Hard to say why we are seeing such strength all of the sudden. Not that I didn't believe CQB to be undervalued... the current price is still low when you consider forward PE and several other measures. But, a surge like this could be more than the result of some fund managers opening their eyes. Amazingly, CQB has increased about 40% in about 6 weeks, and after hitting a 52-week low in late November, it is now only 10% under its 52-week high. That is bizarre.
One thing to consider is that there has been a large short position for quite some time. It was at around 14% not long ago, and more recently stood at about 10%. No doubt, those guys are getting their nards squeezed this week, so it is helping to fuel whatever else might be happening.
I believe the chances that someone is accumulating CQB with a mind to force some action, or some kind of M&A situation materializing are about 50/50 at this point. As I've said several times, there has been a lot of such activity in the food sector, with Del Monte being taken out and rumors now swirling about Sara Lee.
Someone also mentioned what is happening with commodity prices, and there is reason to believe that grocery prices are going to rise noticably in 2011. While banana costs have gone up some, for the most part, CQB is not experiencing the same kind of cost pressure as those who make products from grains, corn, and soybeans. However, it is reasonable to surmise that either CQB will be "allowed" to raise prices regardless of costs, or they will hold pricing steady and consumers will gravitate toward what they perceive as better values in the grocery aisle.
There's a lot of session left today, so no telling where we end up. It could continue to get interesting here.