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Get Downside Protection on Heinz (HNZ) Ahead of Earning, Conference - Goldman

February 8, 2012 10:56 AM EST
HNZ Hot Sheet
Rating Summary:
    3 Buy, 1 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 20 | Down: 11 | New: 38
H.J. Heinz Co. (NYSE: HNZ) is trading higher, but investors might want to prep for a couple of upcoming events which may not play out well for bulls.

Ahead of Heinz earnings on February 17th, as well as the Consumer Analyst Group of New York conference on February 20th, Goldman Sachs is taking a cautious stance and recommending to buy some downside protection. Specifically, the analysts are recommending March 50 puts, which are currently priced at $0.45.

For 10, covering 1,000 shares, your current breakeven would be if the stock moves to $49.55 (less transaction costs), or a 4.6 percent drop from current levels.

Shares of Heinz have traded within a range of $46.99 to $55, so not a real big mover. Volatility is also slightly elevated to 19.7 percent (though the option carries volatility of 16.6 percent).

For its third-quarter, Heinz is expected to report earnings of 85 cents and revenue of $2.89 billion. Shares are up about 0.3 percent Wednesday.


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