Electrical Stock Rises After Elliott Builds Stake

Activist investor Elliott built a $1 billion-plus stake in JCI

Johnson Controls International PLC (NYSE:JCI) stock is jumping to two-year highs, up 4.3% at $71.95 at last glance, after reports that activist hedge fund Elliott built a $1 billion-plus stake in the electrical name. The company also today announced a cash offer for up to $90 million in aggregate principal amount of securities. 

Johnson Controls International stock only had two negative days since the start of May, after it jumped off the 80-day moving average at the $60 level. Headed for its highest daily percentage gain since February, the equity is up 23.4% since the start of the year. 

Over in the options pits, calls are running at double the intraday average amount, with the most activity at the June 70 call. Options traders have been more bullish than usual leading up to today too, per JCI’s 50-day call/put volume ratio of 8.29 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks higher than 98% of readings from the past year. 

These options traders are in luck, as the equity sports affordably priced premiums at the moment. The stock’s Schaeffer’s Volatility Index (SVI) of 20% sits in the 10th percentile of its annual range, indicating options players are pricing in low volatility expectations for JCI. Plus, its Schaeffer’s Volatility Scorecard (SVS) stands at an 89 out of 100, indicating the stock’s exceeded option traders’ volatility expectations in the past 12 months.

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