One strategy would be to sell the 40s and buy the 41s each week. Likely to stay in this range until/if a deal is announced.
Or you are just reading into it too much...the stock has basically dropped close to 10% in two weeks...eventually a small bounce occurs. Covered calls have made good money the past two weeks, or I should say at least limited my losses.
Good points - I can see them doing well private because then it is about providing a profitable product in which consumers come before shareholders and not dealing with a short-sighted BOD that somehow likes doing a buyback over expansion or dividends. I hate buybacks because all they do is re-issue the directors the shares in the form of cheap options and bonuses while falsely boosting the EPS.
Best guess is we will not go another quarter without a decision from Chip.
That is not at all what has caused sales to drop...complete red herring argument. PR blunders, product recalls/deficiencies, and increased competition caused defection from the brand. The management tarnished the brand name; however, closing the stores is not the solution as that would further erode the band awareness. Most shop, at least the first time, in the store for the clothing to see if it fits and how it feels. They will re-order online, but the stores are what grab the customer. Regardless of the CNBC jargon of online sales, people still want to get out, see, feel, and experience shopping offline...at least for that first purchase.
Highly doubt he is selling his shares - much too adamant as the founder about moving with this company and don't see him abandoning it, especially right now. However, he could be selling a stake to an activist investor who could call for a proxy fight and all they would need is for 24% to side with them to pass any resolutions.
Not sure PE has the stomach for LULU based on the high price:earnings ration and lowered growth forecasts. Even if it does, it will likely be at a much lower premium than the Ya-Hoos on this board have been calling for - you would be lucky to see 50 right now (25% premium) and I would actually expect to see 46-48 realistically.
Or it is announced there is no deal and we see sub 35. Don't assume PE wants this so bad, and even if it does, why not wait until it is even cheaper.
So you just named the strategy here...sell covered calls and buy puts each time this spikes. Pays off well each time...
True they lack on the female consumer. However I would counter with the fact that LULU's sales have slowed...thus you have a few options for where those sales have gone - either women are not buying this style (not likely based on anecdotal evidence in walking the streets) or you have competition taking sales.
When you say p/e, can you provide more info? If referring to price/earnings, then the company is really right where it should be and deserves nothing more based on growth prospects.
I don't expect this to go the way of ARO, but it is definitely disappointing to see yesterday's report. I just don't see an actual buyout until we see the company go into the low 30s or even 20s. Why buy it for 6B when you can do it for 4-5 if the lack of growth continues.
Ok, but from who and based on...? A premium will only be paid if there is a reason to pay the premium, which right now there is not - growth has drastically dropped.
For the second quarter of fiscal 2014, we expect net revenue to be in the range of $375 million to $380 million based on a total combined comparable sales decrease in the low to mid single digits on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.28 to $0.30 for the quarter. This guidance assumes 146.0Â million diluted weighted-average shares outstanding and a 30.2% tax rate. The guidance does not reflect the potential repurchase of shares.
For the full fiscal 2014, we now expect net revenue to be in the range of $1.770 billion to $1.800 billion based on a total combined comparable sales increase in the low single digits on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $1.50 to $1.55 for the full year, or $1.71 to $1.76 normalized for the one-time tax adjustment related to the planned repatriation. This guidance assumes 146.3Â million diluted weighted-average shares outstanding and a 38.6% tax rate, which includes the tax adjustment for the planned repatriation, or 30.2% before the tax adjustment. The guidance does not reflect the potential repurchase of shares.
Dude is a coin flip...never goes back and looks at his losers, but over-promotes his winners. Makes everything over-dramatic.
You could sell weekly covered calls to lock in a profit...just a thought if you want to hedge through earnings and don't care if you hold long-term.
Nice, bought back my 81s for a small profit and sold the 80s expiring Friday for .80. Figure it will hold below 80, and if not, it is still about $2K in 4 weeks and I can walk away happy with that. Played this long enough - too many other good covered call plays out there (TWTR, TSLA, FB, even PG).
Very nice. Would be content to see this rise above 81 by week's end, but pretty much guessing it will continue its normal pattern of giving back gains tomorrow followed by closing the week between 76-78.
Have 100 in IRA as well at ~85 too, but have now since February sold monthly 85s and am about break even. It provides some nice tax free cash flow as well.
Have 10x 81 cvd calls set to expire next friday. Figuring I keep the premium and prep to sell again on 9 June.
and once again the pattern settles. 77.29 , just as predicted. It climbed into the 78 range but settled back down. Another week of covered call premium decay and profit. Would love for this to breakout to above 81 by next Friday, but don't see it.
Monday will see this move to close to 80, as usual, then back off and again end next week in the 77-78 unless some sort of outlier catalyst occurs. It is dead money (outside call selling) until next ER. This will either prove to be an accumulation point or overpriced buy based on the next ER results.
Could not hold a gain if its future depended on it. Once again another pop and fade. Back into the 78+ range and then back to the 77.50 range. Non-stop pattern repeating itself.
Your entire basis of value is cash flow and innovation. Yet reality is that the stock fails to produce results in 2/4 seasons. It won't command the valuation you note until it can show it is not a fickle season based stock that can likely show slowed/flat growth in warm weather. We can debate this all day, but the simple fact is that the stock IS valued at 2.65B and you arguing higher will not push it higher. The stock has to show the market it is deserving of a 4B valuation which right now it is simply not.