633% Banked! and… Extraordinary Leverage on EME Offers 3233% Payout! (EME, HELE)

We’ve got a whacko trade for you today, based on some very strange option prices we dug up on EME…

That could deliver a huge 3233%!

First, though, we’re closing our HELE trade for good.

You’ll recall that we made partial moves HERE to shut her down, leaving us with a credit of $3.30 and an open, short November 145 CALL.

And now…?

We’re buying back the CALL for $2.20.

That gives us $1.10 NET on nothing spent.

After accounting for minimal commissions, that’s 633%.

This week’s trade features EMCOR Group (NYSE:EME), the electrical infrastructure mavens, serving big government and corporate interests across the U.S. and U.K.

Major Turning Point

It appears something happened on the way to fleecing the bottomless cash pits of the Statist-Industrialist hegemons, and it looks like this—

That’s right; the stock went haywire.

This is a monthly chart of EME for the last 25 years, and it clearly shows an unsustainable price trajectory—one that we feel is now ripe for the sniper.

But before we deliver the silver bullet, let’s take a look at some numbers.

FUNDAMENTALS

• P/E is high, in a voltage-impaired way, at 22.42.
• Dividend Yield is a barely zappy 0.32%, while…
• Price to Book is an electrocuted chicken at 5.06.
• Maybe most important: analyst consensus is for 1.00% EPS growth per year for the next five years.

And that essentially means NO price gains to speak of.

The full measure of the stock is now baked in.

And like the bite of a bulldog, very little pleasure forthcoming.

Have a look now at the daily—

And may the best skier win!

Great G-d Al-mighty! You know I love you!

With kind regards,

Hugh L. O’Haynew

Follow @HughLOHaynew