Archer Daniels Midland has reportedly made efforts to buy rival Bunge
While biotech mergers have dominated the headlines today, reports of a possible team-up in the agriculture industry have also raised eyebrows. Specifically, Archer Daniels Midland Company (NYSE:ADM) could be testing the M&A waters, after it was reported the company proposed a takeover of rival grain trader Bunge Ltd (NYSE:BG). Below, we will break down how ADM stock has reacted to the news.
At last check, ADM stock was up 3.9% to trade at $42.55, on track for its best single-day session in over a year. The equity has tacked on 6% year-over-year, and the rise today has taken the shares past their 80- and 200-day moving averages for the first time since early November. On the other hand, they topped out near $42.50, near their late-October bear gap.
Analysts remain skeptical. Of the 12 brokerages covering ADM, 10 rate the shares a "hold" or "strong sell." If the stock can extend today's upside, there's potential for bullish analyst attention to come through.
It seems recent option buyers are banking on continued upside for ADM. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 10-day call/put volume ratio of 2.96. Not only does this indicate that calls have outranked puts by a nearly three-to-one ratio, this reading sits in the 89th percentile of its annual range.
Digging deeper, the March 43 call saw the largest increase in open interest during this time. Anyone who bought to open this option is betting on Archer Daniels stock to keep rising. In today's trading, calls and puts are both seeing accelerated volume, with total options volume pacing for an annual high.