TSLA and AAPL giving some back.
AKS/Albo – That's an ugly chart:
I'm not a fan of their 1% margins. $6Bn in sales to make $67M seems like too much work to me though they are only asking $1.4Bn for the whole company (20x) so not unfair at $4.45 and it would only take a very tiny increase in steel prices, like 5%, to give them a $300M (5x) pop in profits.
| Year End 31st Dec | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | TTM | 2018E | 2019E | CAGR / Avg | |
| $m | 5,934 | 5,570 | 6,506 | 6,693 | 5,883 | 6,081 | 6,395 | 6,935 | 7,101 | +0.5% | |
| $m | -128.1 | 135.8 | 139.4 | -211.2 | 230.2 | 220 | 161.1 | ||||
| $m | -1,027 | -46.8 | -96.9 | -509 | -7.80 | 6.20 | -32.2 | 226.2 | 263.4 | ||
| $ | -9.09 | -0.34 | -0.65 | -2.87 | -0.034 | 0.12 | -0.018 | ||||
| $ | -9.09 | -0.34 | -0.65 | -1.68 | -0.034 | 0.27 | 0.14 | 0.70 | 0.88 | ||
| % | -72.3 | +156.2 | +25.7 | ||||||||
| x | 16.2 | 32.1 | 6.32 | 5.03 | |||||||
| x | 0.10 | 0.21 | 0.25 | n/a | |||||||
| Profitability | |||||||||||
And what StJ said!
HBI/Batman – Idiots. I'm so tired of perfectly good stocks going out of favor and what passes for analysts these days piling onto the negative bandwagon (works the other way too). So few people do real work these days because the pay is no good (anyone decent works for a fund or does private work) and no one actually tracks results – so what's the difference?
A sad side-effect of the web is that it has destroyed accountability. Of course, these reports don't take into account our ability to make PLENTY of money from a flat stock:
Hanesbrands' stock valuation remains "undemanding" even after the initial 19-percent sell-off, the analyst said. The stock was trading at 9.7 times Barclays' 2019 earnings per share estimate, which represents a 34 percent discount versus its peers but a lack of positive catalysts should prevent investors from buying the dip. On the other hand, the steep valuation discount versus its peers also implies a limited potential downside from current levels.
That's all we need to know to sell puts and buy a spread. As I noted yesterday:
- Sell 10 HBI 2020 $18 puts for $2.80 ($2,800)
- Buy 15 HBI 2020 $15 calls for $4.20 ($6,300)
- Sell 15 HBI 2020 $23 calls for $1 ($1,500)
That's net $2,000 on the $7,500 spread so $5,500 (275%) upside if HBI can get back to $23 in two years. With 15 longs, as it recovers, we can sell 5 short-term calls for income like the Oct (78 days out of 533) $20s for $1 (now 0.30), which is the price of the $18s, so a move to $20 would do it. That would return $500 maybe 6 times for $3,000 – a nice bonus while you wait.
As long as HBI holds $18, the spread is $4,500 in the money for a $2,500 gain, which is "only" 125% but not terrible for a stock that flat-lines. As long as we find a good bottom – we don't actually need the stock to go higher.
