Posted on August 30, 2021
Sherwin Williams Co. (NYSE:SHW) provides colorful chemicals to splash on walls and other surfaces, poisoning those who occupy those spaces thereafter as the inevitable ‘outgassing’ occurs.
But we’re not here to knock the corporate world and its myriad means of profiting from wholesale death and disease.
Why get into all that?
We’re here to make money.
That way, we’ll no longer have to rely on their lunatic products, services and brandings.
We’ll have our own operating farms and gardens to sustain ourselves.
We’ll play the game…
Sherwin Williams missed both revenue and earnings estimates last month, but the stock kept climbing.
Because that’s the world we live in.
There’s talk that the purchase of the SIKA line of chemical adhesives will boost their numbers down the road – and it’s very possible. But not by the margin currently reflected in the stock price.
So just paint over it.
Those insiders, by the way, unloaded to the tune of $120 million over the period – of which a full $83 million was dumped in just the last 30 days!
Do they know something we don’t?
Is their financial hygiene superior to ours?
Did they take more than one towel?
Have a look at the daily chart –
Technically, we have –
And that’s a long way down…
Now check the weekly –
And that trade is shaped thus –
A Jew and His Money recommends you consider selling the SHW October 15th 300/310 CALL spread* for a credit of $3.50 (9.30/5.80) and buying two (2) SHW October 15th 290/280 PUT spreads** for $1.90 (4.00/2.10) each. Total debit on the trade is $0.30.
Rationale: with precious little upside expected from the stock, we feel safe selling a 10 point spread to earn premium.
We also like the opportunity to buy TWO PUT spreads with the money collected.
That gives us a maximum gain on the trade of $19.70.
While max loss chimes in at $10.30.
Time-wise, we’re in possession of just over 30 trading sessions to book a 7.5% decline for full profit – not an unreasonable expectation considering the market’s current fragility.
Breakeven arrives at $289.70, a decline of just 4.7% from the current price of $302.87.
As we approach the Day of Judgment, we wish you and yours find only favor in the eyes of the Al-mighty living G-d of Abraham, Isaac and Jacob.
And may you bring Him only נַחַת רוּחַ.
With kind regards,
Hugh L. O’Haynew