CAG Inches Higher on Potential Million-Dollar Hebrew National Sale

The equity has been facing technical trouble at the $37 level since October

Deputy Editor
Mar 10, 2021 at 9:24 AM
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Conagra Brands Inc (NYSE:CAG) is inching higher this morning, up roughly 0.02% at $36.04 amid reports that the packaged food company is in talks to sell its Hebrew National hot dog brand to Brazil-based company JBS. According to a Wall Street Journal report, the deal could be worth $700 million, and could also include the sale of Conagra's Egg Beaters and Odom's Tennessee Pride brands. 

While CAG sports a year-over-year lead of roughly 30%, the equity has been contending with pressure at its $37 level since dropping south of here in late-October. Though this region is still acting as a ceiling for Conagra stock, the 320-day moving average has moved in as solid support during the past several months. 

Analysts have the $37 level ticked off as a ceiling for the security, too. In fact, the 12-month consensus price target sits at $37.94, and represents a muted 5.3% premium to last night's close. The brokerage bunch looks split on the equity, with five calling it a "strong buy," and four doling out a tepid "hold." 

Short-term option traders have rarely been more call-biased, however. This is per CAG's Schaeffer's put/call open interest ratio of 0.38, which stands higher than just 12% of readings from the past 12 months. 

Thank being said, now looks like an opportune time to get in on Conagra stock's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 25% stands in the extremely low third percentile of its annual range, implying option players are pricing in relatively low volatility expectations at the moment. 

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