Today’s tickers: STZ, EL & SKS
STZ – Constellation Brands, Inc. – Cheers to traders that got long call options on beer distributor Constellation Brands prior to- and following reports AB InBev NV may purchase the rest of Grupo Modelo SAB for $20.1 billion. Constellation’s shares spiked 14.0% on Monday with deal-chatter a-brewing and exploded to the upside today on news the company will purchase the other half of Crown Imports, a joint venture with Grupo Modelo, making Constellation the sole U.S. importer of Corona and Crown’s other brands. Shares in STZ jumped nearly 26% today to a new 5-year high of $27.40, driving up the value of Constellation Brands call options. One Monday we noted the purchase of around 1,500 of the July $20 strike calls, initiated back on Friday, June 22nd, at $0.40 per contract. The big move in the stock on Monday saw the value of the contracts increase five-fold over the weekend to $2.30. Today it looks like the value of the long $20 strike call position is up 1,625% over the original purchase price based on the call’s last traded price of $6.90. Traders that snapped up Aug. $20, $22.5 and $25 strike calls on Constellation on Monday are also sitting pretty today, with triple digit percentage increases in premium in each of those contracts this afternoon.
EL – Estee Lauder Companies Inc. – Shares in the maker of skin care, makeup and fragrance and hair care products sold under brands including La Mer and Bobbi Brown rallied 2.6% to $54.32 at the start of the session, helped higher by positive news out of Europe and an ‘Outperform’ rating initiated at Wells Fargo. The stock is off its highest levels of the session and options activity on the stock suggests the shares could reverse gains in the near term. Front month puts are the most active options on Estee Lauder this morning, with more than 3,100 puts trading at the…
