Buy Alert: July 24, 2013

Marcus Haber | July 24, 2013

Buy Alert: July 24, 2013

Trade Details

Buy Broadcom (BRCM) September 2013 $28 Calls for $1.00 or better

Why?

One of the reasons earnings season can be so lucrative for options traders is because of the overreactions you often see after earnings misses. Communication chip maker BRCM is just another example of a stock being oversold after a slightly negative earnings report.

BRCM actually topped second quarter adjusted EPS estimates, but fell a little short on revenues. Plus, management sees third quarter revenues coming in slightly below average estimates. It’s hardly a reason for the stock to plunge over 14% (and fall well below the 200-day and 50-day moving averages). Not to mention, the stock’s now trading at less than 9x projected earnings.

We want to jump in before value seekers realize what a great deal BRCM is at this price. Grab the September $28 calls now.