I agree with the comment above (DMS123) and when it comes to shorting in my opinion there are many other better plays than Petsmart. Generally the demographics that go to Petsmart are families with children and people who are passionate about their pets. Now this doesn't mean if you go to Wal-mart and buy dog food that your not passionate about your pets, but when it comes to the customer experience you get at PetSmart, you are most likely to come back.
I think the mentioning that "PetSmart is over-staffed. PetSmart has over 23,000 full-time and 27,000 part-time employees. The company has 1278 stores. That's an average of 18 full-time employees" I believe this to be a tad-bit over generalized. From a consumer point-of-view I have never seen 18 employees in a PetSmart and one has to remember a lot of PetSmarts have a veterinarian on site/ possibly a vets assistant/ sales staff that is more knowledgeable that a Wal-mart pet section employee/etc etc.
I would only be concerned about PetSmarts competition if they decided to expand there Pet sections to include more services and offerings as PetSmart is doing. Right now, I don't see that happening as PetSmart still has a strong hold on the Pet market. However, On the flip side you are correct about the trading range/fundamentals, which it has been suck in for a while; I just don't think this is a great short sale candidate
How To Turn FedEx Rent Checks Into 21 Years Of Durable Dividends That Pay 5.6% [View article]
Nice article and I like the psychological approach you present to taking a look at this REIT form "does it make sense to be a Fedex landlord" can't complain about consistent performance.
Getting Ready For Spring By Investing In CF Industries [View article]
I could say why buy something that is up 27%? Im bullish on the fertilizer space in general. TNH, UAN and RNF have better dividends than CF, but with CF trading sideways I like this one as a catch-up play rather than buying the highs of RNF. I still like RNF and others, but would rather wait for a pullback.
Darden Restaurants - Wait For A Further Sell-Off Before Picking Up Shares [View article]
I would agree that Darden had some more downside to go and I like the stock in the 40-41 range. Darden's new pricing is focusing on a consumer that is spending, but is spending less. With both Olive Garden and Red Lobster focusing on specials that offer a lower price point this could bring down the average check spent and push consumers towards the meal deal. I believe that Darden is hoping that focusing on lower price points will drive more guests into the restaurants. Unfortunately a poor comp miss and an unsuccessful marketing strategy leaves Darden stuck in the middle, unless they can get more guests than anticipated in their restaurants
Comparing SHW to GOOG wouldn't be a fair comparison since the 2 are completely different companies. There has been insider selling, but it's essential to understand why there is insider selling. Some of the selling has occurred because this is how directors get paid by conversion or exercise price of a derivative security. A lot of times insider selling can be a tell sign, but this is still a solid company despite the high P/E. Since Oct 19 (last time I wrote about SHW) stock has been up about $10. Earnings are coming near on Oct 25 and this could be a make or break moment for this high flying stock. One of the very few stocks I would consider being bullish on despite the higher valuation.
Staples Restructuring Offers A Buying Opportunity Anew [View article]
" Wal-Mart (WMT) and the wholesalers -- looks like it is losing its popularity" This caught my attention and don't believe it to be true. both WMT and COST both up over 20% year to date and Staples for 2012 been down since March and I don't see much upside for the rest of the year. Reducing the size in square feet in stores and rent reductions are essential, but it's how much the stores are producing on a price per square foot that is equally important. If Staples isn't successful a increasing the amount the stores make on price per square foot the bleeding will only continue, just at a slower pace. I'm bearish on staples.
Step 7 is an interesting one since I believe the losers in the brick & mortar space need to build partnerships/work together. Competing against each other only helps out the giant brick and mortar/internet companies. The biggest thing about Radioshack that puzzles me from a consumer point of view, is that I believe they need to set themselves/operate differently from their competitors in order to effectively compete. Radioshack will prob be in a slow decline/negative sentiment for a while unless a major change in direction occurs.
Cost more yes, but return less?; lets take a look back:
On 8/3 for those who did this trade ( using 10 contracts bought for example)
OTM calls on 8/3: 10 x 26 (price on 8/3 0.26 x 100 = $26) = $260 OTM calls on 10/1 10 x 69 (current price .69 x 100= $69=$690 A profit of $43 per contract or a total profit of $430
ITM calls on 8/3 $6 cost 1.74 on 8/3 10 x 174 (1.74 x 100 = 174) = $1174 now 10 x 302(3.02 x 100=302) = 3,002 A profit of $128 per contract or $1,828
In example 1 you would have spent $260 to make $690
In example 2 you would have spent $1174 to make $3002
The only reason I am writing this is because there are always newer option traders that think because you will make more on a % return using OTM calls since they are cheap. The OTM calls are cheap for a reason and doesn't mean to avoid them, but I would only use them where the stock will need a major move to the upside to hit breakeven point. In the ITM calls one only need a small move to the breakeven point and gives you peace of mind/security. Of course you are paying more for this compared to the OTM calls. Either way OTM/in the money calls on this trade were profitable, but remember this isn't always the case
Trading Options On Smith & Wesson: Still Running On A Full Metal Jacket [View article]
There are many different point/styles to option trading, but I think we can all agree the main point is to make $ In these articles that were presented you didn't need to trade the option trades perfectly, simply just buying, holding and then cashing out; just as you would if you held stock. This is just one of the many ways to go into Smith & Wesson if you want to spend less, but if you only want to hold for a short period of time then maybe options suit you. Either way being on the bull side pays off.
Of course it might of been easier to just wait for the pullback and then write this article, but sometimes timing an article on a stock that you are bullish on, but waiting for a pullback can be a difficult thing to do.
Trading Options On Smith & Wesson: Still Running On A Full Metal Jacket [View article]
Lets take a look back on previous SWHC trades before judging a book by its cover. In my opinion Smith & Wesson may be a low priced stock, but with strong fundamentals as highlighted in the article. The price of a stock ( you call low--I call cheap based on fundamentals and a pattern of beating expectations) is a matter of opinion and of course it's easy to just look at the article and be like this guy is nuts stock is 11 and buying a $3 call???
Looking back On March 13 with the stock price @ $6.87 trade in first article that I recommended was June $5 call for 2.10 For investors that did this trade you could have sat back and did nothing for a month and would have made $80.00 per contract on 4/13 or held on longer till 5/13 and still made profit of $62.50 per contract.
Moving forward on July 15 I was still a believer and recommend Sept 7 call for $2.35
At the end of the month the contract was trading for $3.25 and if investors held on almost a month later the contracts were at 2.62 still making a gain.
With options there is always risk and thank you for pointing them out above. For investors that don't like the idea of just buying a call in previous past articles I recommended vertical call spreads that were all successful, by simply getting paid to wait.
PetSmart Due For A Correction [View article]
I think the mentioning that "PetSmart is over-staffed. PetSmart has over 23,000 full-time and 27,000 part-time employees. The company has 1278 stores. That's an average of 18 full-time employees" I believe this to be a tad-bit over generalized. From a consumer point-of-view I have never seen 18 employees in a PetSmart and one has to remember a lot of PetSmarts have a veterinarian on site/ possibly a vets assistant/ sales staff that is more knowledgeable that a Wal-mart pet section employee/etc etc.
I would only be concerned about PetSmarts competition if they decided to expand there Pet sections to include more services and offerings as PetSmart is doing. Right now, I don't see that happening as PetSmart still has a strong hold on the Pet market. However, On the flip side you are correct about the trading range/fundamentals, which it has been suck in for a while; I just don't think this is a great short sale candidate
How To Turn FedEx Rent Checks Into 21 Years Of Durable Dividends That Pay 5.6% [View article]
Getting Ready For Spring By Investing In CF Industries [View article]
Getting Ready For Spring By Investing In CF Industries [View article]
Darden Restaurants - Wait For A Further Sell-Off Before Picking Up Shares [View article]
Sherwin-Williams: Painting Toward Bleak Share Price Action [View article]
Staples Restructuring Offers A Buying Opportunity Anew [View article]
"Sales per square foot"
Staples Restructuring Offers A Buying Opportunity Anew [View article]
Is It Time To Bet On Radio Shack? [View article]
Long Call Grand Slam [View article]
On 8/3 for those who did this trade ( using 10 contracts bought for example)
OTM calls on 8/3: 10 x 26 (price on 8/3 0.26 x 100 = $26) = $260
OTM calls on 10/1 10 x 69 (current price .69 x 100= $69=$690
A profit of $43 per contract or a total profit of $430
ITM calls on 8/3 $6 cost 1.74
on 8/3 10 x 174 (1.74 x 100 = 174) = $1174
now 10 x 302(3.02 x 100=302) = 3,002
A profit of $128 per contract or $1,828
In example 1 you would have spent $260 to make $690
In example 2 you would have spent $1174 to make $3002
The only reason I am writing this is because there are always newer option traders that think because you will make more on a % return using OTM calls since they are cheap. The OTM calls are cheap for a reason and doesn't mean to avoid them, but I would only use them where the stock will need a major move to the upside to hit breakeven point. In the ITM calls one only need a small move to the breakeven point and gives you peace of mind/security. Of course you are paying more for this compared to the OTM calls. Either way OTM/in the money calls on this trade were profitable, but remember this isn't always the case
Trading Options On Smith & Wesson: Still Running On A Full Metal Jacket [View article]
Of course it might of been easier to just wait for the pullback and then write this article, but sometimes timing an article on a stock that you are bullish on, but waiting for a pullback can be a difficult thing to do.
Trading Options On Smith & Wesson: Still Running On A Full Metal Jacket [View article]
Trading Options On Smith & Wesson: Still Running On A Full Metal Jacket [View article]
Looking back On March 13 with the stock price @ $6.87 trade in first article that I recommended was June $5 call for 2.10
For investors that did this trade you could have sat back and did nothing for a month and would have made $80.00 per contract on 4/13 or held on longer till 5/13 and still made profit of $62.50 per contract.
Moving forward on July 15 I was still a believer and recommend Sept 7 call for $2.35
At the end of the month the contract was trading for $3.25 and if investors held on almost a month later the contracts were at 2.62 still making a gain.
With options there is always risk and thank you for pointing them out above. For investors that don't like the idea of just buying a call in previous past articles I recommended vertical call spreads that were all successful, by simply getting paid to wait.
Trading Options On Smith & Wesson: Still Running On A Full Metal Jacket [View article]
Trading Options On Smith & Wesson: Still Running On A Full Metal Jacket [View article]