SEPT. 30, 2021
10:45ET: Over the last day and a half, Ireland-based fruit and produce company Dole Plc (DOLE). has gotten a lot of attention on Reddit. While it hasn’t been the most talked about, Dole Plc has found its way to the front page of Reddit’s most excitable trading subreddit, r/WallStreetBets.
Much like we saw in our article about Smile Direct Club (SDC), numerous people, traders, and apes have posited their respective YOLOs into the potential pop on Dole’s stock price. After taking a close look, though, it could be that the rationale behind the DOLE pop is more than just a meme.
Just months ago, Dole Food Company moved to combine with fellow produce company, Total Produce to form Dole Plc. Shortly thereafter, the combined entity went public via IPO as a way to refinance and de-lever each company’s respective debts. By combining the two companies, Dole has effectively secured its place as the #1 fresh produce provider. You can see the details in this great write-up by Value Situations.
In the world of options trading, there is some evidence in the flow that seems to indicate that traders are eyeballing DOLE for more than just a short-term pop.
This image, taken the morning of September 30th flow, shows us a heavy focus on the October 15, 2021 striked. This is the sort of flow we have grown to expect from stocks with a heavy Reddit following or presence; short-dated expiries on orders, reflecting traders following the flow. However, we noticed a few long-dated orders, expiring in May of 2022. This led us to take a closer look.
We next filtered the tool to account for Ask-Side only orders with $5k or more in premium, and a minimum expiration date of 50+ days in the future. The resulting image above shows us a broader picture of how traders are preparing for a longer-term strategy.
Under these filters, the May 5, 2022 expiration date becomes the favored target, with the $17.5 call as the main target strike. Although the order sizing is smaller than those two-week-to-expiration in the previous image, this shows us that amid the frenzy to follow this short-term movement, some traders are planning for the future.
This doesn’t come as terribly surprising, however. According to Nasdaq, analyst price targets for the newly formed Dole Plc range from a low estimate of $15 to a high of $26, for an average price target of $19.60. Currently, DOLE is up 4% to $16.48, having reached a high of $17.39 this morning.