Household goods manufacturer Newell Brands (NWL) is up 22% over the past year, lagging the stock market. But shares are starting to trend higher in recent sessions. One trader is eyeing further profits in the months ahead.
That’s based on the March 21, 2025 $11 calls. With 123 days until expiration, 10,070 contracts traded compared to a prior open interest of 164, for a 61-fold rise in volume on the trade. The buyer of the calls paid $0.30 to make the bullish bet.
Newell shares recently traded for about $9.00, so they would need to rise by $2, or about 22.2%, for the option to move in-the-money. The strike price of the calls is well over the stock’s 52-week high of $9.68.
Operationally, Newell has been struggling with a turnaround. Revenues are still down 5% over the prior quarter, and earnings growth has been negative. Plus, Newell still has a upside-down balance sheet with over $5.6 billion in debt.
Action to take: Newell shares are trending higher and on an earnings basis, the stock is far cheaper than the overall market at 12 times forward earnings. There could still be some notable upside ahead for shares for momentum investors. Plus, at current prices, shares pay a 3.1% dividend.
For traders, the March $11 calls are inexpensive and well-positioned for a year-end rally. Traders may want to take profits going into the start of next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
