The bulls are hungry for Cracker Barrel Old Country Store.
The casual-dining stock is hitting a new all-time high today after
reporting strong quarterly results and raising its guidance.
Judging by the option activity, investors expect the gains to
Our Heat Seeker tracking program detected unusual volume in the
September 70 calls, with more than 1,300 contracts trading against
previous open interest of just 607. Most of them were purchased for
$0.15 to $0.40.
Those investors now have the right to buy CBRL shares for $70
through the end of the week, so they could generate significant
leverage if the rally continues through Friday's close. Otherwise,
the contracts will expire worthless
CBRL is up 6.95 percent to $68.04 in morning trading after gapping
higher at the open. The company earned $1.47 a share on sales of
$700 million in its fourth quarter ended Aug. 3. That beat
analysts' estimates for profit of $1.30 and revenue of $700
Operating margin also expanded by 2.4 percentage points after
management controlled costs. Guidance was strong, as well, thanks
to improving sales trends and planned restaurant openings.
CBRL normally only trades about 200 option contracts in a session,
but volume is more than 14 times that amount today. Calls
account for more than 85 percent of the total, so it's definitely a
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