Veeco Instruments (VECO) Earnings Play 2-8-08

VECO reports earnings tonight after the bell.  Veeco Instruments Inc. (Veeco) designs and manufactures enabling solutions for customers in the high brightness light emitting diode (HB-LED), solar, data storage, semiconductor, scientific research and industrial markets.  


VECO has gone up from $3.53 in March'09 to $31.  Very impressive.  I am not challenging the growth, but I think the valuation metrics are starting to get far stretched.  I expect good report, but muted reaction.  In fact, I wouldn't be surprised if they take the stock down significantly.  


I like the following calendar spread going into earnings:


- Buy to open March $30 puts
- Sell to open Feb $30 puts


I like this spread for a net debit of $0.70 or less.  The implied volatility in Feb is at 87 vs. 67 in March.  I like the skew and I like the odds.  


Good luck!