Dollar over 95. /KCN9 @ $110.
DIS/Yodi - DIS is a 20-year hold to me. They are in a very heavy spending cycle with the Star Wars parks but if they do half as well as Universal's Harry Potter Park, they'll add Billions to the bottom line. Meanwhile, ESPN will keep struggling and that will keep a lid on growth as they really have to figure out how to remodel their revenues against cord-cutting. Sounds like you nailed your targets for the Q and I think $110 is still the right line for next Q, though DIS would not be exempt from a crash so I'd go lighter on the short puts.
HBI/Tangled - Certainly they are undevalued at $17.50 as that's $6.3Bn with $7Bn in sales and $635M in profits (10x). They did some restructuring last year and took a big hit in Q4 but should come out with $1.75 per share this year so a good, steady thing to own whenever it's low in the channel.
| Year End 30th Dec | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | TTM | 2018E | 2019E | CAGR / Avg | |
| $m | 4,526 | 4,628 | 5,325 | 5,732 | 6,028 | 6,471 | 6,631 | 6,772 | 6,850 | +7.4% | |
| $m | 440.1 | 515.2 | 564 | 595.1 | 775.6 | 723.1 | 739.2 | +10.4% | |||
| $m | 164.7 | 330.5 | 404.5 | 428.9 | 539.4 | 61.9 | 38.8 | 634.8 | 672.2 | -17.8% | |
| $ | 0.58 | 0.81 | 0.99 | 1.06 | 1.40 | 1.41 | 1.36 | +19.5% | |||
| $ | 0.58 | 0.81 | 0.99 | 1.06 | 1.40 | 2.29 | 1.96 | 1.75 | 1.89 | +31.6% | |
| % | -5.1 | +40.0 | +22.2 | +7.2 | +31.4 | +64.1 | +16.4 | -23.7 | +7.86 | ||
| x | 7.64 | 8.93 | 10.0 | 9.28 | |||||||
| x | n/a | n/a | 1.27 | 3.22 | |||||||
| Profitability | |||||||||||
In fact, we do not have HBI in the LTP so let's add it!
- Sell 30 2020 $18 puts for $2.70 ($8,100)
- Buy 50 2020 $13 calls for $5 ($25,000)
- Sell 50 2020 $20 calls for $1.45 ($7,250)
That's net $9,650 on the $35,000 spread that's $4.50 ($22,500) in the money to start and, of course, when HBI gets up in the channel again, we can sell some short calls to whittle down the basis but the upside potential on just this is $25,350 (262%) and that's just 17 months away!
