Sometimes, Packaging is All You Got… (PKG, ORCL, SOXL/QCOM)

Posted on August 14, 2023

It’s all about the marketing, friends.

That’s what drives business these days.


Because there’s no such thing as quality anymore.

When everything is made in China, it’s the packaging that counts.

Wrap it up good and people will buy it.

Without thinking…

Don’t Think, Just Buy!

Packaging Corporation of America (NYSE:PKG)

Headquartered in Lake Forest, Illinois, and operating since 1867, our corrugated box makers certainly get the hat tip for longevity.

But the stock…

Well, she got a bit soggy on the door step.

That said, we’ve found a way today to squeeze a potential 3267% out of her!

We’ll return in a moment with all the pertinent details, but first—

Two Closing For a Sock-You-in-the-Ribs Bagful

Our ORCL trade from June 22nd has now borne fruit.  The dispatch was called An Oracular Spectacular and it recommended you sell the ORCL December 15th 130/135 CALL spread for $1.60 and buy the ORCL December 15th 115/110 PUT spread for the same $1.60.  Zero Premium was the result.

And now…?

We’re selling the PUT spread for $2.15 (8.00/5.85) and offloading the long 135 CALL for $1.71 for a total of $3.86.

As to the short 130 CALL, we’re going to leave it be.  It’ll either wither or we’ll repurchase it for cheaper later.

As of Friday’s close, the stock would need to climb almost 15% to put that option in-the-money.

And don’t forget our $3.86—add that to the mix and ORCL would need to ascend to $133.86 before we entered the red.

All told, a better than 18% move would have to transpire before we lost any money.

And in a top-heavy, downward-biased market, that looks like good odds to us.

If the short CALL dissolves as we expect, count it a 2473% win (after accounting for minimal commissions)!

Semiconductors Savaged!

As we also expected, our SOXL/QCOM pairs trade of June 1st has paid off handsomely in relatively short order.

The directive was called Semiconductors are Next, and it urged you to sell the QCOM September 15th 125 CALL for $4.50 and buy the SOXL November 17th 20 PUT for $4.50.  Zero Premium again.

Today, the QCOM CALL can be repurchased for $0.82 and the SOXL PUT sold for $3.00.

Get it done, and you exit with $2.18 NET on nothing spent.

Adjusted for minimal commissions gives you a Mayan pyramid profit of 1353%!

In my day, ‘bag-boy’ was a badge of pride!

Anywho, PKG boasts the following mixed fundamentals—

  • First, P/E is 16.07, while…
  • Annual Yield is 3.29% and…
  • P/B is 3.52.
  • Earnings-wise, the company delivered the following terrible numbers on July 24th:
  • Q/Q Sales FELL by 12.70%, and…
  • Q/Q EPS FELL by 29.90%
  • Analyst consensus for the coming year is for an additional EPS DECLINE of 2.58%, and…
  • Over the next FIVE years, DECLINES of 14.29% per year!
  • And if that ain’t enough… insiders have been active—for the first time in years!—selling 6.2% of their total holdings for some $8 million in just nine days. Which nine days?  Those directly following the latest earnings report, i.e., between July 26th and August 4th.  There will be more to report soon this front, we’re convinced—just that filings require a bit of time before they go public.

Now look at the chart—

May the G-d of Israel, the Al-mighty Creator of Heaven and Earth deliver us our full measure of profit in a simple brown box.

With kind regards,

Hugh L. O’Haynew


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