Shares of consumer tech giant Apple (AAPL) sank 2 percent on Monday on news that hiring would slow at the company. One trader sees shares shaking off the news and moving higher in the next few weeks.
That’s based on the August 26th $147 calls. With 37 days until expiration, 15,718 contracts traded compared to a prior open interest of 176, for an 89-fold surge in volume. The buyer of the calls paid $6.93 to make the trade.
The stock recently traded for $147, making this an at-the-money trade. Shares have a 52-week high near $183, or about 25 percent higher from where the stock currently trades.
Even with the market decline in the past year, the stock is up about 5 percent. Revenue rose nearly 9 percent in the past year, earnings are up about 6 percent, and the company has an impressive 22 percent profit margin.
Apple has continued to improve its existing product offerings, and could be working on new developments like its own take on the electric vehicle to find a new source of growth in the years ahead.
Action to take: Shares are at a reasonable value at 24 times forward earnings. As one of the top tech brands, the company is likely to continue delivering operationally, and shares will recover in time. At current prices, the stock even yields about 0.6 percent.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.