MetroPCS: Elevated Vol, Rising Stock, Upside Potential In Earnings
Ophir Gottlieb | Jul 12, 2012 04:19AM ET
MetroPCS Communications, Inc. (PCS) is a facilities-based wireless broadband mobile communications provider in the United States, including the Atlanta, Boston, Dallas/Fort Worth, Detroit, Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville, Philadelphia, Sacramento, San Francisco, and Tampa/Sarasota metropolitan areas.
This is a vol and stock note with earnings approaching. Let's start with the Charts Tab (six months), below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).
There's a lot going on with the stock, and I've highlighted three areas over the last six months.
1. On 2-23-2012 the stock popped off of an earnings report (BMO). But, the few days following the news, the stock came back down to the original price and then below the pre-earnings price. Here are some news snippets that shed light on the rise and fall in that few day period.
2-23-2012
MetroPCS fourth-quarter profit jumps, beats expectations; stock at highest level since August -- Source: AP via Yahoo! Finance; Understanding Option Skew -- What it is and Why it Exists
Finally, let's turn to the Options Tab, for completeness.
We can see the monthly vols are priced to 85.48%, 82.20% and 64.83%, respectively, for Jul, Aug and Nov. With the upside skew in Aug, it feels like the option market has priced in the potential for another takeover rumor/run or possibly an earnings report that pushes the stock up. Ya know.. or not...
Disclosure: This is trade analysis, not a recommendation.
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