Is this bunny running on empty? Energizer (ENR)

by Houghton and Atkeson   10/27/08
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Options in Energizer (ENR) are running 30 times their usual trading volume. The copper-top company hit a 52-week low of $44.44 this morning. WIth earnings scheduled for this Thursday, Oct. 30, market participants have traded 9,385 ENR Nov 45 Puts (ENRWI) for $3.70. Is that expensive insurance?

Energizer is expected to earn $5.60 for their fiscal year which ended in September and $6.43 next year -- which, at the low this morning, is eight times and seven times earnings, respectively.

These investors may be hedging a long position or making a directional bet. The good news is that we will know on Halloween who is wearing the bunny costume.


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