SFD opened this morning at $15.60. So far today the stock has hit a low of $15.28 and a high of $16.20. As of 12:15, SFD is trading at $15.34 up 0.46 (3.1%). The chart for SFD looks neutral and S&P gives SFD a neutral 3 STARS (out of 5) hold ranking.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $13 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in two months as long as SFD is above $13 at August expiration. Smithfield would have to fall by more than 15% before we would start to lose money. Learn more about this type of trade here.
SFD has not been below $14 since November and has shown support around $14.85 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in SFD.