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Pep Boys - Manny, Moe & Jack Message Board

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  • shorthighcoverlower shorthighcoverlower Mar 20, 2010 3:43 PM Flag

    did the math, got mixed results

    how much did they say sales were down in the first five weeks? are you saying you are bearish on PBY and you plan on buying put options or will you only do so if PBY rallies to the $10.50-$11.00 vicinity? why not simply sell the shares short? that way you don't have to worry about the time factor associated with option contracts > I guess it is a no brainer that sales will be down..but I don't see how a tire recall could hurt sales--I am sure the tire mfg is reimbursing PBY for its labor cost to replace the problem tires with new tires, so this action could actually help boost sales. Remember, I need all the help I can get, since I am uneducated (I have a fourth grade education) and financial terms and theories are esoteric as well as intimidating!

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    • This was the comment O'Dell made during the call that crashed the stock:

      "I do need to temper my comments a little bit as the warmer weather during the first five weeks of the quarter as compared to last year’s cold and snow has resulted in sales of tires and cold weather related services being off to start the quarter. However, we do believe that the weather impact on the start of the quarter is temporary as evidenced by our sales trend the last several days as the weather has changed."

      For the record, my play on puts this time possibly is due to my belief that PBY will overall disappoint this quarter. AAP and ORLY both disappointed on sales (AAP) and ORLY (earnings). Both were down 2-3% trendwise in sales. I still like PBY longterm because of real estate and the hope they get competent management one of these days. The NEW COB has done absolutely nothing when I expected him to stir it up. The Barrington guy was much better and I had no use for him. The scary thing is that PBY appears to be moving up on expectation of something positive. The increase has already been built in. I only see downside. We are in a crazy market right now. I can name you a dozen stocks that blew away projections and went down when they reported it....just in the past few weeks. I think PBY will disappoint this quarter. I can control more stock with puts than shorting the stock. If PBY gets to $11 before announcement, I see $1 upside with a blowaway report and a drop to $8.50 if they don't. That's 2 1/2 to one odds...DaninFW

    • Tire recall may be a non-financial wash but bad publicity doesn't help....DaninFW

 
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