Amira Nature Foods Ltd (ANFI) Breakout Inspires Accelerated Options Trading

Food stock Amira Nature Foods Ltd (NYSE:ANFI) has been all over the charts during the past 12 months. In mid-July, the shares shot to an annual high of $14.56, only to fall to an all-time low of $2.51 just a month later. More recently, ANFI jumped above $14 last month, but again slid precipitously following this near-term peak. This has resulted in a 14-day Relative Strength Index (RSI) of 28 -- meaning the stock has technically been oversold.

Today, the shares are on the way back up, rallying a remarkable 27.7% to $10.40 -- making it the leading gainer on the New York Stock Exchange -- thanks to news the company plans to release interim financials this month. ANFI is now back in the black on a year-to-date basis, which is good news for options traders.

Specifically, the stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 11.91, putting it in the 78th percentile of its annual range -- albeit amid extremely light volume. So not only have almost 12 calls been bought to open for every put, but this reading also displays a greater-than-usual appetite for ANFI calls relative to puts.

However, ANFI is heavily shorted, with a short-interest ratio of 5.10. With this being the case, it's possible recent call buyers are short sellers trying to protect themselves from an unexpected surge in the shares -- like we're seeing today.

In late-afternoon trading, both calls and puts are crossing at twice the normal intraday pace. The most popular option is the May 10 put, and if traders are buying to open positions, they're betting on Amira Nature Foods Ltd (NYSE:ANFI) falling back into single digits by the close on Friday, May 20, when the back-month options expire. 

Speculators Pounce on Surging Amira Nature Foods Ltd (ANFI) After Filing

Options volume has exploded on Indian rice concern Amira Nature Foods Ltd (NYSE:ANFI), after the company finally submitted its Form 20-F after missing an earlier deadline. Both calls and puts are trading at five times the average intraday pace. The most popular strike is the February 10 call, with data from the International Securities Exchange (ISE) confirming some buy-to-close activity on the now in-the-money option. 

Close behind is the March 12.50 call, and some speculators may be buying to open positions -- betting on ANFI to topple $12.50 for the first time since late July. The shares will have until the contracts expire -- at the close on Friday, March 18 -- to hit this level. Delta on the strike has jumped from 27% as of Friday's close to 42% today, indicating an increased likelihood of the options expiring in the money. 

If traders are undertaking bullish positions on ANFI today, it'd mark a rare phenomenon. According to data from the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 9.90 puts have been bought to open for every call during the past two weeks. This 10-day put/call volume ratio outranks all but 1% of readings taken in the past year, pointing to a highly pronounced interest in long ANFI puts recently. However, given ANFI's recent outperformance -- it's beat out the S&P 500 Index (SPX) by almost 70 percentage points in the past three months -- some of these put players could be shareholders looking to insure their paper profits. 

But that certainly doesn't mean there aren't ANFI skeptics. In fact, close to 20% of the food stock's float is sold short. What's more, it would take these bears almost two weeks to buy back their bets, going by average daily trading volumes. 

As alluded to, Amira Nature Foods Ltd (NYSE:ANFI) has shot higher today after the company's delayed filing. The stock was last seen sporting a 26.9% lead at $10.53, and on pace to close above its 320-day moving average -- a level that blocked its two previous breakout attempts -- for the first time since July 23. 

Amira Nature Foods Ltd. Given a $21.00 Price Target at Jefferies Group (ANFI)

Jefferies Group set a $21.00 price target on Amira Nature Foods Ltd (NYSE:ANFI) in a research note issued to investors on Tuesday, Stock Ratings Network.com reports. The firm currently has a buy rating on the stock.

Jefferies Group has also modified their ratings on a number of other stocks in the few days. The firm initiated coverage on shares of Foster Wheeler Ltd... They issued a hold rating on that stock. Also, Jefferies Group raised its price target on shares of Methanex Corporation to $65.00. They have a buy rating on that stock.

Amira Nature Foods Ltd (NYSE:ANFI) traded down 0.12% on Tuesday, hitting $14.0132. The stock had a trading volume of 91,744 shares. Amira Nature Foods Ltd has a 52 week low of $6.25 and a 52 week high of $14.85. The stock’s 50-day moving average is $11.08 and its 200-day moving average is $8.84. The company has a market cap of $499.9 million and a P/E ratio of 19.96. Amira Nature Foods Ltd (NYSE:ANFI) last announced its earnings results on Monday, August 26th. The company reported $0.21 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.10 by $0.11. The company had revenue of $110.30 million for the quarter, compared to the consensus estimate of $98.84 million. Analysts expect that Amira Nature Foods Ltd will post $0.96 EPS for the current fiscal year.

A number of other firms have also recently commented on ANFI. Analysts at Deutsche Bank reiterated a buy rating on shares of Amira Nature Foods Ltd in a research note to investors on Wednesday, October 2nd. They now have a $15.00 price target on the stock, up previously from $13.00. Separately, analysts at KeyCorp raised their price target on shares of Amira Nature Foods Ltd from $12.00 to $15.00 in a research note to investors on Wednesday, September 18th. They now have a buy rating on the stock. Finally, analysts at Zacks upgraded shares of Amira Nature Foods Ltd from a neutral rating to an outperform rating in a research note to investors on Wednesday, August 28th. They now have a $9.60 price target on the stock. Six investment analysts have rated the stock with a buy rating; the stock currently has a consensus rating of Buy and an average price target of $14.52.

Amira Nature Foods Ltd. is a provider of packaged Indian specialty rice, with sales in over 40 countries.

About Amira Nature Foods

Founded in 1915, Amira has evolved into a leading global provider of packaged Indian specialty rice, with sales in over 40 countries today. Amira sells Basmati rice, premium long-grain rice grown only in certain regions of the Indian sub-continent, under their flagship Amira brand as well as under other third party brands. Amira sells its products primarily in emerging markets through a broad distribution network. Amira’s headquarters are in Dubai, United Arab Emirates, and it also has offices in India, Malaysia, Singapore, the United Kingdom, and the United States.