SIG/Wilsons - We played them about a year ago when they were down about here so I'm not adverse to playing them again:
March 15th, 2018 at 10:53 am | (Unlocked) | Permalink
SIG/Ilene – Looks very good to me. Made $4.28 per $39 share with big growth in ECommerce. Margins were down a bit and they are reducing store count and inventory by about 7%, which incurs some costs and is driving down guidance.
The key takeaway
Signet's fiscal Q4 numbers were decent, but its outlook indicates that it will face some tough headwinds throughout the year. E-commerce only generates a small slice of its revenues, and Signet could struggle against higher-end retailers and bigger e-commerce marketplaces as it attempts to grow them.
I think they are worth a put sale for the LTP since we can sell the 2020 $30 puts for $5 and that's net $25 or $14 off the current $39 (35%) so yes, we can sell 10 of those for $5,000 and promise to buy SIG for a 35% discount!
We cashed them out on the run-up and here they are again at the lows - what a strange stock - especially as they are financially pretty consistent:
| Year End 03rd Feb | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | TTM | 2019E | 2020E | CAGR / Avg | |
| $m | 3,983 | 4,209 | 5,736 | 6,550 | 6,408 | 6,253 | 6,386 | 6,255 | 6,140 | +9.4% | |
| $m | 560.5 | 570.5 | 576.6 | 703.7 | 763.2 | 579.9 | -357.6 | +0.7% | |||
| $m | 359.9 | 368 | 381.3 | 467.9 | 543.2 | 519.3 | -198.2 | 206.2 | 183.1 | +7.6% | |
| $ | 4.35 | 4.56 | 4.75 | 5.87 | 6.93 | 5.73 | -6.83 | +5.7% | |||
| $ | 4.35 | 4.56 | 4.75 | 5.87 | 7.21 | 7.00 | -1.52 | 3.74 | 3.38 | +10.0% | |
| % | +16.2 | +4.9 | +4.3 | +23.5 | +22.8 | -2.9 | -46.6 | -9.63 | |||
| x | 3.42 | n/a | 6.41 | 7.09 | |||||||
| x | n/a | n/a | n/a | 1.53 | |||||||
| Profitability | |||||||||||
Why are they projected to make so much less next year - that's the question?
