HBI/Stock – Hmm, I guess we'll have to pull the trigger on them since that may be a sign something is up.  

HBI was our 2nd choice for Stock of the Year because our first choice, LB, had already snapped higher by Thanksgiving, when we officially make our pick.  Both are out of favor at the moment and we already picked up LB but now we can add some HBI to our Portfolios as well:

Note our old LTP play from 2/3/17 had a rough ride:

Submitted on 2017/02/03 at 7:46 am

HBI/Rexx – If they go down 30% I will dump other stocks so I can load up the truck.  Goes back to what I try to teach you guys about the absolute value of a company.  This isn't some dot.com with a blown business model or a retailer with too many stores and too few customers, this is a brand clothing company in an age where it take hundreds of millions to build each brand and you get Maidenform, Bali, Playtex, Hanes, JMS/Just My Size, Lilyette, Wonderbra, Donna Karan, DKNY, Champion, Polo Ralph Lauren, L'eggs, Hanes Beefy-T, Gear for Sports, Duofold, DIM, Nur Die/Nur Der, Lovable, Shock Absorber, Abanderado, Zorba, Rinbros, Kendall, Sol y Oro, Fila, Bellinda, Edoo, and Track N Field AND $5Bn in sales AND $400M in profits for $8Bn.  If you don't understand the value in that – stick to TA!  

Submitted on 2017/02/03 at 12:54 pm

HBI/Pstas – $25 seems about right.  As to 44% of sales, so the 3 largest retailers sell 44% of something that pretty much every retailer (including AMZN) sells?  That's nothing to worry about.  If you don't get your Leggs from WMT it's because you're getting them at WBA or AMZN or whatever but you are still getting Leggs and HBI doesn't care WHERE you buy their stuff.  

Submitted on 2017/04/13 at 1:03 pm

Hanesbrands higher after guidance update

• Hanesbrands (NYSE:HBI) reaffirms 2017 guidance. The company also says that it expects to report Q1 revenue of $1.38B and EPS of $0.28 to $0.29 vs. $0.28 consensus.
• "We’re off to a strong start in 2017, and we are diligently focused on daily execution and performance," says CEO Gerald Evans.
• In the C-suite, a search for a new CFO is underway after Richard Moss announced he will retire from the post at the end of the year.
• Shares of Hanesbrands are up 6.58% to $22.50.

Submitted on 2017/05/02 at 5:00 pm

HBI/Learner – Bots see the words "lower guidance" and the 2.5% Rule kicks in.  Humans will fix it tomorrow. 

Submitted on 2017/05/03 at 12:31 pm

As noted to Jabob above, all we care about is that HBI stays over our net $17.77 and we're profitable.  In fact, because we only have 10 for a $2,230 credit and $1,800 in ordinary margin inside a $50,000 allocation block – we would MUCH prefer if they crashed to $15 or $10 or whatever and we could double down to a proper-sized position.  Unless that happens, we're merely amused by the up and down action between now and Jan, 2019.  Meanwhile, over $20 we make $2,230 – $7,230, which is 123%-401% back on our margin in 2 years.  

When you are BEING THE HOUSE, you don't sit and stare obsessively at every bet that is won and lost on each of your games – you look to expand your casino and have more players playing more games because you KNOW that the odds are very much in your favor and, while you may lose a few individual bets – over the long run, you are very likely to come out far ahead if you simply stick to the plan.

It's hard work being a Fundamentalist – all the waiting and arguing…  

So now they are back near the $18.25 bottom of last Feb and again I look at the $1.75 they are reliably making and the $19.50 current price of a share and I check it with $645M in cash-flow (earnings were impacted by one-time tax adjustment) against a $7Bn valuation and that seems like a winner to me.  

They pay a nice 3% dividend so we don't mind owning them, which means we can get aggressive with short puts – especially in the LTP, where we have tons of buying power.  

For the OOP, let's just take a poke with the following:

• Sell 5 HBI 2020 $18 puts for $2.50 ($1,250) 
• Buy 10 HBI 2020 $18 calls for $4.20 ($4,200) 
• Sell 10 HBI 2020 $23 calls for $2.10 ($2,100)

That's net $850 on the $5,000 spread so $4,150 (488%) upside potential at $23 and we only risk owning 500 shares which TOS says is just $606 of ordinary margin so it's a super-efficient trade too!  

In the LTP, we'll be more aggressive:

• Sell 15 HBI 2020 $20 puts for $3.70 ($5,550) 
• Buy 25 HBI 2020 $15 calls for $5.90 ($14,750) 
• Sell 25 HBI 2020 $23 calls for $2.10 ($5,250) 

Here we're spending net $3,950 on the $20,000 spread so the upside here is $16,050 (406%) but we're a bit deeper in the money and that will come in handy later, when we will sell 5-10 short calls in the front month (after we recover  a bit).  Even now, for example, selling 10 April $20 calls for 0.90 would put $900 in our pocket for selling just 36 of the 673 days we have to sell.  Just 10 sales like that puts $9,000 back in our pocket and would have us up over 100% leaving whatever we gain from the spread as just a bonus to that!