TGT/CRS - We used to have them last year from the $50s but $75+ was a bit much so we didn't go back in. Of course they "disappointed" unrealistic expectations. They spent a lot of money on on-line to keep up and are "only" making $5.25/share. How that causes a sell-off in an $80 stock (p/e 15.25) is beyond me - where are these idiots running to? NFLX at 200x earnings?
MU/Dave - Another one I used to love at $10 just 2 years ago but very hard to get excited at $54, though they've certainly grown to keep up with it, dropping $5Bn to the bottom line last year on a $62Bn market cap makes them still very reasonable - especially in this space. So yes, I do like them - even at $54 but I'd still go conservative:
- Sell 10 MU 2020 $40 puts for $5.25 ($5,250)
- Buy 20 MU 2020 $35 calls for $24.50 ($49,000)
- Sell 20 MU 2020 $50 calls for $16.50 ($33,000)
That's net $10,750 on the $30,000 spread that's $30,000 in the money so the upside is $19,250 and you can sell 4 (20%) of the April $44 calls for $3.40 ($1,360) while you wait as that's 45 days out of 682 you have to sell so you can work that $10,750 down to zero while you wait for your $40,000.
Steel/Jabob - MT is still my favorite. Plenty of places for them to sell and ridiculous cheap at $33 (33.4Bn) with $5Bn in earnings last year. They are down 15% on tariff news while the US companies are up 15% because they have to be protected from those mean foreigners. Who do you bet gets drafted for the football team, the bully or the wimp who had to be saved by his mommy?
- Sell 10 MT 2020 $30 puts for $4.25 ($4,250)
- Buy 20 2020 $30 calls for $8.60 ($17,200)
- Sell 20 2020 $37 calls for $5.20 ($10,400)
That's net $2,550 on the $14,000 spread and that one we can add to the LTP as we have no steel stocks.
