Posted on February 16, 2023
Maximus Inc. (NYSE:MMS) is the subject of today’s trade.
The company basically creates the governmental overreach nightmare we’ve all come to hate. How? By providing thick-headed, bullying bureaucrats with the software necessary to realize their vengeful agenda.
But more on that after we close two for big wins.
First, we shut down our ARMK trade, launched on February 6th in a dispatch called Revenge of the Creepy Janitor. There, we urged you to sell the ARMK April 21st 44/47 CALL spread for $1.10 and buy the ARMK April 21st 43/38 PUT spread for $1.20. Total debit was $0.10.
We’re recommending you buy back the short 44 CALL for $0.25 and sell the PUT spread for $2.90 (4.10/1.20).
Do it, and you skippidy-doo down the corridors of power with $2.55 NET on a dime laid out.
Mathematics informs us that’s a 2550% win.
On December 19th we shot you a trade in McDonald’s Greases our Wallets Real Good.
The idea was to sell the MCD February 17th 270/280 CALL spread for $3.85 and buy the MCD 270/260 PUT spread for $4.30. Total debit on the deal was $0.45.
Today, the 270 CALL can be repurchased for $0.30 and the PUT spread can be sold for $3.34 (3.50/0.16).
Get it done and you step away with a trans-fatty $2.89 NET on just $0.45 spent.
And that’s a super-size 642% in under two months.
Back to Maximus.
The story here is a simple one.
The stock announced earnings last week amid the general market euphoria, and everyone got carried away.
Consider some fundamentals—
Not a romantic picture, we say.
When a government contractor can’t pull off profits, you got a big problem.
And that suits us fine.
Many happy returns!