Avon landed on Pete Najarian's trader radar, due to a sharp change in options buying.
Until news broke that Avon had replaced its CEO , Pete Najarian had only seen bearish options action in the stock. “Institutional investors had been selling Dec 16 puts frequently,” he tells us.
But now the action has changed – it’s become bullish.
“Today I’m seeing volume in the July 20 calls – that’s something to keep an eye on – somebody out there thinking there’s positives to come.”
As you may know, Avon replaced Andrea Jung as CEO, (though she will remain as chairman) after Jung has attracted the ire of investors because of slumping sales and a federal probe about whether the company broke bribery laws overseas.
Najarian also had an eye on the coffee trade after Green Mountain slipped on Wednesday – near its lows for the year.
Declines were triggered, in part, due to comments from Stifel Nicolaus, which said demand is weakening for the company’s Keurig single-serve coffee machines.
According to analyst Mark Astrachan, shipments of Keurig brewers from China declined 5 percent in October and 28 percent in November, compared with last year.
What’s the trade?
“The trade is long Starbucks ,” says Najarian. “Margins are improving – they raised prices – the spot price of coffee is down – they have a yield and the stock has come off its 52-week highs. I don’t have a position but I’m looking closely.”
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Trader disclosure: On Dec 14, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Scaramucci is long AAPL; Scaramucci is long C; Scaramucci is long INTC; Scaramucci is long EBAY; P. Najarian is long AAPL; P. Najarian is long MSFT; P. Najarian is long INTC; P. Najarian is long YHOO; P. Najarian is long MOS; P. Najarian has long calls BAC; P. Najarian has long calls JPM; P. Najarian has long calls WFC; P. Najarian has long calls BRCM; P. Najarian has long calls JOY; P. Najarian has long calls ETFC; Cortes is long TSN; Cortes is long SVU; Cortes is short EUR; Cortes is short AUD; Cortes is short GBP; Cortes is short Crude; Cortes is short AAPL; Cortes is short DB; J. Najarian sold puts GLD; J. Najarian sold puts AAPL; J. Najarian is long CBOE; J. Najarian is long CME; J. Najarian is long CIGX; J. Najarian has long call spreads JPM; J. Najarian has long call spreads GS; J. Najarian has long call spreads V; J. Najarian has long call spreads PNC; J. Najarian has long call spreads DMND
For Anthony Scaramucci
SkyBridge Capital is a fund of funds manager; funds in which SkyBridge funds invest may or may not own INTC.
SkyBridge Capital is a fund of funds manager; funds in which SkyBridge funds invest may or may not own EBAY.
For Mark Astrachan
Stifel, Nicolaus & Company, Inc. expects to receive or intends to seek compensation for investment banking services from Green Mountain Coffee Roasters Inc. in the next 3 months.
Stifel, Nicolaus & Company, Inc. makes a market in the securities of Green Mountain Coffee Roasters Inc..
Stifel, Nicolaus & Company, Inc.'s research analysts receive compensation that is based upon (among other factors)
Stifel Nicolaus' overall investment banking revenues.
For Chris Caso
SFG is a market maker in the securities of Broadcom Corp. (BRCM).
For Mark Mahaney
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Groupon, Inc.
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Groupon, Inc.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Groupon, Inc. in the past 12 months
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Groupon, Inc.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment banking, non-securities-related: Groupon, Inc.
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues
The Firm is a market maker in the publicly traded equity securities of Groupon, Inc.
For Jens Nordvig
For Rich Ilczyszyn
Ilczyszyn is short gold
For Jeff Bencik
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