NXST options are inexpensive
Media and broadcasting company Nexstar Media Group, Inc. (NASDAQ: NXST) While the stock may not make the headlines like its peers, the stock continues to be a fascinating investment despite its huge surge over the past year. The company has had one of its best fiscal years, increasing sales by 48% and net profits by a massive 252%. As a result, Nexstar Media Group stock is currently trading at an incredibly attractive price-earnings-ratio of 8.14. However, NXST’s price-to-earnings ratio is estimated at 14.86 which is not quite as exciting but still represents great value. Given the inconsistent data profile, we felt that NXST was worth a deeper look.
In the charts, Nexstar Media Group’s stock hit a record high of $ 163.62 on March 18. Since then, stocks have consolidated below $ 155 despite a 38% annual balance sheet. While the stock also offers its shareholders a forward dividend of $ 2.80 and a dividend yield of 1.86%, there’s not much to expect from analyst tailwind when you consider all six in coverage rate NXST are a “strong buy”. There isn’t much of a short covering rally either, with just under 5.7% of the stock’s total available float being sold short.
However, options traders are enthusiastic about targeting puts. The security’s 10-day put / call volume ratio of 1.08 shows that the puts on an absolute basis match the calls on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX) surpass. In addition, this ratio is above 91% of all other readings from last year, suggesting a healthier appetite for these bearish bets than recently.
The good news for these put traders is that stocks currently have an affordable premium. This corresponds to the Schaeffer’s Volatility Index (SVI) of the share of 31%, which only exceeds 3% of all other values in its annual range. This implies that option players are pricing in relatively low volatility expectations.