Microchip Technology , LSI and Advanced Micro Devices are possible targets for leveraged buyouts, according to Sesquehanna International Group.
So which name is most likely to be taken out? Probably another all together, said options trader Pete Najarian, adding that the companies mentioned have too high of market caps.
"Look for the companies right now that are under about $1 billion, $1.5 billion," said Najarian, co-founder of optionMONSTER.com. "That's likely the targets."
Microchip Tech has a market cap of $6.31 billion, LSI has a market cap at $3.46 billion and AMD has a market cap of $5.25.
All three technology companies are in the semiconductor space. As such, the stocks are in the SPDR S&P Semiconductor exchange-traded fund.
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UNUSUAL ACTIVITY
Ford Motor shares hit another 52-week high Monday, reports Najarian, adding that there's been strong activity in both its stock and options.
One-hundred to 200 million shares of Ford have been traded in the past ten days, he said. Meanwhile, more than 100,000 contracts exchanged hands in the first half-hour of trading Monday. Of those, roughly 90,000 were for the Dec. 17 and Dec. 20 calls.
Most seem bullish on Ford, but Kanundrum Capital founder Brian Kelly thinks valuation is stretched at the point. In the auto space, he prefers Toyota Motor . He likes that Toyota's global auto sales are increasing and said it could also benefit from a weaker yen.
Watch the video to see the full conversation.
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WHALE WATCHING
Renown hedge fund manager David Tepper has trimmed his holdings in major financial institutions, including Bank of America, Citigroup and Wells Fargo.
In the third-quarter, the Appaloosa Management executive sold 4.8 million shares of BAC , 6.5 million shares of Citigroup and 1.5 million shares of Wells Fargo , according to an 13-F filing. He maintained a position in all companies, however, reports CNBC's Melissa Lee.
During the same time period, Tepper bought 6 million shares of Cisco , 3.7 million shares of Hewlett-Packard and 180,000 shares of Intel .
Like all good money managers do, Tepper knew when to lock-in profits, said Stuart Frankel's Steve Grasso.
To see the full conversation on David Tepper's transactions, watch the video—it starts at 1:00.
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CALL TO THE FLOOR: AMERICAN PUBLIC EDUCATION
Shares of American Public Education rose sharply on Monday, as the stock was helped by a tremendous pop following last week's earnings announcement.
