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Aug.26
3:40 PM ET
Tuesday, 26 Aug 2008
Eye On Options

Options action suggests keeping an eye on the shippers.

According to Jon Najarian investors are putting big money into out of the money calls in Excel Maritime [EXM  Loading...      ()   ], one of the many companies that transport cargo such as iron ore, coal and grain across the seas.



The options action suggests the stock could soon move higher. In this circumstance the catalyst is talk of a potential takeover.

Usually Jon Najarian is cautious about acting on speculation but this time he feels there might be some substance behind the talk. “With rivals such as Diana Shipping [DSX  Loading...      ()   ] and DryShips [DRYS  Loading...      ()   ] trading far from their highs of earlier in the year there could be consolidation in the space,” he says.

And even if there’s not a takeover, Najarian still likes the shippers from the long side. Demand for their cargo should remain strong, he says. As a result Excel could be a smart play going into Q4.


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