Cintas is back to multi-year highs, and one investor is taking profits.
optionMONSTER’s tracking systems detected the sale of about 4,000 February 37.50 calls for $0.80 to $0.85 against open interest of just 11 contracts. Total option volume in the company, which supplies products such as employee uniforms and fire extinguishers to institutions including hospitals and restaurants, was 16 times greater than average.
CTAS rose 1.22 percent to $34.12 yesterday, its highest closing price since late 2007. At one point they touched $34.44 but ended near their lows for the session.
The stock is up 40 percent in the last year, benefiting from wider margins and customer retention. Its last earnings report on March 22 beat expectations on the top and bottom lines.
Judging by yesterday’s call selling, some shareholders apparently think that its gains could now slow, and they would like to get some money back before CTAS drops. By choosing a strike that’s relatively far out of the money, they reduce the likelihood of being forced to unload their stock.
They probably are long-term holders who simply wish to earn some cash now but would be willing to sell at $37.50 if it climbs that high. See our Education Section for more. (See our Education section)
Read more: http://community.nasdaq.com/News/2011-07/profit-taking-in-cintas.aspx?storyid=84437#ixzz1RXc5D82n
