Pitt, Maher Join Gosling in Costco Wholesale Corporation (COST) Crusade

Brad Pitt and Bill Maher are among a growing list of celebrities pleading with Costco Wholesale Corporation (NASDAQ:CEO) over caged hens

by Karee Venema

Published on Jul 16, 2015 at 2:59 PM
Updated on Jul 16, 2015 at 3:07 PM

About a month ago, Oscar-nominated actor Ryan Gosling wrote a letter to Costco Wholesale Corporation (NASDAQ:COST) CEO Craig Jelinek lambasting the company for selling eggs from caged hens. More recently, fellow actor Brad Pitt and comedian Bill Maher also reached out to Jelinek asking that COST stop selling the eggs.

"As you know, these birds producing eggs for your shelves are crammed five or more into cages that are not large enough for even one hen to spread her wings," wrote Pitt. Maher, meanwhile, said, "Imagine cramming five cats or dogs into tiny cages, hundreds of thousands in each shed, for their entire lives. That would warrant cruelty charges, of course. But when the egg industry does it to hens, it's considered business as usual." COST maintains in its mission statement that it is "committed to the ethical treatment of animals."

Technically speaking, this attention from Hollywood's elite has done little to impact COST's price action. Month-to-date, the shares have added 6.7% to trade at $144.05. However, the stock is now staring up at its 120-day moving average -- a trendline that has served as a ceiling for the stock since late April.

On the sentiment front, short-term traders have shown a growing preference for calls over puts in recent weeks. In fact, since June 22 -- the start of this expiration cycle -- COST's Schaeffer's put/call open interest ratio (SOIR) has dropped to 0.90 from 1.13, and now rests in the 26th percentile of its annual range. Simply stated, speculative traders are more call-skewed than usual.

In the front-month series, specifically, peak call open interest is found at the July 150 strike, where 4,383 contracts reside. According to the ISE, CBOE, and PHLX, more than 2,200 calls have been bought to open here since April 17, meaning speculators expect COST to be sitting north of $150 at this Friday's close, when the series expires. Costco Wholesale Corporation (NASDAQ:CEO) hasn't traded north of $150 on an intraday basis since April 15.

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