Casino and resort operator Las Vegas Sands (LVS) gained a scant 4% in 2024, with shares mostly dropping 20% into the summer and then recovering. One trader sees shares breaking higher in the coming weeks.
That’s based on the February $57.50 calls. With 49 days until expiration, 20,232 contracts traded compared to a prior open interest of 366, for a 55-fold rise in volume on the trade. The buyer of the calls paid $0.65 to make the bullish bet.
Las Vegas Sands shares recently traded for about $51, so shares would need to rally by $6.50, or about 12.8%, for the option to move in-the-money. Shares would also need to break above their 52-week high of $56.60.
Operations had a rough year, with revenues down 4%, and earnings dropping 28%, amid signs of a slowdown in consumer spending. However, LVS shares also trade at about 18 times forward earnings, a reasonable valuation for its industry.
Action to take: LVS shares are in a short-term downtrend amid a longer-term uptrend. A pop higher could occur in the coming weeks, but overall, investors have better opportunities to go long on right now.
For traders, the February $57.50 calls are well positioned for a quick pop higher in shares. Traders may want to build a position, and use an up day for shares to nab a quick mid-double-digit return.
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 company mentioned in this article.