Shares of specialty equipment maker Mirion Technologies (MIR) have been trending down over the past three months. One trader is betting on a rebound in shares in the next few months.
That’s based on the May $10.00 calls. With 106 days until expiration, 9,791 contracts traded compared to an open position of 209, for a 47-fold jump in volume. The buyer of the calls paid $0.36 to make the trade.
The stock has dropped over 32 percent in the past year, and has lost more than half its value from its peak price nearly one year ago. The radiation detection equipment company first went public via special purpose acquisition company (SPAC) back in October.
Like many recently-public companies, Mirion has seen shares drop since going public. However, in the most recent quarter, the stock traded at under 12 times earnings.
Action to take: As an early-stage company, shares will be volatile. However, investors have a chance to buy well under the SPAC price for shares, when the business was valued at $10 per share. With revenue growing by double-digits, investors could see a marked improvement in their returns in the next year.
For traders, the May $10 calls are well priced for high returns. A move higher in shares will likely see a price test near $10, so traders can buy the options for a low price now and sell them for a higher price once shares get back to their IPO price.
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.