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.