Quaker Oats Company is a major participant in the competitive packaged food industry in the United States and Canada and is a manufacturer of hot cereals, pancake syrups, grain-based snacks, cornmeal, hominy grits and value-added rice products. In addition, the Company is a manufacturer of pancake mixes and value-added pasta products and ready-to-eat cereals.

March 8, 2001

Quaker Oats produces and markets food and beverages, which include well-known brands such as Quaker Oats, Gatorade, and Rice-A-Roni. In early December, PepsiCo (PEP) agreed to buy Quaker Oats. After several weeks of considering various buyout offers and engaging in extensive talks with both Coca-cola and PepsiCo, OAT finally agreed to be acquired by Pepsico. According to the terms of the agreement, PepsiCo will agree to pay $13.4 billion in stock, exchanging 2.3 PepsiCo shares for each share of OAT. The deal is set for an April closing but remains subject to shareholder approval, which is why we have not yet officially dropped OAT from our Candidates Index. To that end, the company currently has 131.93 shares outstanding and 400 million authorized, enough to split shares 2:1. In addition, the stock is trading well above its previous split of $32, which occurred back in 12/94. On Thursday, OAT trended to an all time new high of $99.33, on strong volume of 606,600 shares and uptrending OBV. A move above this price tomorrow when accompanied by midday volume of at least 300,000 shares could be a good entry point for momentum traders. We'll post our stop at $96 for now.

Picked on March 8th @ $99.33
Change since picked 0.00
Stop Loss @ $96.00