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Hawk’s Nest

Unusual Call Buyer in Energy Name with M&A Rumors Swirling

by | Oct 4, 2024

Ovintiv (OVV) saw a Friday buyer of 1000 November 2025 $55 calls at $2.85 offer into strength as the oil stock was up +15% nearly on the week and closed with a big bull engulfing candle back over its 55 day MA and the 200 week moving average. The call buy comes just days after rumors of M&A chatter after Street Insider said the company is rumored to have been approached by Coterra Energy (CTRA) about a takeover. Ovintiv is said to have hired an investment bank amid the overture. OVV is a $11.4B mid cap oil and gas name with a quality balance sheet and trading at just 8x earnings with a 2.75% dividend yield. OVV is flat year to date but shares now rebounding back into yearly value area and potential to rotate up to 50 even if there is no takeover deal. The Nov 2025 call buyer sees quite a bit of value at these levels and potentially positioning for a bigger upside advance into 2025 as the risk/rewards are skewed to the upside for energy stocks as company fundamentals and operational momentum remain solid.