בס״ד

Three Days Later, We Close for 4700%! …and Kix, Chex, Trix – They Call it Food, and We Eat it. (GIS, KLAC, UPS)

Posted on May 12, 2022

General Mills’ (NYSE:GIS) options are offering incredible value to today – but only to those whose investment savvy affords them artisan-like know-how into the craft of multi-directional leveraged security applications.

Call it what you will, but it works.

And no giggling…

Closing Trades

Before we get to the today’s GIS boilermaker (with a 4900% take on offer), we’ve got two open bets that can now be terminated for profit.

First up is our KLAC trade, opened just THREE DAYS AGO, on May 9th.in a letter called KLA Has a Chip on its (Right) Shoulder.

The trade recommended selling the KLAC June 17th 380 CALL for $4.70 and buying the KLAC June 17th 260 PUT for $4.80.  Total debit was $0.10.

In order to avert a catastrophic loss, we also urged you to set a STOP buy on the shares at 380.

And today…?

KLAC has declined nicely, so we’re recommending as follows –

Sell the 260 PUT for $4.80 and leave the STOP buy in place (along with all conditions recommended at the open).  In the unlikely event that the stock climbs nearly 25% in the next month, you’ll remain protected.

Either way, though, you’ll still pocket an incredible 4700%!

For those who wish to avoid the stress of that potential rise toward 380, you can also buy back the short CALL for $3.70.

Do it, and you walk with precisely $1.00 (1000%) for your troubles.

Should you opt for that measly 1000%, just be sure to cancel the STOP at the same time.

Next is our UPS initiative whose particulars can be accessed HERE.

To sum, we’re holding one short lot of UPS with a breakeven at $178.20.

With the shares now trading at $177.46, we’re crying uncle.

Buy them back and you exit with $0.74 on an initial credit of $0.75.

Adjusted for minimal commissions, gives you a 893% haul.

And that’s just fine by us.

——————————————-

Now for today’s General Foods delirium.

Minneapolis’ GIS, of course, is famous for its branded cereal digestibles, but did you know the company also markets “wellness beverages” and “shelf-stable vegetables”?

A poison by any other name…

Consumer staples have been doing well of late, but like every market leader, the time eventually comes to relinquish the poll position and take a drubbing.

And that’s precisely General Mills’ fate, in our humble estimation.

With inflation (and shrinkflation) taking their bite, and an FDA investigation into Lucky Charms (1000’s poisoned – no joke) and analysts expecting sluggish growth for the coming year, we say the stock’s latest rise is her final one – for the time being.

Fundamentally, GIS presents thus –

  • A multiple of 19.18x last year’s earnings (and too high by half, in our reckoning),
  • A dividend yield of 2.84% (which is fine, by today’s standards),
  • Price to book of 4.44 (again, no bargain),
  • Debt/Equity at 1.25 (also bloated), and
  • Insiders have been busy selling their shares over the past six months – 30.06% of them, in fact, for a $17 million total.

And why not, when you can buy them back cheaper, later?

Now look at the chart –

That’s what used to be called a hum-dinger.

When the forces of evil have fully surrounded the Holy Jewish nation and only the Living G-d of Israel can bring salvation…

So it comes.

May it be b’rachamim.

And may you, too, good Jews and Noahides, find yourselves on the right side of the geulah shleimah.

Many happy returns!

Matt McAbby

 

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