The tobacco name has lost billions after investing in Juul
Altria Group Inc (NYSE:MO) announced earlier it will buy e-cigarette startup NJOY for roughly $2.75 billion in cash. The company is exiting its investment with Juul, which was worth about $250 million in December, compared to the $12.8 billion it invested in 2018. MO is up 0.6% to trade at $46.80 this morning.
The $46 level has supported the equity since early February, while the 40-day moving average has also acted as a floor. Shares could today string together their third-straight win, but still carry a 13% year-over-year deficit.
The options pits remain firmly optimistic toward Altria stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 5.24 stands higher than all but 8% of readings from the last 12 months. In other words, calls have been getting picked up a much quicker-than-usual clip.
Now appears to be a good time to weigh in on the security's next move with options. MO is seeing attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 17%, which sits at the bottom of its annual range.