בס״ד

Closing One for 136%! – and Playing the Human Chattel Trade (KFY,CELH)

Posted on March 8, 2021

Bright and breezy blow the winds of wealth this morning, friends.

It’s time to cash in!

We’re closing one down today for a very solid profit of 136%.

It was our Celsius trade (CELH), opened the 24th of December, whose details can be found here.

To summarize, we’re holding the April 16th 55 synthetic PUT and a credit of $0.80.

And…?

With CELH now trading at $51.87, the short CALL goes for $6.50 and the long PUT sells for $9.10.

Buy back the former, sell off the latter, and you pull in a grand total of $5.90 on $2.50 spent.

And that amounts to a ten week haul of 136%.

We’d call that some fine spring weather, brother.

And now for today’s effort.

We’re venturing the corporate slave trade this morning with a look at recruitment specialists Korn Ferry (NYSE:KFY), an outfit that’s been moving bodies about the globe for money since 1969.

The company’s shares have moved up strongly over the last month on increasing growth expectations, but, alas!, things got a wee carried away, in our opinion.

  • With a P/E of 71.03,
  • A Price to Book of 2.68 (not so crazy),
  • And a Dividend Yield of 0.65%,

We say there’s not much there.

Additionally, we see that

  • Quarter over quarter sales and earnings are NEGATIVE 56.20% and NEGATIVE 67.40%, respectively.

What the…?

What happens quite often after a dismal quarter is much better sales and earnings are forecasted, leading to momentum traders piling on without thinking, and a bubbly stock price the end result.

We weren’t the only ones to see it, either.

Between February 23rd and March 1st, while the stock was cresting at multi-year highs, insiders sold off just shy of 20% of their holdings, for a cool $12 million.

Now look at the chart –

With kind regards,

Hugh L. O’Haynew

 

3 responses to “Closing One for 136%! – and Playing the Human Chattel Trade (KFY,CELH)”

  1. Hugh L. O'Haynew says:

    bs’d
    Small error to report in the mail-outs that arrived this morning.
    We noted the breakeven for the trade, then mentioned it was currently ITM.
    It is not ITM.
    It’s slightly OTM.
    Apologies,
    Hugh

  2. Max Reinier says:

    VMI Synthetic Put
    Hi, today VMI was up and down multiple times through the 240$ limit for Stop Buy and Stop Sell orders . I ‘ve been executed twice , first on the buy , then on the sell .
    My short call leg is now naked , not very comfortable…
    What do you suggest ?
    A Buy Stop at $245 ? ( loss of 500$)
    Or any other trick ?
    Thanks

  3. Matt McAbby says:

    bs’d
    Hi Max,
    Good to hear from you.
    Looks like it’s cooling here, but action is required.
    Your solution is likely best.
    245 will give it some play, and still limit your downside.
    Be sure, however, to lower the STOP as price declines.
    And may the Holy One of Israel be with you!
    Matty

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