Shares of software feedback company Momentive Global (MNTV) are down 70 percent in the past year. One trader sees a move higher in the coming weeks.
That’s based on the December 16th $9.00 calls. With 50 days until expiration, 8,228 contracts traded compared to a prior open interest of 103, for an 80-fold rise in volume on the trade. The buyer of the calls paid $0.58 to make the bullish bet.
Shares recently traded for about $8, so the stock would need to rise $1, or about 12.5 percent, in less than two months, for the option to move in-the-money. That’s still well under the 52-week high of $25 per share.
Momentive has been losing money in recent quarters, shedding $130 million, even as revenues rose by nearly 10 percent in the last year.
Action to take: Shares are near their lowest price since going public in 2018. The company’s software as a service model should work out for a recurring revenue model in time. The stock can likely move higher from here, especially if the company can continue to increase revenues.
For traders, the December call options are inexpensive for a push higher in the coming weeks. That may be a bit at the mercy of the overall stock market, but given the low price for the options, traders could potentially make high double-digit returns or better.
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.