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Top Trades for Mon, 13 Aug 2018 10:38 – SPWR

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Top Trades for Mon, 13 Aug 2018 10:38 – SPWR
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GNC/Japar – Long, slow turnaround for them (if it works).  I think $3 is a good price ($250M) with $2.5Bn in sales and $19.5M (0.44/share) made in the past two quarters.  There's really no logic to this price – it's just going to take the markets a long while to accept that. 

SPWR/StJ – The Trump Administration is still waging a stealth war against solar and other renewables, despite their falling out with the Kochs but I don't see how it affects the long-term trend towards solar on a global scale.  They may have a rough patch on trade issues but, in the long run – it's the future.  

I like the long-term play at this price though we already have them in our portfolios.  As a new trade I'd go for:

  • Sell 10 SPWR 2020 $7 puts for $2.25 ($2,250)
  • Buy 20 SPWR 2020 $5 calls for $2.65 ($5,300)
  • Sell 20 SPWR 2020 $10 calls for $1.15 ($2,300)

So that's net $650 on the $10,000 spread that stars off $4,000 in the money – not bad!  Upside potential is $9,350 (1,558%) if solar power manages to survive the Trump era.