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L Brands, Inc. Message Board

  • richdude5525 richdude5525 Mar 16, 2010 10:19 AM Flag

    Easy money

    Mortgage your house and buy LTD puts go all the way to June expiration. I just bought a whole lot of puts. The price is going to tank after the dividends are paid out.

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    • don't be interjecting facts into the case. that will not due.

      I think this guy just likes to bash...go check out his posts on other stocks. he spouts crap, but can never put together a solid arguement.

    • Fair Enough. Tax Day. April 15th. or option expiration day on the immediate Friday 16th is fine too.

      Since you were claiming LTD was the most expensive stock in the sector I did a quick run down on some usual suspects.

      Stock Current PE Forward PE
      LTD 18.02 14.37
      ARO 12.52 9.71
      ANF 14836 18.07
      GES 20.92 15.96
      COH 18.92 15.89
      ANN -- 20.42
      BEBE -- 103.56
      HOTT 23.51 18.00

      Based on this list... I would say ARO is the cheapest stock (best buy here) and LTD is second. But LTD is probably also less risky.

      These are various mall specialty stores/luxury items. We could add stocks like TIF, GYMB, ...

      But I think your argument that LTD is unusually high for the sector is just FALSE.

    • if consumers are not out spending, why had LTD been able to post positive sales increases (both same store and overall)

    • I've alreadt taken the position (long puts) today. We will find out in a month or so who is right. If anyone in his right mind believes that the retail stocks are up because the consumer is out spending then he needs to get his head checked.
      This was just a sector rotation by the hedgies and the institutions (JPM especially). When thet rotate out just watch out.
      Today LTD became the most overvalued stock in the retail sector.

    • Institutions may or may not have had an early-idea. So your saying the stock went from $7.83 to 24.85 (today) because there was a $1 dividend in the works. Wow..? that doesn't work for me!

      We're up because retail in general has been surprising lately and LTD never really faltered. They paid their .15 dividend throughout... they've done quite a bit of cost cutting and now the profits are going to pick up.

      Sure on April 6th the stock will be adjusted down a buck! But so will the effective value of the puts. LTD is also one of the last companies to report (around 5/8) in the Q so you won't even see a post earnings pullback until 2nd week of May.

      After that?? you may be right. It will depend on the job data going forward.

    • I would think the option price are priced accordingly (there is no free lunch)

      I am a by stander and now really interested in picking up some LTD. LTD management demands a HUGE short squeeze. They are determined to go all out to push LTD to 2007 high

      Not sure how it will ends but short term LTD is going up

    • I'm not so sure about a tank. I wouldn't be suprised by a little pull back, but not a tanking.

      They have had they are going to buy upwards of $200M worth of shares. That about ~8M shares (at the current price) or 2.5% of the outstanding shares. Typically, a share repurchase is a bullish signal. Add on the special dividend and you have a second bullish signal.

      Then we look at what the price target is. I have a one year target price of between $28-32 based on the last confrence call. Of course with the share rebuy, those targets need to be adjusted. So now i'm looking at $29-33.

      So yes, i wouldn't be suprised by a small pull back, however, i expect longer term we will continue to see LTD climb.

      This all assumes no major new issues in the economy.

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