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AutoNation announced an optimistic first quarter earnings report

The shares of AutoNation Inc (NYSE: AN) fell 2.6% to trade at $ 95.02 on the last check after previously hitting an all-time high of $ 99.78. The company posted better-than-expected earnings and sales in the first quarter, with earnings nearly tripling year over year. Additionally, the car name spearheaded higher per-vehicle production profits as production cuts and price increases were seen due to global chip scarcity. Finally, CEO Mike Jackson said the higher demand is expected to continue throughout the year.

Today’s new record is the culmination of an impressive increase of 214.1% over the previous year. Shares recently rebounded from $ 90, despite the stock’s all-time highs since December, supported by the 40-day moving average.

There’s still plenty of room for optimism among analysts, with only two of the nine reporting a “strong buy” rating while the remaining seven showing a lukewarm “hold” or worse. Meanwhile, short rates account for 5.5% of the security’s available float, or four days of pent-up purchasing power.

A shift in the option pits could also drive AutoNation shares higher. The share’s 50-day put / call volume ratio of 1.54 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is over 86% of last year’s readings. In other words, long puts are picked up faster than usual.

That shift seems to be happening already today. With a low absolute volume, 528 calls have changed hands so far, which is five times the typical value at this point. The most popular is the May 100 call, followed by the 105 call in the same monthly series.

These options are also currently inexpensive. The Schaeffer’s volatility index (SVI) of 40% is above 14% of the readings in its annual range, which means that option players are currently pricing in low volatility expectations. In addition, AN’s Schaeffer Volatility Scorecard (SVS) is 82 out of 100, which means that security has exceeded these expectations in the past 12 months.


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