Packaged foods producer The J.M. Smucker Company (SJM) has traded flat over the past year, even as the overall stock market has rallied by over 30%. One trader sees shares breaking higher into 2025.
That’s based on the January 17, 2025, $120 calls. With 72 days until expiration, 6,052 contracts traded compared to a prior open interest of 293, for a 21-fold rise in volume on the trade. The buyer of the calls paid $2.80 to make the bullish bet.
Smucker shares recently traded for about $114, so they would need to rise by $6, or about 5.2%, for the option to move in-the-money. The strike price of the option is about midway between the current price and the stock’s 52-week high of $134.62.
Operationally, Smucker has had a mixed year, with revenues jumping 18% but earnings up just 1%.
Although shares are currently flat over the past year, the stock has been more broadly range-bound.
Action to take: Long-term investors may like shares near their current price or on any drop lower. Smucker pays a 3.8% dividend at current prices, and has a history of increasing its payout over time.
For traders, the January $120 calls could see mid-to-high double-digit returns if shares move towards the higher end of their trading range. If shares hit $120, traders may want to take profits since the stock has struggled past the $120 range over the past few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.