TriQuint Semiconductor has been steadily boosting its guidance all year, and now the bulls are looking for a stab to the upside.
OptionMonster's tracking systemsFriday detected the purchase of 6,434 August 7.50 calls, most of which priced for $0.20, against open interest of 4,169 contracts. Total option volume in the stock surged to 11 times greater than average.
The stock rose 1.75 percent to $7.57 on Friday and is up 24 percent since the beginning of July. Fueled by smartphone demand, the chip materials maker beat analysts' forecasts and boosted guidance the last time it reported earnings on July 28. It marked at least the fifth time since January that forecasts were raised.
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The Oregon-based small-cap is still attempting to fight its way back from a large bearish gap that occurred in October when a South Korean customer slowed handset production. It peaked at the top of that gap in April, and Friday's call buyers apparently think that it will return to that level above $8 in the next two weeks.
Triquint trades at a fairly low valuation given its strong growth metrics, with a forward price/earnings ratio of about 9 times and price/earnings growth ratio of just 0.57. It also appears to be reaching a revenue level where it can achieve greater economies of scale, judging by its gross-margin expansion from 33 percent to 42 percent in the last year.
CEO Ralph Quinsey is scheduled to make a presentation at the Pacific Crest Technology Leadership Forum tomorrow (Tues 8/10), which could also serve as a potential catalyst for the stock.
Calls outnumbered puts by a bullish 45-to-1 ratio Friday, according to OptionMonster data.
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David Russell is a reporter and writer for OptionMonster.