Closing Four Trades For a Mind-Blowing 883%, 135%, 45% and 28% – and Opening a Casket of Riches! (SCI, ALB, RVLV, GNRC, WDFC)

Seat belts on, rodeo-fans!

We start with our ALB initiative of August 12^th.

The letter was called Lithium Chemtrail Leads to Goldmine Profits! and it recommended you sell the ALB September 17^th 250/260 CALL spread for $1.80 and buy the ALB September 17^th 210/195 PUT spread for $2.10.  Total debit on the trade was $0.30.

And now…?

We’re wrapping her up.

Close the CALL spread (buy back the 250 and sell the 260) for a debit of $0.95 (1.85/0.90) and sell the PUT spread for a credit of $3.90 (7.20/3.30), and you walk with $2.65 NET on just $0.30 spent.

And that’s 883%.

IN ONE BLEEDING WEEK!

Next up is our RVLV trade that arrived in a missive entitled Watch Revolve Dissolve. Again. on July 26^th.

The trade had you sell the RVLV September 17^th 75/80 CALL spread for a credit of $1.10 and buy RVLV September 17^th 65/55 PUT spread for a debit of $3.65.  Total debit was $2.55.

Here, too, we’re closing the CALL spread for a debit of $0.30 (0.35/0.05) and the PUT spread for a credit of $6.30 (9.40/3.10).

That gives us a NET take-home of $3.45 on $2.55 spent.

Another wham-doggy profit of 135%…

IN JUST 24 DAYS!

Moving right along, we get to our July 1^st GNRC wager.

The communiqué was called Stock Market Degenerates – You Know Who You Are…  and it beseeched you to sell the GNRC August 20^th 420/430 CALL spread for a credit of $3.10 and buy the 390/370 PUT spread for $6.30.  Total debit was $3.20

And now?

With GNRC trading at 390 and expiry tomorrow, we’re taking no chances.  Cash in the long 390 PUT for $4.10 and leave ALL the rest of the options to wither.

We expect them to expire worthless, leaving you with $0.90 on an initial debit of $3.20.

That’s a very clean 28% in seven weeks.

We’ll update you in the unlikely event that further action is necessary.

ONE MORE WINNER!

Finally, our WDFC trade, whose details can be found HERE.

The gist of it is we’re holding a credit of $5.70 and one short 240 CALL that expires tomorrow.

And again, we’re taking no chances.

Buy back the CALL for $1.25, and you walk with $4.45 NET on an initial expenditure of $9.80.

That’s a Jim-dandy 45% return.

It’s also four hundred and forty-five bucks!

That’s also right…

We played the death industry for an 800% gain back in October, 2019 – but that was an upside bet on a different set of shovel-clutchers.  Today, we bear the palls with a downside initiative on Service Corp. International (NYSE:SCI), “deathcare” product providers – according to the company’s own literature – operating in the U.S. and Canada.

Can you dig?

Fundamentally, SCI shapes up as follows –

• P/E is a relatively respectable 15.73 (though it historically trades with a far lower multiple),
• Price to Book is a bloated 5.69,
• Dividend Yield is 1.30%,
• Debt/Equity is also puffy at 2.00.
• Beyond that, analysts are expecting EPS in the year ahead to decline by 18.90%, and
• Insiders spent the last six months unloading 20.17% of their holdings, to the tune of $55 million (!), the vast majority of which was dumped in the last 30 days.

SCI delivered earnings at the end of July, and the stock overreacted, in our view.

Earnings and sales beats she delivered, yes, and upped the dividend marginally, as well.  But as the chart below will show… c’mon gang!

There’s too much fundamental risk in the mix – not to mention the technicals.

Take a look –

Technically, we have –

1. An extensively overbought RSI condition that has (finally) invited some selling (in green).
2. At the same time, MACD is now rolling over, and together with RSI should give the bears a more confident posture.
3. And finally, the rise of the last three weeks has left prominent gaps at 55 and 58.50, both of which will have to be filled.
4. Simple Fibonacci retracement calculations foretell declines to 54 (where support at the rising 137 day moving average now resides) or 46 (in purple).

And it’s for all the foregoing that we’re moving like this –

A Jew and His Money recommends you consider selling the SCI December 17^th 60/65 CALL spread* for a credit of $2.50 (5.60/3.10) and buying the SCI December 17^th 65/60 PUT spread** for the same $2.50 (4.20/1.70).  Zero premium is the result.

[*Sell the 60 CALL and buy the 65 CALL. **Buy the 65 PUT and sell the 60 PUT.]

Rationale: The trade costs nothing to set and offers us maximum downside winnings of $5.00.

Max loss is also $5.00, should SCI push toward new highs before expiry.

In the short term, we don’t see that happening, and in all likelihood we’ll close the trade well before expiry.

Breakeven arrives at $62.50, a mere 2.5% below the current price.

May the G-d of Israel shine His countenance upon you!

Many happy returns,

Matt McAbby

Follow @HughLOHaynew