Clorox Gains as Traders Wager Shares Will Extend Rally
July 11, 2011, 4:52 PM EDTBy Jeff Kearns and Lauren Coleman-Lochner
(Updates with shares and options trading, starting in first paragraph.)
July 11 (Bloomberg) -- Clorox Co. advanced the most in five months, and bullish options trading surged to 38 times the four- week average as investors boosted bets that the maker of the namesake bleach will extend this year’s 11 percent gain.
The shares gained 2.8 percent to $70.05 at 4:15 p.m. in New York after rising as much as 5.7 percent. More than 16,000 calls to buy the Oakland, California-based company changed hands, the most since October and 10 times the number of puts to sell. The most-active contracts were July $70 calls, which expire at week’s end.
“Clorox has been the subject of takeover chatter on several occasions over the years, which in the past tended to drive up the price of the underlying as well as call volume and options implied volatility,” Caitlin Duffy, an options analyst at Interactive Brokers Group Inc., wrote in a note today.
“No rumors have come to our attention today, but shares are soaring, calls are in high demand and implied volatility is up sharply,” said Duffy, who’s based in Greenwich, Connecticut.
Clorox spokesman Dan Staublin declined to comment.
Billionaire investor Carl Icahn reported a stake of about 9.1 percent in a February filing, making him the company’s largest holder.
Icahn, 75, built his reputation as a corporate raider in the 1980s, targeting companies such as Phillips Petroleum Co. and Texaco Inc. He has also sparred with management at Time Warner Inc. and Yahoo! Inc. He often spends years holding stocks as he waits for investments to pay off.
Clorox owns disparate brands including Hidden Valley salad dressing, Burt’s Bees skin care and Kingsford charcoal.
Clorox reports quarterly results on Aug. 3. In May, the company forecast 2012 earnings that fell short of analysts’ estimates, citing higher-than-anticipated commodity costs and a challenging environment. Chief Executive Officer Don Knauss has sought to boost overseas sales and revenue from higher-margin products at the Oakland, California-based company.
--Editors: Robin Ajello, Kevin Orland
To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Lauren Coleman-Lochner in New York at llochner@bloomberg.net
To contact the editors responsible for this story: Robin Ajello at rajello@bloomberg.net; Nick Baker at nbaker7@bloomberg.net
