All posts by jimmybob

Diamond in the Rough??

DMDN (Diamond Foods, inc) has been a very volatile stock over the past 12 months, trading as low as $26 and as high as $96. Its agreement with The Procter & Gamble Company (NYSE:PG ) to merge the Pringles business ("Pringles") into Diamond Foods in a transaction valued at$2.35 billion has been the catalyst for the extreme highs and lows.  The stock pushed to all-time highs after the news, as the merger would triple  the size of  Diamonds snack business model.  

Some more benefits from the filing:

  • Increase scale in U.S. grocery, mass merchandise, drug and convenience channels to gain greater merchandising and distribution influence;
  • Leverage Diamond's sales and distribution infrastructure through a more than doubling of snack sales in the U.S. and U.K., which are Pringles' two largest markets;
  • Gain a broader global manufacturing and supply chain platform, with access into key growth markets around the world, including Asia, Latin America and Central Europe;
  • Increase Diamond's geographic diversity, with international sales accounting for approximately 49 percent of total revenues on a pro forma basis.
Of course nothing is ever easy or certain, and rumors of possible missteps in regards to payments to suppliers that may have inflated DMND's results surfaced. It looks like the deal to merge in Pringles is on hold until it's latest financials are released ,which were postponed from December. Here is the companies explanation: (click here).
The good news is, P&G is still assuming the sale of Pringles will happen this year, and that is a good sign for shareholders of DMND.
Heck, what is there not to like about a company holding one of our favorite popcorn brands, Pop-Secret, and one of favorite chip brands, Pringles.
Expect some type of update out in the next 2 weeks, and a volatile trade after the news. We bought some calls, and will be looking to add to our position this week.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CME (CME Group) – Going to Get Some Legs?

One of the best way's to make money trading options, is buying when a stock is cold...when noone is paying attention. Stocks with high beta(volatility), have higher option premiums. Stocks under the radar with low beta, have cheaper options.

CME is one of those stocks. We wrote about her January 12th, in which the options we mentioned, were a 500% gain a week later.

CME reports earnings February 2nd before the bell, and we think CME will get some legs leading up to the report, as well as after.

CME is a market leading clearing house, and the stock used to trade over $700. Lower exchange volumes and the 2008 downturn, has had a big impact on the stock price. Couple that with the MF global fiasco, and you have an oversold stock. It finally looks like CME is ready to turn back to the upside and head over $300.

Right now we are positioning ourselves with the $270 and $280 FEB 18th Calls currently at .65 and .30 respectively.

 

Option Millionaires? Not Yet, but getting there…

We wrote about PCLN on December 14th, 2011, as a bounce play and continued to like it going into 2012, as Cramer added it to his "Pigs gets slaughtered list"(We wrote about that here). Going against Cramer is like bagging the promo queen... We wish we could do it, and when we finally do, didn't realize it would be that easy!

PCLN has ERUPTED from its 445.73 "Cramer Bottom" and hit $526 last week, an $80+ move. Even more spectacular, is the potential profits one can make on a move like this trading the options. We recommended the  $505 JAN 21st calls asking  .85 on Tuesday Jan 17th(READ HERE). Those calls hit a high of $22. So $85 into $2200 potential for each call purchased. Can we thank you enough Cramer?

Check it out as we brought this to out chat room first and we were the first on the planet to buy those calls on Jan 17th:

This is why we trade options, and hope we can continue bringing this type of trading opportunities to our trading community!

The Chase is ON!

The chase is on.... for  performance that is. Now that the SPY has closed above $130, folks are rushing into stocks as the potential to miss the rally, outweighs the possible downside risks.

Now is the time to turn to those old stocks, still fundamentally sound, but beaten down.

Stocks to watch the next few days: PCLN CME ICE CRM.

We are also watching BLK for a bounce on Earnings this morning.