Posted on September 22, 2022
Genuine Parts Company (NYSE:GPC) is best known in the investment world for its dividend payout record.
The company has an unbroken, 66 year history of raising its shareholder remittance at least once every twelve months.
And that’s impressive.
At the same time, stocks don’t drive one way northbound forever.
And it looks to us like GPC’s latest 30% run higher – in just three months – is overheated.
Anyway, for all of GPC’s hydraulics, pneumatics, hoses and gaskets, this Atlanta, Georgia outfit’s race has now been run.
Look at the fundamentals –
Bottom line is the stock began making moves this year when the prospect of buying a new car took a back seat to holding on to the old jalopy, because no one had any money.
Going forward, though, prospects are devilishly flat.
are all taking a bite out of earnings.
And that’s not likely to change soon.
Now look at the chart –
Technically, we see –
And it’s to those levels that we’ve geared our trade.
Have a gander –
A Jew and His Gold recommends you consider selling the GPC December 16th 150/155 CALL spread* for a credit of $2.20 (11.30/9.10) and buying the GPC December 16th 150/145 PUT spread** for $2.60 (6.10/3.50). Total debit on the affair is $0.40.
Rationale: $0.40 buys us a chance at a $4.60 payday, which is perfectly acceptable (1150%).
Max downside is $5.40 (difference between the CALL strikes plus the initial debit).
Breakeven hits at $149.60, a 3.8% decline from the current price.
And the full sweepstakes are pocketed with a decline of 6.8%.
And we have nearly three months to get there.
And a nasty election on the way.
And the FED.
And climate change lockdowns.
And civil strife.
And who knows what the hell else…
In other words, book it.
Many happy returns!