Buy Alert: June 11, 2013

Marcus Haber | June 11, 2013

Buy Alert: June 11, 2013

Trade Details

Buy Pandora Media (P) July $16 Calls for $1.10 or better

Why?

Internet radio company Pandora has taken a beating lately on news of Apple (AAPL) launching its own internet radio product, iRadio. At the moment, Pandora and Spotify are the only two major players in the internet radio space, so Apple’s entrance seems like a big deal.

However, Pandora has a growing list of subscribers who have steadily been increasing their listening hours. What’s more, the company is expanding into new areas, such as streaming its services over television.

I don’t believe iRadio will impact Pandora as much as the recent selloff has suggested. In fact, I’ve been watching this trade for the past couple days, wanting to pull the trigger, but we had to wait for Apple to get their iRadio announcement out of the way yesterday (just in case there were any surprises). Now, the worst is over… and P is set to move back towards its 52-week highs of over $19.

The stock has bounced firmly off the 50-day moving average and I see it continuing to move higher in the near future. Let’s grab the July $16 calls.