How high can Beacon Roofing Supply (BECN) go?

by Houghton and Atkeson   08/18/08
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Beacon Roofing Supply (BECN) options are trading six times their usual volume with the stock hitting a 52-week high at $16.91.

Market participants have traded 2,300 of the BECN Sept 17.50 Calls (QBQIW), which represents 90% of the call volume today. With only 313 open contracts in this line, we should see the open interest jump tomorrow.

On Aug. 8, BECN blew out Q3 earnings, with double-digit organic growth, citing price increases and unit growth. Management is saying that the annual estimates are reasonable and could prove to be conservative.

Short interest is 24%, up 6% from last update and at a 12-month high. With what looks like call sellers, maybe it is time to take the Beacon and run.


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