GO
Loading...

Halftime—Jon Najarian: M&A Talk Driving Options In This Name

Thursday, 27 Jan 2011 | 1:43 PM ET

To avoid a takeover, Sara Lee's board is reportedly moving toward a break-up of the company. As a result, the stock sold-off and options activity was strong on Thursday.

From the options market, Jon Najarian there was strong buying of the Mar. 17 puts at 25 cents. As the stock fell by more than $1 a share, those options doubled to 50 cents.

Najarian himself is out of this trade. He said he'll continue to watch Sara Lee, but doesn't expect it to have additional downside.

Based in Downers Grove, Ill., Sara Lee makes a range of food and food-related products. It sells its good unders a variety of brands, including Hillshire Farm, Jimmy Dean, Holsum, Sunbeam and Sun-Maid, among others.

---
POPS & DROPS

Stocks traded slightly higher as the major indices brushed against significant benchmarks amid mixed economic and earnings news and light trading as the Northeast dug out from another major snowstorm. The "Fast Money" traders didn't let a little snow stop them from commenting on these market movers, though:

Pops (stocks that went up)

Citrix Systems (CTXS) popped 2%: The technology company beat earnings-per-share forecasts by 5 cents and raised revenue guidance, as well. Najarian noted the stock has pulled back from its original pop, but didn't indicate whether or not he would buy shares.

Covidien (COV) popped 1.25%: The healthcare product manufacturer saw shares rally after news broke it will soon enter the S&P 500. This company has "great organic growth," said Stuart Frankel's Steve Grasso. He's a buyer.

Teradyne (TER) popped 11%: Shares of this tech company rallied after fourth-quarter profit more than tripled. Its semiconductor-equipment tester also gave an upbeat first-quarter forecast.

Drops (stocks that went down)

Colgate-Palmolive (CL) dropped 2.5%: The consumer goods giant reported a fourth-quarter profit of $1.24 a share and a slightly lower quarterly net income, as it spent more to promote new products and had lower sales in the U.S. Guy Adami, managing partner at Drakon Capital, thinks the stock would "once again" be interesting should it fall a few more dollars.

---
CALL THE CLOSE

Before the end of Thursday's program, the "Fast Money" traders stated where they think the market could go and how they're trading it.

"I'm seeing a very narrow move in the VIX," Najarian said. "I think that means [we could] trade higher, as people wait a little bit for the earnings that are due."

Adami thinks the market could go higher after Amazon reports earnings following Thursday's closing bell.

Grasso remains a buyer of the market.

Terranova likes Qualcomm , a technology company based in San Diego.

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Jan. 27, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian owns (F), is short (F) calls. Jon Najarian owns (FRO), is short (FRO) calls. Jon Najarian owns (GS), is short (GS) calls. Jon Najarian owns (GM), is short (GM) calls. Jon Najarian owns (WMT), is short (WMT) calls. Jon Najarian owns (VZ), is short (VZ) calls. Jon Najarian owns (SNDK), is short (SNDK) calls. Jon Najarian owns (SLE) puts. Jon Najarian owns (GDX) puts. Jon Najarian owns (AMZN) call spreads. Guy Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE) and (BTU). Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE), (PRST) and (S). Joe Terranova Owns (VRTS), (C), (UPL), Terranova Owns (GM), (PEP), (TLT), (MS), (POT), (AAPL), (ARUN), (LTD), (PVH), (CVI), (CVE), (CPX), (CNQ), (FCX). Joe Terranova is short Gold.

GE is the parent company of CNBC
NBC Universal is the parent company of CNBC

GUY ADAMI
Adami's wife works for (MRK)

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (ABX)
Stuart Frankel & Co and its partners own (CSCO)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NEM)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own (S)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (NCRI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)

ANTHONY SCARAMUCCI
Scaramucci has no disclosures

HEATH TERRY
Terry has no disclosures on (NFLX)

CNBC.com with wires.

  Price   Change %Change
AMZN
---
QCOM
---
VIX
---

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.