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Rick Spencer
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I am a private investor with fifteen years of experience in various roles in the investment industry.
  • GNC Opens The Year Weak...Time To Buy?  0 comments
    Jan 4, 2013 3:53 AM | about stocks: GNC

    GNC took a quick hit to start the year opening close to $34 on Wednesday before dipping to $31 midday Thursday. The company reports 4th quarter earnings on 2/11/13. The consensus estimate is $.46 per share. GNC has beaten estimates for the last six quarters.

    At current levels GNC is selling at 15X TTM earnings. For a company with 4% revenue and 12% EPS growth rates over the past five years this appears to be a very reasonable valuation. Several well-known hedge funds hold positions, including Citadel Investment Group, which increased its position by 80% in the 3rd quarter.

    GNC has been a good buy-write candidate over the last year as well. 30 day implied volatility is currently 46.87%. The options are reasonably liquid with the February 35 calls trading at $.80 bid - $.90 ask currently.

    I have maintained a small position in GNC to write calls against (currently the January 35's). I am strongly considering closing out the calls in the next few days and holding the stock for appreciation going forward with a trailing stop.

    Disclosure: I am long GNC.

    Stocks: GNC
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