OK, I think this news item is actionable as I really like MIDD anyway, they make my beloved Viking ranges but only $2.7Bn in sales and $320M in profit so this deal can really move the needle on the $6.3Bn valuation at $112:
Middleby said to be on McDonald's radar
- Shares of Middleby (MIDD +1.3%) are on watch after Buckingham Research suggests the company could land oven business from McDonald's in front of the fast-food chain's launch of a crispy chicken sandwich.
- Middleby trades on the low end of its 52-week range of $105.77 to $142.98.
For the Long-Term Portfolio (LTP), let's:
- Sell 10 MIDD Dec $110 puts for $10.70 ($10,700)
- Buy 10 MIDD Dec $100 calls for $19 ($19,000)
- Sell 10 MIDD Dec $120 calls for $9 ($9,000)
That's a net $700 credit on the $20,000 spread that's $10,000 in the money at the moment. Upside potential is $20,700 (2,957%) in less than a year and our worst case is owning 1,000 shares of MILL at $110, but then we can sell the next year's $100 calls for $20 and drop our net to $90 so not much downside there.
| Year End 29th Dec | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | TTM | 2019E | 2020E | CAGR / Avg |
|---|---|---|---|---|---|---|---|---|---|---|
|
$m
|
1,429 | 1,637 | 1,827 | 2,268 | 2,336 | 2,723 | 2,896 | 2,938 | 3,038 | 13.8% |
|
$m
|
244 | 300 | 303 | 419 | 379 | 446 | 483 | 12.8% | ||
|
$m
|
154 | 193 | 192 | 284 | 298 | 317 | 325 | 354 | 401 | 15.6% |
|
$
|
2.74 | 3.40 | 3.36 | 4.98 | 5.26 | 5.70 | 5.84 | 15.8% | ||
|
$
|
2.74 | 3.64 | 4.07 | 5.10 | 6.16 | 5.96 | 6.13 | 6.66 | 7.33 | 16.9% |
|
%
|
+26.4 | +33.2 | +11.8 | +25.3 | +20.7 | -3.17 | +2.86 | +11.7 | +10.1 | |
|
x
|
18.4 | 17.9 | 16.5 | 15.0 | ||||||
|
|
1.58 | 1.53 | 1.63 | 2.44 | ||||||
