Investors Pile Into Long-Dated Microsoft Call Options in Unusual Volume - Bullish on MSFT Stock
Investors have been trading an unusually large volume of out-of-the-money Microsoft Corp. (MSFT) call options expiring in 74 days. That's a huge bullish signal on MSFT stock, coming after its strong …
Investors have been trading an unusually large volume of out-of-the-money Microsoft Corp. (MSFT) call options expiring in 74 days. That's a huge bullish signal on MSFT stock, coming after its strong Q2 free cash flow (FCF)results were released after the market closed on Wednesday, July 29.
MSFT is up over 5% today at $488.51 , after it rose 19% after the earnings release.
Apple Delivers Strong Free Cash Flow, But What is the Best AAPL Play?
Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today!
I discussed its FCF and valuation in a Barchart article on Friday, " Microsoft Jumps 15% on Strong Free Cash Flow - What's the Best MSFT Play Now? "
Based on an operating cash flow margin of 61.6%, I showed it could generate between $65.3 billion and $78 billion in FCF. Using a 2.0% FCF yield valuation metric, Microsoft's fair market value (FMV) could be worth between $3.25 trillion and $3.9 trillion .
That compares with its market cap today of $3.631 trillion, according to Yahoo! Finance. At the high end, then, MSFT could be worth +7.4% more, or $525 per share.
Moreover, analysts have higher price targets: $563.05 (Yahoo! Finance), up from $555.77 last week, when I wrote my Barchart article, and Barchart's $547.45 mean survey price target (up from $544.31 last week).
Read Full Story at Yahoo Finance →
