Unusual Action in Energy Triggers Takeover Chatter
Published: Friday, 16 Mar 2012 | 2:52 PM ETBy:
Lee Brodie Producer
 |
Jon Najarian’s heat seeker has spotted unusual action in this energy name. What does the OptionMonster make of it?
Peabody Energy [BTU 33.10
1.39 (+4.38%) 
], a coal company, landed on the radar due to excessive call buying. “It averages 8,000 calls but it traded 50,000 yesterday and today it remains very active,” Najarian says.
Peabody Energy [BTU 33.10
1.39 (+4.38%) ], a coal company, landed on the radar due to excessive call buying. “It averages 8,000 calls but it traded 50,000 yesterday and today it remains very active,” Najarian says.
| ||
The heaviest activity is at the April 34 strike, he adds. Despite gains of 5% in less than a week, the action suggests institutional investors are betting that the stock has more upside.
Although the catalyst is unknown, Najarian tells us market chatter suggests a very large investor may take a substantial stake in the company or might even make a bid for the entire company.
Trader Steve Grasso confirms that he too has heard the chatter. However, he thinks the trade is long Alpha Natural Resources [ANR 17.33 0.65 (+3.9%) ]. “The whole space is pretty much on its butt,” he says, “and people are bottom fishing,” he adds.
That is, pros are buying underperformers in anticipation of M&A activity. “Other names could be goosed dramatically by this,” he says.
Although the catalyst is unknown, Najarian tells us market chatter suggests a very large investor may take a substantial stake in the company or might even make a bid for the entire company.
Trader Steve Grasso confirms that he too has heard the chatter. However, he thinks the trade is long Alpha Natural Resources [ANR 17.33
0.65 (+3.9%) ]. “The whole space is pretty much on its butt,” he says, “and people are bottom fishing,” he adds.That is, pros are buying underperformers in anticipation of M&A activity. “Other names could be goosed dramatically by this,” he says.
No comments:
Post a Comment