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Hawk’s Nest

Stratasys (SSYS) Shares Catch Fire after Unusual Options Action

by | Jan 1, 2021

Stratasys (SSYS) caught our attention on 11/5 with major size positioning in the options market, and in the few weeks that followed shares ran above $22 from $14 resulting in major gains for equity and call buyers.

Here was the 11/5 write-up:

“Stratasys (SSYS) like may names this week seeing January 2022 call positions adjust to 2023 and today the $15 calls opening 1500X, the $17.50 calls 400X, and the $20 calls 1000X. SSYS has seen some action recently with 2000 November $17 calls bought, 3000 March $17.50 calls bought, and January 2022 far OTM $35 calls accumulated 13,770X. SSYS has been a laggard trending lower since July 2019 and recently a double bottom with the March lows. The $745M company is a provider of 3D printing and additive manufacturing solutions. Stratasys provides tailored solutions for industries including aerospace, automotive, rail, healthcare, consumer products, and education. SSYS is trading 65X Earnings and 1.3X Sales with a debt-free balance sheet. 3D printing is penetrating further into manufacturing across every relevant business sector. Localization and the need for increased self-efficiency are both on the rise, among the many benefits that are creating a greater need for manufacturers to seek 3D printing solution.  To quote Congressman Michael Burgess of Texas, “3D printing may account for up to 10% of U.S. manufacturing in the future.”  SSYS will report earnings on 11-12 and shares with a max-move lower each of the last five reports. Analysts have an average target of $16.50 and short interest at 23.7% of the float rising 23% Q/Q to a new five-year high. Berenberg started shares Buy with an $18 target in October noting 3D printing disrupting the traditional manufacturing industry. Hedge Fund ownership jumped 16% in Q2 filings.”