Patience is rewarded.
We finally got a nice sell-off and, over the last few days, we went over our watch list and finally got down to 8 actionable trade ideas - plus 9 more short put ideas for the LTP (the ones we didn't pull the trigger on).
This will be long but here's what we discussed in our Live Member Chat Room today:
OK, we’re back to 4,320 so what are our top priority stocks from the Watch List?
BBY – $74.50 is only $16.25Bn and BBY has $44.6Bn in sales and makes about 3% while AMZN has $560Bn in sales and makes about 3% yet AMZN trades at 56x and BBY trades at 12x. It’s not like AMZN is a surprised to consumers and will take BBY’s market share – what they have is pretty solid for reasons I’m sure you are aware of when you find yourself in BBY (or Fry’s for you West-Coasters). And what if I told you they also have $700M net of debt?
https://charts2.finviz.com/chart.ashx?t=bby%20%20\&p=w&s=y
- They made $1.22 in Q2 2023 and this (through Oct) is Q4 for them.. The big money comes in Q1, which is more than double Q4 generally so let’s say that’s 3x $1.22 ($3.66) plus $2.44 is $6.10 so trading about 11x here and 5% of their market cap is CASH!!! Very strong contender for a buy!
C – One of the better banks being treated like one of the worst for some reason. $44.40 is $86Bn at 7x earnings so ridiculously cheap and probably because $208Bn in debt is scary but that’s balanced out by $2.35Tn in Assets under Management.
https://charts2.finviz.com/chart.ashx?t=c%20\&p=w&s=y
- Another perfectly good bank priced like it’s going BK.
CAKE – $31.50 is $1.6Bn and 10.5x. I can’t understand why they are so unloved.
https://charts2.finviz.com/chart.ashx?t=cake%20\&p=w&s=y
- Now just ridiculous under $30.
