General Options Blog

FSLR – First Solar Selling Assets? Not a good sign.

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When a press release combines Buffet and Billions, the stock attached to that release, is sure to see some upside action. First Solar released news this morning that it was selling its much hyped $2 billion topaz farm project to MidAmerican Energy Holdings Co. This stock has been taken to the woodshed this year, and soared 10%+ to 51.86 in morning trade on the news.

Now folks who read our blog and spend time in our chatroom, know our feelings on FSLR. We have written about FSLR the past few months, and have played her like a textbook. Which means buying puts into a Gap... Which is what we did today.

https://www.optionmillionaires.com/2011/fslr-and-the-solars/

https://www.optionmillionaires.com/2011/solars-the-next-pennystocks/

FSLR still remains a troubled company, and the asset sale confirms that. Folks buying into the hype, were taught a lesson, as the stock closed at $47.99.

We went short via the $47 and $48 PUTS after the open on Wednesday, and our options were up 300%+ on the day. We fully expect FSLR to touch the $45 level before the weeks out.

 

Below is the news from Marketwatch:

http://www.marketwatch.com/story/first-solar-selling-calif-plant-to-midamerican-2011-12-07

By Melodie Warner

First Solar Inc. FSLR +4.08% agreed to sell a solar power plant being built in California to MidAmerican Energy Holdings Co. as part of the solar-panel maker's plans to reduce spending.

The $2 billion Topaz Solar Farm project -- a 550-megawatt photovoltaic power plant being built in San Luis Obispo County, Calif. -- will have the capacity to generate enough renewable energy to power about 160,000 average homes. Pacific Gas & Electric Co. will purchase the electricity under a 25-year power purchase agreement.

First Solar has agreed to construct, operate and maintain the Topaz project for MidAmerican, an energy services provider. Construction is expected to be complete by early 2015.

First Solar said in October it intended to reduce spending next year and was looking at opportunities to reallocate overhead expenses to fund increased investments in research and development, among other things.

The company reported its third-quarter profit climbed 11% but badly missed expectations despite a 26% jump in sales.

Shares were trading 3.6% higher at $47.75 premarket. The stock has fallen 65% so far this year through Tuesday's close.

 

SINA – $67.50 calls @ .40

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SINA continued its downward spiral Monday and Tuesday. We figured a bounce and squeeze was in order, as it has done so in the past. Today finally looks like the time for the bounce, as SINA held $60 and has bounced all morning to $62.50. Should bounce nice the rest of the week. Weekly options are extremely risky, but can be very rewarding as well. Looking at the $67.50 for .40.

DNDN – Halted

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DNDN was once a high flying stock, with hits hyped prostate cancer drug provenge, leading the hype. DNDn went from sub $5 stock in early 2009, to $55 stock in early 2010. Dissapointing sales results and other factors have resulted in a massive sell-off and DNDN has been trading near multi-year lows.Over the last few weeks, the stock has shown some life and with todays news, i fully expect this to be trading over $10 in the short term. As i write this the stock is trading at $8.64. It usually takes some time before folks peel back the onion and see whats going on here, so you should have time to get some calls or go long the stock under $9 before the end of day stampede.

 

 

 

$9 calls are .32 right now, and look to be the play.

 

 

 

 

 

AUTOZONE (AZO) to the upside after earnings

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Autozone reported earnings this morning. Analysts were expecting an EPS of $4.44, Autozone reported $4.68. A key quote from Autozones press release,

"This past quarter marked our twelfth consecutive quarter of 20% growth in earnings per share and our twenty-first consecutive quarter of double digit growth."

Growth stocks were all the buzz at the start of the year, and seemed to get old as we head towards the end of the year. AZO continues to be the one that is diamond in the rough, and should see more upside here, irregardless of its current hefty share price. AZO's low BETA allows for option traders to buy calls on the cheap, and should reap large gains as it moves to the upside here.

This stock is no NFLX, so when i see the company buying almost 1 million shares @ $325 avg last Quarter, with $650 million left to purchase, I feel even more confident of continued upside here.

Looking at the $360 Dec 17th Call for .50/.55. Will take half off when the calls are $1.