SJM is moving lower while TWNK soars
J.M. Smucker Co (NYSE:SJM) agreed to buy Hostess Brands (TWNK) in a deal worth roughly $5.6 billion. At last glance, SJM was down 7.5% at $130.97 after the merger news, while TWNK soars to record highs.
Now trading at its lowest level in a little over a year, SJM carriesa 16.9% year-to-date deficit. The stock just gapped below all its short- and long-term moving averages, as well as the $139 region that saved it on a closing basis during August’s pullback.
In the options pits, SJM has already seen 17 times the average daily options volume today, with 807 calls and 1,735 puts exchanged. The October 120 put is the most active contract, with new positions being sold to open there.
Leading up to today, options traders leaned bullish. J.M. Smucker stock’s 50-day call/put volume ratio of 1.97 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 94% of readings from the past year.
Analysts are carrying a different sentiment, however. Of the 12 analysts in coverage, 11 carry a “hold” or worse rating, with just one a “strong buy.”