Kroger: Stay Put with Put Positions
04/25/2017 2:48 am EST
News of Jana Partners taking a large position in Whole Foods (WFM) lifted the entire grocery group. Traders speculated that Jana would enlist Kroger or privately held Albertson’s as a partner to revamp Whole Foods.
Based on Jana’s history, I find this unlikely as the private equity firm typically uses its robust internal team to devise turnaround plans.
I think the put trade is still a good one and would suggest anyone looking for a new option trade to buy these July 27.5 puts which are trading about 60c versus my $1.03 entry point.
Bullish speculation should be replaced with disappointment in sales and profit trends when Kroger announces earnings on June 15.