A grocery store with a p/e of 62 can’t miss at all but WFMI has missed by 75%! They are blaming "The Hurricane" – I wish I had that excuse when my homework was late!
In the same statement they say that the hurricane cost them $5-6M in sales but mysteriously accounted for $36M of their earnings shortfall. That must have been some profitable $5M of organic soy candy bars or something….
Last time this company hit this level of overbuying was August where it wnet from $149 to $124 in a month. But that was after great earnings. Since the company is up from $90 this year and gapped up from $120 on last earnings, I’m betting we see $120 again real soon. If their projected growth rate of 20% goes down to 15%, this is a $110 stock tops.
So let’s go for the December $140 puts for no more than a $2 premium or no trade and look for 20% before halfing out. This is a risky one because the stock is close to 90% owned by institutions so it kind of depends by how surprising this news is to them or if they really believe this is just a hurricane thing.
