Kohl's Stock Rises After Letter to Shareholders, Potential Bid

Acacia Research expressed interest in bidding for the retailer

Deputy Editor
Jan 18, 2022 at 11:31 AM
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Kohl's Corporation (NYSE:KSS) stock is up 4.5% to trade at $49.90 today, after activist investor Macellum Advisors, which holds a 5% stake in KSS, issued a letter to Kohl's shareholders. The firm pointed to the stock's underperformance this past year, and said that they should explore strategic alternatives, including a sale, if "unwilling to pursue improvements." After trading flat before the bell, KSS jumped higher after Acacia Research (ACTG) reached out to express interest in making a bid for the retailer.

Today's pop has the stock rising above its year-to-date breakeven, after a volatile couple weeks on the charts. The $45 level has provided support for the equity's pullbacks since late December, however, KSS has also been dealing with pressure at the $51 level. 

There is plenty of room for upgrades that could provide tailwinds for Kohl's stock. Of the nine analysts in coverage, four carry a "strong buy rating," with two a "hold," and three a "sell" or worse. Meanwhile, there is short-covering potential as well, with short interest representing 11.6% of the stock's available float, or over four days' worth of pent-up buying power. 

It's also worth noting that options traders have been much more bullish than usual in the last 10 weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KSS sports a 50-day call/put volume ratio of 3.67, which stands higher than 97% of readings from the past year. 

 

 

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