Eastman Kodak Co. (EK)
Jun
24
Written by:
6/24/2008 10:04 PM
Eastman Kodak Co. (EK)
Eastman Kodak jumps
13% on buyback plan and investors buy up the Call options in hopes of more
upward movement.
$1 Billion in Shares
The company announced today a plan
to buyback $1 billion in EK shares with the help of a $541 million tax refund
dated all the way back to 1993. With a
$4.04 Billion market cap and a 4% dividend, Eastman Kodak looks like a company
that will be a solid investment for a longer term holding period.
Poor Performance
The company itself has performed poorly
over the last two quarters missing both and missing the March quarterly badly.
The stock has declined over 50% in the past 52 weeks and has a high Short Ratio
of 8.8. Without the buyback announced today, the stock would want to be
something you would stay away from. But now you have to consider the dividend
completely safe and the stock price at a bottom.
Calls Very Active
A large amount of Call volume today
in two different months shows investors looking for more price appreciation due
to the news of the buyback. The July 15 Strike price had an unusual amount of
volume ending the day with 15,622 options traded. Likely, the October 15 Strike
Calls saw high volume of 5,573 contracts today.