Campbell Soup Stock Boosted By Kraft Buyout Rumors

General Mills is also reportedly interested in buying Campbell Soup Company

Managing Editor
Jun 25, 2018 at 9:39 AM
facebook X logo linkedin

Campbell Soup Company (NYSE:CPB) stock is up 8.6% to trade at $41.95, after the New York Post reported that Kraft Heinz (KHC) is interested in buying the packaged food maker. The report also cited General Mills (GIS) as a possible suitor for Campbell, which earlier this month expressed openness to exploring strategic options. The news was followed by a price-target hike to $32 from $30 at Credit Suisse, although the analyst in coverage expressed doubt that Campbell's majority stakeholders would sell the company. 

It's been a rough year for Campbell Soup stock, which had shed shed 20% year-over-year as of Friday's close and fell to a more than five-year low of $32.63 on June 7. However, the shares have now filled their mid-May earnings-induced bear gap. Since then, the shares have bounced back more than 28%, and now trading above their 80-day moving average for the first time since mid-February. 

Options buyers are likely happy about the recent surge. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Campbell stock has racked up a 10-day call/put volume ratio of 6.21 -- in the 92nd annual percentile. This indicates that traders have bought to open CPB calls over put at a faster-than-usual clip during the past two weeks.

Of course, brokerages are still down on the stock. Of the 13 analysts covering the security, 11 rate it a "hold" or worse. Furthermore, the equity's average 12-month price target of $35.69 sits below its current perch.

Meanwhile, short interest increased by 30% in the two most recent reporting periods to 36.04 million shares, the most since at least 2002. This represents nearly 20% of CPB's total available float, and more than four days of pent-up buying power, going by average daily volumes.


Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!




Rainmaker Ads CGI