AAPL/Pstas – Well who's in a better position to grab eyeballs than AAPL with 1Bn devices already in people's hands? Just as silly not to at least try to lever that power.
RH/Soma – Weak guidance but still good numbers. Problem is they had a ridiculous run-up that took them too high so didn't take much to disappoint.
We used to play them in the $20s!
They'll make about $8-9/share and I'd pay 15x ($120) over the long-haul so interesting now at $107 but I'd let the downgrade police have at them first, might see $100 before they turn back. For the LTP, I'd keep an eye on the 2021 $100 puts, now $27 with an 0.30 delta so selling 5 of those for $30 should be our goal in the LTP to get paid $15,000 for not owning $50,000 worth of RH at net $70.
Hmm, that could be my first idea for Winston. Good, solid business, caters to Top 1%, only 83 stores (but everyone has herd of them so that's surprising) and good growth.
| Year End 03rd Feb | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | TTM | 2019E | 2020E | CAGR / Avg | |
| $m | 1,193 | 1,551 | 1,867 | 2,109 | 2,135 | 2,440 | 2,505 | 2,521 | 2,755 | +15.4% | |
| $m | -69.0 | 54.9 | 165.7 | 185.6 | 53.0 | 92.7 | 220.5 | ||||
| $m | -12.8 | 18.2 | 91.0 | 91.1 | 5.40 | 2.18 | 114.8 | 222.6 | 268.5 | ||
| $ | -0.40 | 0.45 | 2.20 | 2.16 | 0.13 | 0.31 | 4.46 | ||||
| $ | -0.70 | 0.45 | 2.31 | 2.43 | 0.31 | 1.12 | 5.11 | 8.42 | 10.1 | ||
| % | +413.9 | +5.0 | -87.2 | +261.1 | +356.7 | +651.7 | +20.1 | ||||
| x | 117.8 | 25.8 | 15.7 | 13.1 | |||||||
| x | 0.18 | 0.040 | 0.78 | 1.21 | |||||||
| Profitability | |||||||||||
$106 is $2.2Bn but they won't hit $220M this year, probably $180-200M.
So let's say we fill the 5 short puts at $30 ($15,000). Margin is around $7,000 so very efficient. We could then buy 15 of the 2021 $85 ($40)/120 ($27) bull call spreads for $13 ($19,500) and that's net $4,500 on the $37,500 spread so the upside here is $33,000 (733%) at $120.
