at 26,384,441 shares.
• Following its latest earnings report, which exceeded expectations, GameStop's analysts have given the stock an average rating of "Sell" with an average price target of $13.50.

GameStop Corp. (NYSE:GME - Get Free Report) was the recipient of some unusual options trading activity on Wednesday. Stock traders purchased 361,611 call options on the company. This is an increase of approximately 50% compared to the typical daily volume of 241,359 call options.

GameStop Trading Up 5.7%

GME traded up $1.35 on Wednesday, hitting $24.94. The company had a trading volume of 26,384,441 shares, compared to its average volume of 10,874,323. The firm has a market cap of $11.16 billion, a P/E ratio of 54.40 and a beta of -0.93. GameStop has a 1 year low of $19.31 and a 1 year high of $35.81. The company's fifty day moving average price is $23.00 and its 200 day moving average price is $24.92. The company has a current ratio of 8.39, a quick ratio of 7.89 and a debt-to-equity ratio of 0.30.

GameStop (NYSE:GME - Get Free Report) last issued its quarterly earnings data on Tuesday, September 9th. The company reported $0.25 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.19 by $0.06. The firm had revenue of $972.20 million for the quarter, compared to analyst estimates of $823.25 million. GameStop had a net margin of 5.67% and a return on equity of 5.25%. GameStop's revenue was up 21.8% on a year-over-year basis. During the same period in the previous year, the firm earned $0.04 EPS. As a group, equities analysts expect that GameStop will post 0.08 earnings per share for the current year.

Analysts Set New Price Targets

Separately, Wedbush upgraded GameStop to a "strong sell" rating in a report on Tuesday, July 1st. One investment analyst has rated the stock with a Sell rating, According to data from MarketBeat.com, GameStop has an average rating of "Sell" and an average price target of $13.50.

Insider Transactions at GameStop

In related news, General Counsel Mark Haymond Robinson sold 11,055 shares of GameStop stock in a transaction on Wednesday, July 23rd. The shares were sold at an average price of $24.18, for a total value of $267,309.90. Following the sale, the general counsel owned 116,781 shares of the company's stock, valued at approximately $2,823,764.58. This trade represents a 8.65% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Over the last 90 days, insiders have sold 13,905 shares of company stock valued at $334,509. 8.58% of the stock is currently owned by company insiders.

Institutional Trading of GameStop

Institutional investors and hedge funds have recently bought and sold shares of the business. EverSource Wealth Advisors LLC increased its stake in shares of GameStop by 226.6% during the second quarter. EverSource Wealth Advisors LLC now owns 1,277 shares of the company's stock worth $31,000 after buying an additional 886 shares during the period. Ameritas Advisory Services LLC purchased a new stake in shares of GameStop during the second quarter worth approximately $45,000. Hantz Financial Services Inc. increased its stake in shares of GameStop by 1,523.7% during the second quarter. Hantz Financial Services Inc. now owns 2,127 shares of the company's stock worth $52,000 after buying an additional 1,996 shares during the period. UMB Bank n.a. increased its stake in shares of GameStop by 100.6% during the first quarter. UMB Bank n.a. now owns 3,651 shares of the company's stock worth $81,000 after buying an additional 1,831 shares during the period. Finally, US Bancorp DE increased its stake in shares of GameStop by 92.5% during the first quarter. US Bancorp DE now owns 3,726 shares of the company's stock worth $83,000 after buying an additional 1,790 shares during the period. 29.21% of the stock is currently owned by hedge funds and other institutional investors.

GameStop Company Profile

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads.

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