Jon Najarian’s heat seeker has just identified another 2 hot stocks. They’re on his radar – are they on yours?
The Option Monster has aircraft, defense and industrial giant Textron on his radar due to an unusually large trading volume of Jan 22.50 calls and Feb 22 calls.
First and foremost Najarian says he does not consider the activity as a signal of an imminent takeout. “The company won’t be sold at these levels – somebody would be stealing it if that happened.”
Instead, he sees the activity as a vote of confidence in Street chatter that suggests Textron might put divisions up for sale.
And Najarian tells us, the chatter makes sense – he sees synergy for UTX should they buy the Textron's Bell helicopter unit -- or elsewhere if another rival acquires its Cessna division.
Jeff Sprague, the co-founder of Vertical Research Partners has also heard the chatter. “I understand where the speculation is coming from – if you look at Textron it’s an obvious break up candidate; it’s an old school conglomerate.
However Sprague is skeptical. “It’s my personal view that the company is not close to the point of breaking up. They have a relatively new CEO that’s focused on fixing businesses. I don’t think a break up is imminent.”
After the broadcast The OptionMonster tells us he also has SAP on his radar.
Specifically he’s seeing strong interest in the Feb 55 calls .
Najarian tells us the activity is nothing more than a belief among institutional investors that the stock was oversold.
"SAP is still one of the strongest companies in Germany, which is the strongest nation in Europe. The recent decline was not warranted.”
He also tells us he considers the call buying another sign that big investors have made peace with the overseas financial crisis. “I think of the SAP call buying as a vote of confidence in Europe,” he says.
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Trader disclosure: On Jan. 11, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami owns C; Adami owns GS; Adami owns MSFT; Adami owns AGU; Adami owns INTC; Adami owns BTU; Adami owns NUE;
Najarian owns AAPL; Najarian owns BAC; Najarian owns GS; Najarian owns BCS; Najarian owns TXT; Najarian owns URBN; Najarian owns INTC; Najarian owns CMC; Najarian owns FSLR; Najarian owns WYNN; Najarian owns DHI; Najarian owns LEN; Najarian owns WLT;
Shelter Harbor Capital is long LWM
Shelter Harbor Capital is long KRE
Shelter Harbor Capital is long EWZ
Shelter Harbor Capital is long IDX
Shelter Harbor Capital is long FTSE 100
Shelter Harbor Capital is short EWH
Shelter Harbor Capital is short EUROSTOXX
Shelter Harbor Capital is short BRITISH POUND
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