Trade Of The Week

Blackstone Spreads Position for Continued Strength   

Date: 5/22/17

Stock: BX

Trade Details:

Blackstone (BX) on May 2nd saw a large spread sell the September $30 puts for $1.18 to buy the $31/$35 call spread for  $1.18, opening for more than 17,000 contracts. The position is profitable with shares above $31. BX has seen sizable longer-term call buying since late February including over 5,000 January 2019 $25 calls, 2,000 of the January 2019 $32 calls, and 2,000 January 2019 $27 short puts opened on 2-27 at $4.00. BX still has over 20,000 of the January 2019 $30 calls in open interest.

Fundamental Snapshot:

The $37B asset manager trades 9.74X earnings, 6X sales, and 3X book with a 11.28% yield and 25% EPS growth. BX expects to hit over $7B in revenue by 2018. BX is benefitting from better equity and credit markets this year which is allowing for more large deals to close and higher fundraising. Fee-earning AUM rose to $280.8B, up 15%, and management fees rose 6%. Analysts have an average target for shares of $33 with 6 buy ratings and 1 hold rating. MS was out positive in April noting that BX has a lot of transactions closing in Q1 and a lot of fundraising ability which will give them dry powder to put back to work. Credit Suisse out positive on 4-21 noting that BX is positioned well to continue to take market share as alternative asset managers grow in popularity over traditional and remains cheap on its dividend potential. The firm thinks performance fees could continue to climb as BX is levered to a stronger US and EU economic backdrop and improving GDP. Short interest is 4.02% of the float while institutional ownership rose almost 2%.

Previous Trades of the Week:

Moody’s (MCO) Call Buyer Holds for Key Technical Breakout (4-3-17)

Unusual Cott Corp (COT) Bulls Position for Summer Rebound (3-13-17)

J2 Global (JCOM) Bullish OI (3-7-17)

Constellation (STZ) Bullish Spreads Position for Rebound in 2017 (2-28-17)

Cardtronics (CATM) Short Puts Look for Recent Lows to Hold (2-20-17)

T-Mobile (TMUS) Call Spreads Position for Strong 1H (2-13-17)

Pinnacle Foods (PF) Bulls Sit in Open Interest Amid Technical Strength (1-31-17)

Scientific Games (SGMS) Bulls Look for Continued Strength in Small-Cap (1-23-17)

Zayo Group (ZAYO) Open Interest Positioned Bullish into Recent Pullback (1-16-17)

Honeywell (HON) Bulls Position for Technical Strength, Potential M&A in 2017 (1-9-17)

Mylan (MYL) Bulls Position for 2017 Turnaround (1-2-17)

Adobe (ADBE) Bulls Buy into 200-MA (12-5-17)

Oceaneering (OII) Put Sales See Floor in Energy Stock (11-21-16)

Intel (INTC) Bulls (11-14-16)

Mobileye (MBLY) Bulls (11-7-16)

Sherwin Williams (SHW) Bulls (10-31-16)

Palo Alto Networks (PANW) Call Spreads (10-24-16)

Post Holdings (POST) Bulls (10-17-16)

Marathon Petrol (MPC) Sell-Off Attracts Long-Term Bull (10-10-16)

Teva (TEVA) Bulls Building Contrarian Positions (10-3-16)

Biogen (BIIB) Bulls (9-19-16)

Prudential (PRU) Bulls (9-12-16)

Lionsgate (LGF) Bulls (9-5-16)

Google (GOOGL) Call Spreads (8-29-16)

Anadarko (APC) Bulls (8-15-16)

CIT Group (CIT) Bull Spreads (8-1-16)

Ball Corp (BLL) Bull Spreads (7-25-16)

Imperva (IMPV) Bulls (7-18-16)

Chipotle Mexican Grill (CMG) 3 Way Spreads (7-11-16)

WhiteWave (WWAV) Bulls Position for Summer Rally (6-27-26)

Amazon (AMZN) Call Fly (6-20-16)

BP PLC (BP) Bulls (6-13-16)

Visa (V) Bulls (5-30-16)

ActiVision (ATVI) Calls (5-23-16)

Eagle Pharma (EGRX) Calls (5-16-16)

ACADIA (ACAD) Bullish Spread (5-9-16)

Kate Spade (KATE) Call Spread (5-2-16)

WestRock (WRK) Calls (4-26-16)

Shire (SHPG) Risk Reversals (3-21-16)

PACCAR (PCAR) Puts (3-7-16)

Goldman Sachs (GS) Bull Put Spreads (2-29-16)

SS&C Tech (SSNC) Call Spreads (2-22-16)

Mead Johnson (MJN) Call Buying (2-15-16)

Lyondell (LYB) Puts (2-8-16)

MicroChip Puts (1-26-16)

Wal-Mart (WMT) Calls (1-18-15)

CenterPoint Enegy (CNP) Calls (1-11-16)

Sarepta (SRPT) Bulls (12-21-15)

UPS Call Spread (12-14-15)

Ross Stores (ROST) Puts (11-9-15)

Baxter (BAX) Bullish Positioning (11-2-15)

Comerica (CMA) Call Options (10-29-15)

Allergan (AGN) Bullish Positioning (10-19-15)

Starz (STRZA) Covered Risk Reversals (9-28-15)

Nu-Skin (NUS) Put Spreads (9-21-15)

Edgewell Personal Care Calls (9-13-15)

Vodafone (VOD) Risk Reversals (9-7-15)

Incyte (INCY) Call Spreads (8-31-15)

AutoDesk (ADSK) Risk Reversals (8-17-15)

McDonald’s (MCD) Call Spreads (8-10-15)

Macy’s (M) Risk Reversal (8-3-15)

Assured Guaranty Call Spreads (7-27-15)

Aer-Cap Call Buyers (7-20-15)

Workday (WDAY) December Call Spreads (7-13-15)

Halozyme Volatility Spread (1-18-13)

National Oilwell Varco (NOV) 3 Way Bull Spread (1-11-13)

Leverage Spread Positions for AIG (AIG) Rally (1-4-13)

China (FXI) Bulls Position for Rally (10-10-12)

Intel (INTC) Mixed Action into Earnings (7-6-12)

WellPoint (WLP) Bullish Calendar Spread (5-31-12)

Medivation (MDVN) Calendar Spread (4-10-12)

Tivo (TIVO) Bullish Spreads (3-28-12)

Gold Corp (GG) Call Fly Spread (3-15-12)

Trip Advisor (TRIP) Strangle Sale (3-1-12)

DirecTV (DTV) January 2013 3 Way Bullish Spread (2-21-12)

Dick’s Sporting Goods (DKS) Bear Put Spreads (2-16-12)

Vale SA (VALE) Bullish Risk Reversal (2-9-12)

Ford (F) Bullish Straddle Sale, Call Buy (2-3-12)

Kodiak Oil & Gas (KOG) January 2013 Call Spread (January 26th, 2012)

US Steel (X) April Covered Bullish Ratio Risk Reversal (January 20th, 2012)

Treasury (TLT) March 117/113/109 Butterfly Put Spread (January 13th, 2012)

Oracle (ORCL) Ratio Call Spread 2X3 (January 6th, 2012)

Yahoo (YHOO) February $16/$19 Ratio Call Spread, December 23, 2011

EBAY Ratio Call 2X3 Spread, December 2, 2011