Talking Stocks 2.0

[huncho]

Originally Posted by logo

Also, SABR loading zone in my opinion. That $1 price downgrade has now translated to a price drop of $1.50 in 3 days.

it's also likely falling due to news of the delta variant and coty is probably following. certain countries are starting to reinstate mask mandates and restrictions

[7sins]

Originally Posted by huncho

it's also likely falling due to news of the delta variant and coty is probably following. certain countries are starting to reinstate mask mandates and restrictions

That is the case today for most reopening stocks, with the fear of the delta variant, not exclusive to SABR/COTY. Hopefully we can get more vaccines distributed quicker around the world. SABR price target was lowered last week by 5% from Morgan Stanley (sometimes this happens to allow institutions to buy cheaper shares) last week even though SABR raised guidance by 20% and that caused volatility.

Domestic travel is booming and prices are going through the roof, a buddy told me he paid $800 to fly to Chicago from LA in economy. Those expensive prices should help as we wait for business travel to return. There was an interesting article last week saying 1/3 of firms expect business travel to return to normal this year and 80% to return by next year. 2023 leaps are the play here, add along the dip, we haven't seen these prices since the pullback in March.

SOFI IV is sky-high, making leaps very expensive. I've sold a bit of my warrants last week and keeping a close eye. My understanding is that you have a lockup here shortly and then another one in mid July. Shares might not be a bad play, then write OTM covered calls to collect those high premiums. Maybe roll those premiums into 22/23 options. 20m shares traded in first hour today so clearly investors taking gains, 5x daily volume and price is showing strong support at $18 which is what we saw when it was IPOE around $15.

Will look to add across all three this week as I suspect short term vol isn't dissipating anytime soo, fingers crossed we keep the delta variant contained, otherwise we are going significantly lower.

[huncho]

Originally Posted by 7sins

That is the case today for most reopening stocks, with the fear of the delta variant, not exclusive to SABR/COTY. Hopefully we can get more vaccines distributed quicker around the world. SABR price target was lowered last week by 5% from Morgan Stanley (sometimes this happens to allow institutions to buy cheaper shares) last week even though SABR raised guidance by 20% and that caused volatility.

Domestic travel is booming and prices are going through the roof, a buddy told me he paid $800 to fly to Chicago from LA in economy. Those expensive prices should help as we wait for business travel to return. There was an interesting article last week saying 1/3 of firms expect business travel to return to normal this year and 80% to return by next year. 2023 leaps are the play here.

SOFI IV is sky-high, making leaps very expensive. I've sold a bit of my warrants last week and keeping a close eye. My understanding is that you have a lockup here shortly and then another one in mid July. Shares might not be a bad play, then write OTM covered calls to collect those high premiums. Maybe roll those premiums into 22/23 options. 20m shares traded in first hour today, 5x daily volume and price is showing strong support at $18 which is what we saw when it was IPOE around $15. Investors taking gains here last two days.

Will look to add across all three this week as I suspect short term vol isn't dissipating anytime soon.

yeah all travel stocks across the board. not surprised at what you mentioned though seeing as it's summer and especially with the upcoming july 4 weekend and restrictions being lifted it's just put everything in the right place for airlines. that sector should definitely have a good summer

side note - it is nice to finally see some movement in viacom, has just been super undervalued ever since the whole margin call fiasco

[7sins]

Originally Posted by huncho

yeah all travel stocks across the board. not surprised at what you mentioned though seeing as it's summer and especially with the upcoming july 4 weekend and restrictions being lifted it's just put everything in the right place for airlines. that sector should definitely have a good summer

side note - it is nice to finally see some movement in viacom, has just been super undervalued ever since the whole margin call fiasco

Right! VIAC went sideways for weeks. Are you still in? I bought a bit of 2023 $50C when it was under $40 but unfortunately a small position. I haven't been following closely, was this from the buyout rumors last week?

[huncho]

Originally Posted by 7sins

Right! VIAC went sideways for weeks. Are you still in? I bought a bit of 2023 $50C when it was under $40 but unfortunately a small position. I haven't been following closely, was this from the buyout rumors last week?

yeah still in, i have jan 2022 40c and jan 2023 50c and have been adding for the past few months. the only link i can see is from the rumors of comcast but also i thought comcast was more eyeing roku so i don't know how real those rumors even are

[chsu74]

Originally Posted by chsu74

I doubled down premarket and watched the sh!t show all day. Don’t care and will sleep well tonight. They did the same to Target after 4th qtr earnings. It took two weeks before the stock ran.

Lesson here is buying/owning short term options = very risky. I will continue to sell puts and get paid while collecting dividends.

Originally Posted by huncho

averaged into viac over the day but amazingly it just kept going down

sq with a pretty big earnings beat but looks like it has already flattened out after hours...

Patience is paying off on VIAC averaging down and selling OTM puts. Easy undervalued play in an overvalued market. Still cheap at 11 P/E compared to industry avg of 20

[chsu74]

Originally Posted by 7sins

Right! VIAC went sideways for weeks. Are you still in? I bought a bit of 2023 $50C when it was under $40 but unfortunately a small position. I haven't been following closely, was this from the buyout rumors last week?

Yea.. A 3 way rumor of Comcast, ROKU and VIAC interested in partnership of some kind last Wed in WSJ. Reality is that it will be difficult for Comcast(NBC) merging with VIAC(CBS). People dismissing ROKU as a suitor because of their agnostic platform but its a “content is king” reality in that industry.

Saw this on my ROKU last night. Maybe a bidding war to take place. Shari Redstone controls 70% of the VIAC voting stock so it will be up to her if a sale takes place. Read a good opinion on that Apple should have offered $125 for VIAC when it split. Think Shari would have sold at that price.

Sun Valley retreat is supposedly taking place after July 4 weekend. That is where deals typically happen.

https://www.hollywoodreporter.com/bu...rn-1234961525/

[gabrielnovar]

coin/galaxy digital MSTR buy anything crypto but it has a good shot of 5-10xing based on history

[huncho]

Originally Posted by chsu74

Yea.. A 3 way rumor of Comcast, ROKU and VIAC interested in partnership of some kind last Wed in WSJ. Reality is that it will be difficult for Comcast(NBC) merging with VIAC(CBS). People dismissing ROKU as a suitor because of their agnostic platform but its a “content is king” reality in that industry.

Saw this on my ROKU last night. Maybe a bidding war to take place. Shari Redstone controls 70% of the VIAC voting stock so it will be up to her if a sale takes place. Read a good opinion on that Apple should have offered $125 for VIAC when it split. Think Shari would have sold at that price.

Sun Valley retreat is supposedly taking place after July 4 weekend. That is where deals typically happen.

https://www.hollywoodreporter.com/bu...rn-1234961525/

viacom makes the most sense for someone like netflix/hulu/apple to acquire to compete with amazon's recent mgm acquisition. they have an insanely large content library so it surprises me that comcast is in the rumors. on the other hand, i have no idea how the logistics of that kind of deal would work or if it would even be possible because mgm is a studio whereas viacom is much more

[chsu74]

Originally Posted by huncho

viacom makes the most sense for someone like netflix/hulu/apple to acquire to compete with amazon's recent mgm acquisition. they have an insanely large content library so it surprises me that comcast is in the rumors. on the other hand, i have no idea how the logistics of that kind of deal would work or if it would even be possible because mgm is a studio whereas viacom is much more

Antitrust issues will challenge a FAANG buyout at the moment IMHO. Viacom is the prettiest girl at the bar in that space but shari also knows that. I see this playing out like this:

1. VIAC needs to continue show their ability to add subscribers. They still have a few more years before facing NFLX’s subscriber churn and retention issues. They also need to show their ad revenue from Pluto can replace their legacy income.

2. Someone needs to buy a media content producer with a huge library and is willing to pay Shari’s asking price.

I am OK with either. Here is a good breakdown on the whole media industry from Bloomberg Intelligence.

https://www.reddit.com/r/VIAC/commen...tm_name=iossmf

[904VT]

Originally Posted by huncho

viacom makes the most sense for someone like netflix/hulu/apple to acquire to compete with amazon's recent mgm acquisition. they have an insanely large content library so it surprises me that comcast is in the rumors. on the other hand, i have no idea how the logistics of that kind of deal would work or if it would even be possible because mgm is a studio whereas viacom is much more

Would be interesting for Comcast to perhaps acquire here and then license content to Hulu since a joint venture between them and Disney. They could then make CBS Viacom content exclusive to Hulu for streaming similar to how Disney did with ABC/ESPN. I wonder if it would get approved though.

[huncho]

Originally Posted by chsu74

Antitrust issues will challenge a FAANG buyout at the moment IMHO. Viacom is the prettiest girl at the bar in that space but shari also knows that. I see this playing out like this:

1. VIAC needs to continue show their ability to add subscribers. They still have a few more years before facing NFLX’s subscriber churn and retention issues. They also need to show their ad revenue from Pluto can replace their legacy income.

2. Someone needs to buy a media content producer with a huge library and is willing to pay Shari’s asking price.

I am OK with either. Here is a good breakdown on the whole media industry from Bloomberg Intelligence.

https://www.reddit.com/r/VIAC/commen...tm_name=iossmf

yep, both of your points make sense. i work in the media industry (company is on that breakdown actually) and i personally have no idea how people are ok with paying for like 5 streaming services at once lol, and how all these companies think they can easily break through. you might as well just go back to linear tv at some point. the only thing that will keep them separately operating in the future i think are the sports incentives. i would be surprised if most subscribers are buying for original content, especially considering netflix is king there and especially now when studios have been closed down and new content isn't coming out like it used to

[logo]

Originally Posted by 7sins

That is the case today for most reopening stocks, with the fear of the delta variant, not exclusive to SABR/COTY. Hopefully we can get more vaccines distributed quicker around the world. SABR price target was lowered last week by 5% from Morgan Stanley (sometimes this happens to allow institutions to buy cheaper shares) last week even though SABR raised guidance by 20% and that caused volatility.

Domestic travel is booming and prices are going through the roof, a buddy told me he paid $800 to fly to Chicago from LA in economy. Those expensive prices should help as we wait for business travel to return. There was an interesting article last week saying 1/3 of firms expect business travel to return to normal this year and 80% to return by next year. 2023 leaps are the play here, add along the dip, we haven't seen these prices since the pullback in March.

SOFI IV is sky-high, making leaps very expensive. I've sold a bit of my warrants last week and keeping a close eye. My understanding is that you have a lockup here shortly and then another one in mid July. Shares might not be a bad play, then write OTM covered calls to collect those high premiums. Maybe roll those premiums into 22/23 options. 20m shares traded in first hour today so clearly investors taking gains, 5x daily volume and price is showing strong support at $18 which is what we saw when it was IPOE around $15.

Will look to add across all three this week as I suspect short term vol isn't dissipating anytime soo, fingers crossed we keep the delta variant contained, otherwise we are going significantly lower.

Added to SABR calls (overall down only a few % on this position as I did trim some in the 14/15 range). Also opened a starter 1/3 position in SOFI in the high 17s. Will look to add to both over the next few days as well. Held on to some of my tech positions like NET and AAPL - will be following those closely, but I am hoping for/thinking there is still another month or so of upside here before I trim.

The delta variant stuff I think is a bit overdone currently. We know there will always be new variants popping up, some which are bad, some which make the virus much more insignificant. Likely covid vaccines will become a more regular thing like flu shots as we get topped up on whatever the flavor of the year is. These pocket outbreaks are also likely to be much smaller in scale than we were seeing last year, and mostly among younger individuals with an overall lower risk profile. Of course, hopefully vaccination numbers continue improve globally, but overall I do still think the reopening trend is our friend and that it is very unlikely we revert into full blown lockdowns ever again due to covid. Maybe some bumps along the way like today, and will add to those positions until we get more clear data that the situation has changed drastically.

[7sins]

Originally Posted by logo

Added to SABR calls (overall down only a few % on this position as I did trim some in the 14/15 range). Also opened a starter 1/3 position in SOFI in the high 17s. Will look to add to both over the next few days as well. Held on to some of my tech positions like NET and AAPL - will be following those closely, but I am hoping for/thinking there is still another month or so of upside here before I trim.

The delta variant stuff I think is a bit overdone currently. We know there will always be new variants popping up, some which are bad, some which make the virus much more insignificant. Likely covid vaccines will become a more regular thing like flu shots as we get topped up on whatever the flavor of the year is. These pocket outbreaks are also likely to be much smaller in scale than we were seeing last year, and mostly among younger individuals with an overall lower risk profile. Of course, hopefully vaccination numbers continue improve globally, but overall I do still think the reopening trend is our friend and that it is very unlikely we revert into full blown lockdowns ever again due to covid. Maybe some bumps along the way like today, and will add to those positions until we get more clear data that the situation has changed drastically.

Exactly, just as we are seeing travel surge, https://www.usatoday.com/story/news/...on/5366829001/

TSA reports highest numbers of travelers since March 2020.

Then the other side you have Australia going back to lockdowns due to Delta variant. https://www.nydailynews.com/news/wor...boi-story.html

If we see these lockdowns remerge this could cause some severe downside here shortly, albeit more opportunities to add. Looks like many countries are unfortunately behind on their vaccination goals. Also I am not sure many of these countries can afford to go back to lockdowns, especially those heavily reliant upon tourism. We are heading to greece in August, many of the popular hotels are already completely sold out at prices 2-3x higher than precovid prices.

Which SABR calls did you buy? I just DCA'd into 2023 $12C, was able to get them at $3.30. That to me is WILD. 18 months for a breakeven to be only $15, when it hit almost $17 earlier this march before the travel boom has even begun. Putting their debt aside and as long as we don't see these shutdowns pick back up, I will plan to add every single day it stays below $12.50. Lets see if the $15C drops below $2.

Originally Posted by chsu74

Yea.. A 3 way rumor of Comcast, ROKU and VIAC interested in partnership of some kind last Wed in WSJ. Reality is that it will be difficult for Comcast(NBC) merging with VIAC(CBS). People dismissing ROKU as a suitor because of their agnostic platform but its a “content is king” reality in that industry.

Saw this on my ROKU last night. Maybe a bidding war to take place. Shari Redstone controls 70% of the VIAC voting stock so it will be up to her if a sale takes place. Read a good opinion on that Apple should have offered $125 for VIAC when it split. Think Shari would have sold at that price.

Sun Valley retreat is supposedly taking place after July 4 weekend. That is where deals typically happen.

https://www.hollywoodreporter.com/bu...rn-1234961525/

Great points, thank you for sharing. Will be interesting to see if Shari will sell, the only concern I see is their significant debt on the balance sheet. The share offering they strategically did earlier this year I believe went to pay down some of that debt. Lots of upside with Paramount+. What options are you buying?

[huncho]

was only a matter of time until they got in lol, 6 threads on the main page just from this morning

[chsu74]

Originally Posted by 7sins

Great points, thank you for sharing. Will be interesting to see if Shari will sell, the only concern I see is their significant debt on the balance sheet. The share offering they strategically did earlier this year I believe went to pay down some of that debt. Lots of upside with Paramount+. What options are you buying?

I believe the $85 offering raised over $2B. VIAC also just concluded the sale of Simon & Schuster for another $2B+. Much of those proceeds being invested into subscriber growth and content production.

Believe their long term debt is not due for a few years. IIRC from their last qtr conference call transcript.

The two valuation comparison I like most are:

1. Multiply the TTM FCF by 15 and you get $49.95B. $49.95B/622M shares = $80 share price. $80 share/$4.55 EPS = 17.58 PE

2. VIAC’s stream business is 10% of their revenue. You apply NFLX’s market valuation multiple to get $26B which was VIAC total market cap when stock was trading around $40.

I also saved this other comparison attached when Discovery/Warner Bros(New Co) merger announced from few months back.

I am a conservative investor with only longs and selling OTM puts on this. Bought back 20 contracts of July 2 $42.5 puts sold last week earlier today so I can add more shares to my current 21K longs. I don’t YOLO but this is an exception at one qtr of my total holdings.

Suggest Jan 2022 $60 or $65s with your trading style?

[logo]

Originally Posted by 7sins

Exactly, just as we are seeing travel surge, https://www.usatoday.com/story/news/...on/5366829001/

TSA reports highest numbers of travelers since March 2020.

Then the other side you have Australia going back to lockdowns due to Delta variant. https://www.nydailynews.com/news/wor...boi-story.html

If we see these lockdowns remerge this could cause some severe downside here shortly, albeit more opportunities to add. Looks like many countries are unfortunately behind on their vaccination goals. Also I am not sure many of these countries can afford to go back to lockdowns, especially those heavily reliant upon tourism. We are heading to greece in August, many of the popular hotels are already completely sold out at prices 2-3x higher than precovid prices.

Which SABR calls did you buy? I just DCA'd into 2023 $12C, was able to get them at $3.30. That to me is WILD. 18 months for a breakeven to be only $15, when it hit almost $17 earlier this march before the travel boom has even begun. Putting their debt aside and as long as we don't see these shutdowns pick back up, I will plan to add every single day it stays below $12.50. Lets see if the $15C drops below $2.



Great points, thank you for sharing. Will be interesting to see if Shari will sell, the only concern I see is their significant debt on the balance sheet. The share offering they strategically did earlier this year I believe went to pay down some of that debt. Lots of upside with Paramount+. What options are you buying?

Very nice. I had 12 and 15 2023 calls, sold the 12s when we got up to the 15 range and converted a bunch of that to 17c. So I’ve been adding 15c and 17c, but will look to the $12 calls as well if we continue to drop.

[logo]

Originally Posted by huncho

was only a matter of time until they got in lol, 6 threads on the main page just from this morning

lol was wondering why my purchase from this morning is already up. Can’t complain, just wish it wasn’t a 1/3 position haha

[huncho]

Originally Posted by logo

lol was wondering why my purchase from this morning is already up. Can’t complain, just wish it wasn’t a 1/3 position haha

yeah was gonna say you did good with your entry. i didn't add anything yet since IV is so high and i'd rather not buy shares for now (would have to exit other positions to buy shares)

i'm sure there will be another opportunity in the near future though

[logo]

@7sins, wondering if you might be able to offer suggestions for a VIX hedge strategy. I was looking at calls for 6 months out, slightly otm, and it seems if you roll them over to a the next month’s expiration after 4 weeks your downside is about 6-8% assuming the VIX stays flat. Of course less loss or small gain if it creeps upwards, slightly more loss of it creeps downward. So, you are always buying 6 month calls, rolling them monthly. Typical VIX spike, when they happen, seem to yield a return of ~35-50% on these calls when they occur within the first month of the contract. So, I calculate that if the VIX stays flat for 6 months then spikes just once at the end of the 6 months, you will basically break even with this strategy. If it spikes sooner than 6 months or spikes more than once in 6 months, you make money. If it spikes just once but the overall baseline trend is declining, you will be roughly even vs take a small loss over 6 months. Any thoughts on this?

[7sins]

Originally Posted by chsu74

I believe the $85 offering raised over $2B. VIAC also just concluded the sale of Simon & Schuster for another $2B+. Much of those proceeds being invested into subscriber growth and content production.

Believe their long term debt is not due for a few years. IIRC from their last qtr conference call transcript.

The two valuation comparison I like most are:

1. Multiply the TTM FCF by 15 and you get $49.95B. $49.95B/622M shares = $80 share price. $80 share/$4.55 EPS = 17.58 PE

2. VIAC’s stream business is 10% of their revenue. You apply NFLX’s market valuation multiple to get $26B which was VIAC total market cap when stock was trading around $40.

I also saved this other comparison attached when Discovery/Warner Bros(New Co) merger announced from few months back.

I am a conservative investor with only longs and selling OTM puts on this. Bought back 20 contracts of July 2 $42.5 puts sold last week earlier today so I can add more shares to my current 21K longs. I don’t YOLO but this is an exception at one qtr of my total holdings.

Suggest Jan 2022 $60 or $65s with your trading style?

Very interesting, thank you for sharing, incredible how undervalued VIAC is. Would have been interesting to look at cash, p/s and ev/ebitda.

For me personally, I always look to buy options at least one year out with LEAPS. As too many times a theory worked but not with trying to time the market, which is nearly impossible. Additionally, discerning short term vs long term conviction. With VIAC at $45 and buying Jan 2022 $65, you need a 50% move to breakeven within 6 months. In this market, certainly anything is possible but that's a bit out of my risk tolerance. That JAN 2022 $60c is only $2 and $5 for a jan 2023 which gives you a much longer runway should the trade go sideways.

If you are thinking about shorter dated options I would suggest more ITM than OTM. Alternatively you can stagger 2022 and 2023 with different strikes to spread out your risk. A buyout or merger of this size would take time to complete over the next year or two. Me personally, I own the $50C 2023 and would add if it dips back below $40 again.

Originally Posted by logo

@7sins, wondering if you might be able to offer suggestions for a VIX hedge strategy. I was looking at calls for 6 months out, slightly otm, and it seems if you roll them over to a the next month’s expiration after 4 weeks your downside is about 6-8% assuming the VIX stays flat. Of course less loss or small gain if it creeps upwards, slightly more loss of it creeps downward. So, you are always buying 6 month calls, rolling them monthly. Typical VIX spike, when they happen, seem to yield a return of ~35-50% on these calls when they occur within the first month of the contract. So, I calculate that if the VIX stays flat for 6 months then spikes just once at the end of the 6 months, you will basically break even with this strategy. If it spikes sooner than 6 months or spikes more than once in 6 months, you make money. If it spikes just once but the overall baseline trend is declining, you will be roughly even vs take a small loss over 6 months. Any thoughts on this?

The challenge with 6 month VIX calls is the premium can be very expensive, especially if IV stays elevated. Typically I look for VIX to sustain below $16 or even lower pre-covid for several weeks, especially if markets look stable near highs. This typically brings in IV and the premium for VIX calls. IE jan 2022 vix $20C is $5.70 which is pricey with IV at 150%. Even Sept $20C are $3.90 with IV at 170%. For my own strategy, when I purchase and or roll these VIX calls to hedge against uncertain vol in the market, I typically wait for the IV to come back when investors feel the most comfortable. Then you can often buy VIX calls at more attractive levels. I look for 3 - 6 months and then roll them depending on the market. Typically I will use the proceeds from writing calls to buy these calls, so it essentially is free insurance on my portfolio. Then when an unexpected event happens, we see a spike back to the 20s quickly, I roll out of the VIX calls into more attractively priced equities. I've tried doing this with VIX puts when VIX was elevated but found premiums too expensive and not much of an opportunity.

It isn't a trade to always have on but certainly can act as a way to hedge portfolio vol and dampen volatility.

[chsu74]

Originally Posted by 7sins

Very interesting, thank you for sharing, incredible how undervalued VIAC is. Would have been interesting to look at cash, p/s and ev/ebitda.

For me personally, I always look to buy options at least one year out with LEAPS. As too many times a theory worked but not with trying to time the market, which is nearly impossible. Additionally, discerning short term vs long term conviction. With VIAC at $45 and buying Jan 2022 $65, you need a 50% move to breakeven within 6 months. In this market, certainly anything is possible but that's a bit out of my risk tolerance. That JAN 2022 $60c is only $2 and $5 for a jan 2023 which gives you a much longer runway should the trade go sideways.

If you are thinking about shorter dated options I would suggest more ITM than OTM. Alternatively you can stagger 2022 and 2023 with different strikes to spread out your risk. A buyout or merger of this size would take time to complete over the next year or two. Me personally, I own the $50C 2023 and would add if it dips back below $40 again.

Agree with at least one year out horizon with this one. Learning from your strategy on leaps as it makes a lot of sense but am too old schooled. SA has decent info at your finger tips FYI..

[huncho]

Originally Posted by chsu74

Agree with at least one year out horizon with this one. Learning from your strategy on leaps as it makes a lot of sense but am too old schooled. SA has decent info at your finger tips FYI..

seems to be getting pushed down for whatever reason again but i'm pretty confident that this is a great play and should pay off in a year or 2, and obviously better than buying all these other stocks that are at all time highs. even if they don't get bought by anyone i think their subscription growth should be enough. soccer + nfl should get them a good amount of subs. i think this one will just require a lot of patience in both cases because no one knows when a new rumor could possibly come out

[chsu74]

Originally Posted by huncho

seems to be getting pushed down for whatever reason again but i'm pretty confident that this is a great play and should pay off in a year or 2, and obviously better than buying all these other stocks that are at all time highs. even if they don't get bought by anyone i think their subscription growth should be enough. soccer + nfl should get them a good amount of subs. i think this one will just require a lot of patience in both cases because no one knows when a new rumor could possibly come out

Agreed. Held 200 day support which is great to see this morning. I am willing to be patient with this.

Should have waited to sell those $42.5 puts until this morning but good enough to pick up an extra $2K end of next week. Dividend at 2% is solid and will continue to collect those put premiums when price retraces.

[logo]

Originally Posted by 7sins

The challenge with 6 month VIX calls is the premium can be very expensive, especially if IV stays elevated. Typically I look for VIX to sustain below $16 or even lower pre-covid for several weeks, especially if markets look stable near highs. This typically brings in IV and the premium for VIX calls. IE jan 2022 vix $20C is $5.70 which is pricey with IV at 150%. Even Sept $20C are $3.90 with IV at 170%. For my own strategy, when I purchase and or roll these VIX calls to hedge against uncertain vol in the market, I typically wait for the IV to come back when investors feel the most comfortable. Then you can often buy VIX calls at more attractive levels. I look for 3 - 6 months and then roll them depending on the market. Typically I will use the proceeds from writing calls to buy these calls, so it essentially is free insurance on my portfolio. Then when an unexpected event happens, we see a spike back to the 20s quickly, I roll out of the VIX calls into more attractively priced equities. I've tried doing this with VIX puts when VIX was elevated but found premiums too expensive and not much of an opportunity.

It isn't a trade to always have on but certainly can act as a way to hedge portfolio vol and dampen volatility.

As always, thanks very much for your suggestions. Seems like a wise idea to watch and wait carefully for a good opportunity rather than buy and DCA in these given the IV. Also, thanks for highlighting the SABR 2023 $12c - I hadn't been following those since I had sold, but they are far more attractive than the $17 at current pricing with much less risk. So I rolled the 17c and some 15c into the 12s. Overall now my position is about 70% 12c, and 30% in 15c.

[7sins]

Originally Posted by logo

As always, thanks very much for your suggestions. Seems like a wise idea to watch and wait carefully for a good opportunity rather than buy and DCA in these given the IV. Also, thanks for highlighting the SABR 2023 $12c - I hadn't been following those since I had sold, but they are far more attractive than the $17 at current pricing with much less risk. So I rolled the 17c and some 15c into the 12s. Overall now my position is about 70% 12c, and 30% in 15c.

You are very welcome, nice bounce and support today, breakevens on the SABR 12s to me seem the most attractive today - good volume too. Hopefully you still have the COTY calls after buying the dip last ER, been a nice week there.

Originally Posted by chsu74

Agree with at least one year out horizon with this one. Learning from your strategy on leaps as it makes a lot of sense but am too old schooled. SA has decent info at your finger tips FYI..

SA is Seeking Alpha right? That is a clean interface. I've been using finviz below but can't wait to be back in the office and access the bloomberg terminal.



Great day today for COTY, positive 5%, taking the recent news of Richard Jones departure well. Sue continuing to clean management and build a better team going forward in order to best serve Coty’s great ambitions in its strategic categories. Interestingly they are going to separate his position into two, appointing an expert leader over each of Supply Chain and R&D. Which one would think will further strengthen the brand as they continue to turn the ship. Nice to see $9 holding strong today on very good volume.


For those looking for further education and learning fundamental analysis, checkout https://stocksandcoffee.com/value-in...g-cheat-sheet/. This is a great resource as you think about the importance of different metrics and ratios. Below I copied the ones I think are most important and can help novice investors better understand valuations. This really speaks to the importance of being able to read a balance sheet to help you make better informed decisions, doesn't mean overvalued companies can't become more overvalued but having a basic understanding of the below can help compare companies in similar industries.

Value Investing Metrics and Ratios


EV/EBITDA Ratio
Enterprise Value (EV) is similar to a company’s market capitalization but includes the company’s debt and cash supply. It is calculated by adding the long and short-term debt to the market cap and deducting its cash and cash equivalents.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a handy way to determine a company’s general financial standing and profitability.

Dividing the enterprise value by the company’s EBITDA paints a strong picture of the overall valuation. An EV/EBITDA under 10 is healthy and often a sign that the company is undervalued.

Price-to-Book Ratio P/B
The price-to-book ratio takes the company’s book value and divides it by the current market price per share of stock. Book value is simply the company’s total assets minus its total liabilities.

A P/B ratio under 1 is considered undervalued because the share price is lower than the value of the company’s tangible assets.

Price-to-Earnings Ratio P/E
The price-to-earnings ratio is calculated by taking the company’s share price and dividing it by the earnings per share. For example, if you are buying a company with a P/E ratio of 15, you are paying $15 for every dollar of the company’s earnings.

Price-to-Free Cash Flow P/FCF
Price-to-free cash flow takes a company’s per-share market price and compares it to its free cash flow. It’s calculated by taking the market capitalization and dividing it by the free cash flow of the business.

Free cash flow is all the cash available that can be used to pay dividends, repurchase shares, pay creditors, and more. FCF is net income adjusted by non-cash expenses and changes in working capital.

The lower the P/FCF, the more undervalued the company. Generally, a P/FCF of under 5 is considered good because the price is less than 5 times the free cash flow per share.

Debt Analysis

Quick Ratio
The quick ratio, also known as the acid-test, measures the company’s ability to pay its most current liabilities without having to sell assets or acquire additional financing. The quick ratio is a strict way of determining liquidity because it only figures in the company’s cash and most liquid assets.

A ratio above 1 means the company should have no issue paying its current liabilities. The higher the number, the better. Below 1 can indicate the company is in financial distress and may have a hard time staying solvent without additional asset sales or financing.

Current Ratio
The current ratio is a less harsh determination of liquidity than the quick ratio. It includes assets that can be turned into cash within a year or less, along with cash and cash equivalents. A ratio above 1 is average and means there is no issue for a company to meet its current debt obligations.

Debt-to-Equity Ratio D/E
The debt-to-equity ratio determines if a company is financing its operations using debt or with its own funds. It is calculated by taking a company’s total liabilities and dividing them by the total shareholders’ equity.

Shareholder equity, also known as book value, is what’s left for investors after subtracting the company’s total liabilities from its total assets.


Interest Coverage Ratio
The interest coverage ratio measures the company’s ability to pay the interest on its outstanding debt. It’s also known as the times interest earned ratio (TIE). To calculate the TIE, you take the company’s earnings before interest and taxes (EBIT) and divide it by its interest expense.


Growth Analysis

Price-to-Earnings-to-Growth PEG Ratio
The price/earnings to growth ratio takes the company’s P/E ratio and divides it by the expected growth rate of its earnings.

Like the P/E ratio, the PEG ratio determines the value of a stock but accounts for future earnings growth. A low PEG ratio tells you a company is potentially undervalued and has a higher growth rate.


EPS Growth
We have gone over earnings-per-share and how a positive EPS is ideal. A negative EPS indicates the company is losing money, and you will need to research why and how long that may continue.

EPS growth should be consistent and in an uptrend. If it isn’t, the company could have declining sales that may further decrease the share price.

Negative or decreasing EPS does not mean the stock is a lousy value play. Companies can go through hardships and come out much stronger and reward patient investors.

Increasing Return on Equity ROE
Return on equity calculates the company’s net income by its shareholders’ equity or book value. It tells investors how well the profitability of the business is performing compared to its book value.

Increasing Return on Assets ROA
Return on assets calculates the company’s net income by its total assets. This shows you how well the company is generating profit in relation to its assets.

High ROA is anything above 20%, while 5% is considered good/average. If the business has a high ROA, it is proficient at converting its investments into profits.

Economic Moat or Competitive Advantage
Investing in companies that have a strong advantage over its competitors reduces risk and increases returns. The economic moat should, at the very least, exist. The wider the moat or the more robust the

[chsu74]

Originally Posted by 7sins

SA is Seeking Alpha right? That is a clean interface. I've been using finviz below but can't wait to be back in the office and access the bloomberg terminal.

Correct. Seeking Alpha. I bounce between CNBC, Yahoo Finance and SA for info while on my phone using apps. Welcome other suggestions if any.

Finviz remains the source of complete info for free that I am aware of. Very jelly that you have access to Bloomberg terminal. Its a must have trading bonds.

[7sins]

First day since COVID that 2021 TSA travel numbers EXCEED 2019 throughput. Good sign showing a return to normalcy and travel demand beginning to exceed 2019. Can check daily TSA travel numbers here: https://www.tsa.gov/coronavirus/passenger-throughput

More good news, US economy added 850k jobs in June, positive from last month at 538k and the BEST month since the very early stages of the recovery last year. What I thought was interesting is that over 6.8M workers not looking for work but want a job, compared to sub 4.5M precovid. Total employment in the US is now 146M, it was 152M pre-covid so we are close back to normal levels.

More so, today's data will increase the FEDs confidence in the labor market recovery which will pave the way for active discussion on tapering the months to come. As those talks lead to actual tapering, I would expect to see interest rates move higher than the 1.50 10yr treasury today, similar to the taper tantrum in 2013 - hopefully not to the same extent, as the velocity of movements were sharp and quick. The FED is buying $120 BILLION of bonds each month, I suspect they will taper their MBS purchases first as well as treasuries. Anyways, this would/should strip out some demand in these markets, expect a 2% 10yr near year end as this takes place, boding well for the TBT trade from a few weeks back now sub $19. Will look to start building a position, hard to fathom going any lower than 1.50%, easy interest rate/inflation hedge and hedge against those stocks that are interest rate sensitive.

[logo]

Originally Posted by logo

Curious if anyone has any thoughts on ASPL. This is a SPAC merging with Wheels Up (new ticker to be “UP”) a large private aviation company aiming to be the Uber/AirBnB of private jets. Merger expected to complete by end of Q2 2021, so probably next few weeks. From what I’m seeing, they have solid revenue (~900M estimate for this year) and good membership growth, with a projected 2025 revenue over $2 billion. At $10/share currently (warrants $1.40) and having a look at the SEC filings, I’m calculating their current valuation to be about $2B. They just announced earnings last week, here are the highlights:

First Quarter 2021 Highlights

Revenue increased 68% year-over-year to $261.7 million
Active Members grew 56% year-over-year to 9,896
Adjusted EBITDA improved by $8.4 million year-over-year to ($8.7) million
Net loss improved by $12.3 million year-over-year to ($32.2) million


And here is the investor presentation from a few weeks ago:
https://d1io3yog0oux5.cloudfront.net...esentation.pdf

They have brand ambassadors by the names of Tom Brady, JJ Watt, A-Rod, Serena Williams etc., and Delta airlines owns a big stake. In a post-COVID world, I can totally see an increase in private aviation usage among those who can afford it, as it’s now not just a luxury to fly private, but also a safety feature by avoiding crowded airports and crowded planes.

ASPL has hardly moved and with super low volume. Seems to be an interesting opportunity, but curious on other opinions.

Warrants now up over 40% to $2.00 since posting, though share price hasn’t budged. I believe the exercise price for warrants is $11.50, so there’s now a 35% discrepancy between shares and warrants ($10 vs 13.50). Merger meeting vote announced for July 12, where the ticker will change to “UP.” Only 100-200k volume per day on average right now for shares with daily changes of $0.01 so it’s likely just algorithms, but I do think this will catch a bid at some point soon. At minimum, with a ticker like “UP” I imagine wsb will run it “up” at some point lol. Wheels up also just announced a partnership with American Express as part of perks added with certain Amex cards.

https://www.forbes.com/sites/douggol...e-jet-partner/

ASPL ceo is also Ravi Thakran, who was the chairman of LVMH Asia, and has nice history of investment in luxury-oriented lifestyle, health and beauty companies.

In any case, just another thought to consider.

[logo]

Originally Posted by 7sins

First day since COVID that 2021 TSA travel numbers EXCEED 2019 throughput. Good sign showing a return to normalcy and travel demand beginning to exceed 2019. Can check daily TSA travel numbers here: https://www.tsa.gov/coronavirus/passenger-throughput

More good news, US economy added 850k jobs in June, positive from last month at 538k and the BEST month since the very early stages of the recovery last year. What I thought was interesting is that over 6.8M workers not looking for work but want a job, compared to sub 4.5M precovid. Total employment in the US is now 146M, it was 152M pre-covid so we are close back to normal levels.

More so, today's data will increase the FEDs confidence in the labor market recovery which will pave the way for active discussion on tapering the months to come. As those talks lead to actual tapering, I would expect to see interest rates move higher than the 1.50 10yr treasury today, similar to the taper tantrum in 2013 - hopefully not to the same extent, as the velocity of movements were sharp and quick. The FED is buying $120 BILLION of bonds each month, I suspect they will taper their MBS purchases first as well as treasuries. Anyways, this would/should strip out some demand in these markets, expect a 2% 10yr near year end as this takes place, boding well for the TBT trade from a few weeks back now sub $19. Will look to start building a position, hard to fathom going any lower than 1.50%, easy interest rate/inflation hedge and hedge against those stocks that are interest rate sensitive.

Was actually just thinking about this again the other day. Looks like IV is relatively low for the June 2022 calls, but open interest is low apart from the $22 strikes. The Jan 2023 seem to be 50% more expensive for an extra 6 months. Guess I’ll need to start thinking about what to do with some of my growth names - they did not like the yield increase in March AT ALL lol.