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By Mike Yamamoto

Buyers are piling into Kellogg (NYSE:K) today after the cereal company announced that it is buying Procter & Gamble's (NYSE:PG) Pringles brand.

optionMONSTER's Heat Seeker system shows that 8,374 calls have traded in a strong buying pattern against open interest of 5,015 contracts. Premiums began the day at $0.20 and have shot all the way up to $0.95 as the stock has run higher.

K is up 5.25 percent to $52.94 even as the broader market turns negative this afternoon, blowing through its 100-day moving average and now sitting pennies below the 200-day level. Technical traders may be looking for shares to continue filling a gap that opened in early November when the stock fell from above $54 on weak third-quarter earnings and guidance.

Earlier this month the company beat fourth-quarter earnings and revenue estimates, citing higher prices. Many analysts say that Kellogg will benefit further from the $2.7 billion Pringles purchase, allowing the company to expand both its product line and its international business.

Kellogg announced the surprise purchase in the pre-market today as an earlier deal to sell Pringles to Diamond Foods (NASDAQ:DMND) fell through amid that company's accounting scandal.

Overall option volume in the name is 21,394 so far today, nearly 7 times its daily average. Calls at all strikes outnumber puts by 5 to 1, a reflection of the session's bullish sentiment.

Source: Buyers Are Hungry For More Kellogg Gains