A Tale of Two Equities… And a Potential Return of 14,900% (BJ, VOD)

“It was the best of times, it was the worst of times…”

…For two separate stocks, from completely different industries on two distant continents that gives us our trade for the day.

This one’s a fun one, built specifically for Yom Kippur.

Glad you’re with us.

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Now back to the trade.

It looks like this –

We’re pairing Westborough Mass’s BJs Wholesale Club Holdings (NYSE:BJ) with the UK’s Vodaphone (NYSE:VOD) in a doozy of a matchup that’s set to deliver an astonishing 14,900% in fairly short order.

If we’re right.

It’s got every angle you could ever want from a pairing – time advantages, massive leverage, a known limited downside and a strong (two-way) directional bias.

So let’s get straight to it.

We start with BJ, a retail outfit with a clubby structure.

Get a load of this –

• BJ trades with a too-high P/E of 20.48.
• Offers no Yield.
• Is now boasting a BLOATED P/B of 11.48.
• Has a Debt to Equity load that’s excessive at 1.23.
• And grew EPS by just 1.90% over the last twelve months.

Not good.

More intriguing, though, is the chart –

IMPORTANT: Pay close attention to expiries (especially) and strikes.

And may G-d reward His people generously with a year of health and plenty for their mesirut nefesh and desire for kappara from the Yom Kippur fast.

.צום קל. גמר חתימה טובה

With kind regards,

Hugh L. O’Haynew

Follow @HughLOHaynew