HSBC (NYSE:HSBC) Stock Sees Unusually High Call Option Buying

HSBC Holdings plc (NYSE:HSBC) saw unusually large options trading activity on Tuesday. Stock traders purchased 10,270 call options on the company. This is an increase of 396% compared to the average daily volume of 2,071 call options.

Hedge Funds Weigh In On HSBC

A number of hedge funds have recently added to or reduced their stakes in HSBC. Foresight Capital Management Advisors Inc. boosted its position in shares of HSBC by 98.2% during the third quarter. Foresight Capital Management Advisors Inc. now owns 37,370 shares of the financial services provider’s stock valued at $3,711,000 after buying an additional 18,520 shares during the last quarter. SYM FINANCIAL Corp lifted its stake in HSBC by 5.7% during the 3rd quarter. SYM FINANCIAL Corp now owns 6,484 shares of the financial services provider’s stock valued at $644,000 after acquiring an additional 348 shares during the period. Westover Capital Advisors LLC lifted its stake in HSBC by 5.0% during the 3rd quarter. Westover Capital Advisors LLC now owns 9,776 shares of the financial services provider’s stock valued at $971,000 after acquiring an additional 463 shares during the period. Apollon Wealth Management LLC boosted its holdings in shares of HSBC by 10.9% during the 3rd quarter. Apollon Wealth Management LLC now owns 2,655 shares of the financial services provider’s stock valued at $264,000 after acquiring an additional 260 shares during the last quarter. Finally, Simplicity Wealth LLC boosted its holdings in shares of HSBC by 13.5% during the 3rd quarter. Simplicity Wealth LLC now owns 4,488 shares of the financial services provider’s stock valued at $446,000 after acquiring an additional 535 shares during the last quarter. 1.48% of the stock is currently owned by hedge funds and other institutional investors.

HSBC News Summary

Here are the key news stories impacting HSBC this week:

• Positive Sentiment: HSBC reported third-quarter profit before tax of approximately $9.6 billion, up 32% year over year, supported by net interest income growth, lower expected credit losses and cost reductions. The bank also announced a share buyback of up to $1 billion and a third interim dividend of $0.10 per share. HSBC’s third-quarter profit jumps 32%, in line with estimates
• Positive Sentiment: The capital-return plans could provide support for HSBC’s valuation by returning excess capital to shareholders, particularly as the stock trades below its recent highs. HSBC share price: Is the $1 billion buyback enough to drive a rally?
• Neutral Sentiment: Unusually heavy call-option activity and reports that HSBC may combine its asset-management business with Hang Seng’s investment arm indicate speculative and strategic interest, but neither is yet a confirmed earnings catalyst. Market Chatter: HSBC to Merge Fund Business With Hang Seng’s Asset Management Unit
• Negative Sentiment: Adjusted EPS of $2.10 missed the $2.20 consensus estimate, while revenue of about $18.6 billion came in below expectations near $19.0 billion. The revenue shortfall is the primary reason investors have discounted the otherwise strong profit figure. HSBC Revenue Misses Forecasts As Wealth Business Growth Stalls
• Negative Sentiment: Wealth-management growth slowed, weakening one of HSBC’s key expansion businesses. Customers are also shifting toward higher-rate products, which can increase funding costs and pressure future net interest margins. Customers are chasing higher-rate products, and that’s bad news for banks like HSBC
• Negative Sentiment: The 32% profit increase benefited partly from the absence of substantial legal provisions recorded in the prior-year period, making the year-over-year comparison less indicative of underlying operating growth.

Wall Street Analyst Weigh In

Several research firms have weighed in on HSBC. Erste Group Bank cut HSBC from a “buy” rating to a “hold” rating in a research report on Wednesday, July 15th. The Goldman Sachs Group reissued a “buy” rating on shares of HSBC in a research report on Wednesday, August 5th. Shore Capital Group lowered HSBC to a “sell” rating in a research report on Wednesday, August 5th. Royal Bank Of Canada restated a “sector perform” rating on shares of HSBC in a research report on Monday, August 17th. Finally, Citigroup reaffirmed a “neutral” rating on shares of HSBC in a research note on Wednesday, September 23rd. Three analysts have rated the stock with a Buy rating, eleven have given a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat.com, HSBC presently has a consensus rating of “Hold” and a consensus target price of $97.00.

HSBC Stock Down 5.4%

Shares of NYSE HSBC traded down $4.90 on Tuesday, reaching $86.31. 3,064,121 shares of the company’s stock traded hands, compared to its average volume of 1,793,973. The business’s 50 day simple moving average is $100.05 and its two-hundred day simple moving average is $93.17. HSBC has a 12 month low of $67.56 and a 12 month high of $107.92. The company has a market cap of $295.90 billion, a price-to-earnings ratio of 12.25, a price-to-earnings-growth ratio of 0.88 and a beta of 0.58. The company has a quick ratio of 0.92, a current ratio of 0.85 and a debt-to-equity ratio of 0.67.

HSBC (NYSE:HSBC) last released its earnings results on Tuesday, October 27th. The financial services provider reported $2.10 EPS for the quarter, missing analysts’ consensus estimates of $2.20 by ($0.10). The company had revenue of $18.68 billion during the quarter, compared to analysts’ expectations of $18.98 billion. HSBC had a return on equity of 13.80% and a net margin of 18.19%. As a group, equities research analysts forecast that HSBC will post 8.60 EPS for the current fiscal year.

HSBC Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Friday, September 25th. Stockholders of record on Friday, August 14th were issued a dividend of $0.50 per share. The ex-dividend date was Friday, August 14th. This represents a $2.00 dividend on an annualized basis and a dividend yield of 2.3%. HSBC’s dividend payout ratio is presently 28.09%.

HSBC Company Profile

HSBC Holdings plc is a global banking and financial services company headquartered in London. Its principal subsidiary, The Hongkong and Shanghai Banking Corporation, was established in 1865 to facilitate trade between Europe and Asia. HSBC’s shares trade on the New York Stock Exchange in the form of American depositary receipts under the symbol HSBC.

The company provides personal and wealth banking, commercial banking, corporate and institutional banking, investment banking, global markets, and asset management services.