WU/Jeddah – WU's strength is their global presence – they are like an emerging market play.
Western Union operates a payment network in 200 countries with 20,000 country pairs in a network that makes 25 transfers every single second.
WU options go out to 2023 and they are not likely to fail $20 so, the trade I'd make there it:
- Sell 10 WU 2023 $25 puts for $4.75 ($4,750)
- Buy 40 WU 2023 $22 calls for $3 ($12,000)
- Sell 40 WU 2023 $25 calls for $1.70 ($6,800)
That's net $450 on the $12,000 spread with $11,550 (2,566%) upside protection and we're a bit aggressive about owning 1,000 shares at $25.11 if things go wrong but then we Rawhide and turn it into a long-term trade if we have to.
NAK/Swamp – 0.50 is where we usually buy but we already have it at 0.50 so I would want to see 0.30 before I was motivated to DD (assuming it wasn't for a good reason). Otherwise, the plan is to sell 1/2 at $1 which then makes it free and THEN we can DD again at 0.50 to average 0.25.
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The case for investing in Northern Dynasty Minerals (NYSEAMERICAN:NAK) stock involves an ongoing court case, burgeoning commodity opportunities, and many other variables.
Source: ShutterstockThere will be no quick, overnight answer to whether NAK stock is an obvious investment or not, but I’m going to make the case that there is a lot of reason for optimism currently.
The case hinges upon the company receiving the right to follow through with its mining plans in southwest Alaska.
If that is successful, then the next hurdle is longer term hope that copper truly returns the projected opportunities it is projected to in the coming years and decades.
A Closer Look at NAK Stock
Investors want to understand Northern Dynasty Minerals’ ongoing case regarding its right to operate a mine in southwest Alaska.
After all, the project and profits which will flow therefrom won’t get off the ground without the legal right to operate.
On June 17 the company released news that the US Court of Appeals has determined that Northern Dynasty Minerals’ Pebble Project may now be judged on its merits.
Thus, the EPA is now closer to being able to make a determination as to whether it will permit the Pebble Project.
I won’t attempt to break down the case further than that. It is obviously complex in nature with many parties involved, who each have disparate and conflicting priorities.
The point here is that the case is moving forward within the court system and that gets Northern Dynasty Minerals a step closer to moving forward with mining.
The argument here hinges upon the economic merits of copper mining, and balancing those economic merits against potential environmental effects.
Further, the environmental impact of the project has been well-documented. Whether you’re a potential investor or an environmentalist, the findings look favorable.
Environmental Impact Study
A comprehensive environmental impact study on the proposed Pebble Project was initiated in 2017. It included eight federal and three state cooperating agencies, federally recognized tribes and other parties.
The study was published in July 2020. The findings were clear. No impact on subsistence fish and wildlife resources. No long-term impact to the Bristol Bay commercial fishery and no impact on water quality, jobs for people in the region.
Now that the case will be judged on its merits in a court of law, there is reason to believe Northern Dynasty Minerals will be able to move forward with its copper mining plans for the Pebble Project.
And there’s a massive opportunity there.
Copper and the Pebble Project
There is massive projected demand for copper. It is a strategically important resource which makes NAK stock very interesting.
There is also a dearth of copper production from within U.S. borders. That of course ties the narrative for the Pebble Project into national security and the U.S. economy at large.
Further, there is a bull market for copper right now with a projected supply deficit to occur for copper.
The Pebble Project is the second largest undeveloped copper reserve globally. If it moves forward and is developed there will be massive revenues as copper is used in many green energy projects.
If the Pebble Project isn’t developed the U.S. basically falls behind in copper production. That would put the U.S. in a politically and economically difficult situation given that China is leading production.
Without the Pebble Project, the U.S. may find that it is increasingly beholden to foreign powers for copper. With the project, the U.S. can decrease its reliance on copper imports by 8%, down to 27% of total supply.
Takeaway
I’m not one for jingoistic rhetoric though it may seem that I am, given what I wrote above. Nor am I a person who thinks economic arguments trump environmental concerns.
I simply don’t see that either of those are present here given the information presented. What I do see is that NAK stock has a path forward with its case going back to court. The economic and environmental cases are clear.
That’s why I think there’s a lot of potential for current investors at today’s super low prices.
