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Win/Win: Closing Two for 667% and 104%; And Investment Cruelty: Watch Us Torpedo a Sinking Ship! (AQUA, EVRI, SJM)

Posted on September 2, 2021

We’re going full marine today with a bet on AQUA stock, but before we get there, we’ve got two closing for a pirate’s treasure.

We start with our EVRI trade that graced your inbox on July 8th.

The directive was called Upping the Ante With a Cure for Gambling.  It urged you to sell the EVRI September 17th 25/30 CALL spread for a credit of $1.25 and buy the EVRI September 17th 25/22.50 PUT spread for $1.40.  Total debit on the trade was $0.15.

Today, we’re of the opinion that the CALL spread can be safely left alone, while the PUT spread can be closed for a profit.

The long 25 sells for $2.55 and the short 22.50 for $1.40.  Sell the former and buy back the latter and you step out with $1.00 NET on $0.15 laid out.

That’s a profit of 667%, and should buy you several weeks’ worth of T-Bones for the whole family down at the Lincoln Grill.

All depends upon the CALL spread finishing out-of-the-money, of course, and we’ll be watching closely as the days tick down to expiry.

Right back at ya if any action needs be taken.

NEXT!

We’re closing down our Smucker’s (SJM) initiative, all the details of which can be found HERE.

In short, we’re holding the October 15th 125 synthetic short and a credit of $1.56.

And…

The 125 CALL sells for $2.30 while the 125 PUT goes for $4.40.

Buy back the first and sell off the second, and you exit the trade with a jam-dandy $3.66 NET on an initial debit of $3.50.

And that’s a sweet-as-can-be 104%.

Today’s play is a straightforward torpedo shot at an already sinking ship.

We’re betting on a decline in Evoqua Water Technologies Corp. (NYSE:AQUA), a company that develops and deploys water and wastewater treatment systems, has a global reach and is based in Pittsburgh, where they know a thing or two about dirty water.

Fundamentals

The stock’s vital statistics are pure sludge –

  • P/E is a sewer-like 84.63 (!),
  • Price to Book is 8.46, while
  • Dividend yield is plain old dry (as in nuttin’!).
  • Q3 earnings (August 3rd) missed by better than 10%.
  • Meanwhile, insiders divested 23.13% of their holdings over the last six months, directly after Private Equity giant AEA dumped their entire stake in the stock – some $545 million worth (see chart, below).

The company last week agreed to a settlement after serious flaws in its governance regime led to a shareholder lawsuit.

Now to the charts –

She’s a moving target, friends.

May the G-d of Jacob protect you, fellow Jews and Noahides.

And bring you many happy returns!

Matt McAbby

 

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