Posted on August 9, 2021
Exponent Inc. (NASDAQ:EXPO) was founded in 1967 to advise the corporate world in all matters science and engineering.
A group of smart whipper-snappers, they even managed to develop housing complexes based on a LEGO model.
Anyway, we had a look at both the technical and fundamental picture over the last several weeks and feel it’s now time to act.
Consider the following –
Why? Because earnings are expected to shoot skyward?
So why all the excitement?
All told, we believe this puppy should deliver little more than a knuckle sandwich to the chops of anyone now considering dropping any coin on her.
We don’t like stocks like EXPO, that have nary a leg to stand on, but that Wall Street treats like a favorite son.
Earnings were announced at the end of July – and yes, they beat estimates ($0.48 instead of $0.42) – but the elevation hasn’t ceased ever since!
On zero news.
It’s all a bit much, truth to tell.
Have a look –
Technically, the chart is very troublesome –
And that’s what we’re betting on.
A Jew and His Money recommends you consider the short sale of EXPO stock, now trading at 115.04 and the purchase of a protective EXPO September 17th 120 CALL option for $1.90. Total credit on the trade is $113.14.
Rationale: the options on offer for EXPO fully reflect the reality that’s about to hit.
That is, there is literally no liquidity up and down the options chain for any expiry, nor are prices in any way conducive to combinations or pairings. A steep decline is imminent.
The above is the cheapest, safest means of profiting from EXPO’s coming slide.
Breakeven arrives at $113.14 – a decline of 1.6% from the stock’s current level.
Maximum gain is unlimited.
Maximum loss is $6.86 (Difference between long CALL strike and short price plus cost of long CALL).
The King is in the field. Rosh Chodesh Elul. Speak to Him. The time is here.
With kind regards,
Hugh L. O’Haynew