Who Profits From Hawaiian Wildfires? (STRL, RH)

According to the company’s own propaganda, Sterling Infrastructure, Inc. (NASDAQ:STRL) “undertakes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, light rail, etc.” in the American west and HAWAII.

And it just so happens that on the day the wildfires began on Maui, STRL stock jumped by better than 20%!

Why?

Because new contracts were now in the offing?

Because the company had already locked in deals to ‘rehabilitate’ a charred, raw and desolate corner of the island state?

Truth is, we have no idea…

Or could it be the massive gap higher in price (see chart, below), was precipitated by earnings, released just one day before?

Again, we have no idea…

We’re not prophets.

We’re the sons of prophets, yes.

So, a little patience, please, until we get up to speed.

NOW FOR SOME CASH!

We’ll return to STRL momentarily, right after we tweak our RH trade.

You’ll recall that we opened the RH initiative back on July 19^th in a letter called Redecorating Your P&L.

The idea was to sell the RH September 15^th 400/410 CALL spread for $2.40 and buy the RH September 15^th 330/320 PUT spread for $2.60.  Total debit on the affair was $0.20.

And with RH now on a downswing, we see a fair opportunity to close our long 410 CALL for a hefty $5.30.

We’re leaving the short CALL as is, and the PUT spread, too.

With the next retrenchment, we’ll look at closing one or both.

Or Washington…

Fundamentals

The numbers on STRL are not so sanguine…

For instance—

• P/E is 21.79, but analysts expect a contraction to 16.60 a year from now.
• Dividend Yield is ZILCH.
• P/B is a haughty 4.47.
• And insiders have dumped 21.10% of their holdings in the last six months for a $9 million haul.

Meh…

Now the chart—

Only the G-d of Israel!

!אין עוד מלבדו

Many happy returns!

Matt McAbby

Follow @HughLOHaynew