Trade Update April 19th, 2012: Ok from the title you could tell that this was a low conviction dumb trade, BUT, I may just get bailed out with today’s price action in the broad market……with the stock at $54.90 the Apr 55 Puts that I am long could be back in play ( I paid .775 before earnings)……I am keeping my finger on the trigger and have offered some out at .50 for a wake up if the stock starts to get hit, one day may be all I need to get out of this one alive. stay tuned.
Original Post April 12th, 2012: JBHT: I’m Bored, Bearish, Annoyed & I’m Looking to Throw Some Premium Around
I am obviously bored and pissed, I am looking at a trucking stock for goodness sake.
JBHT reports tonight after the close, the options market is implying about a 3.25% move vs the avg over the last 4 qtrs of about 4.9% (all of them moves higher!). JBHT is a trucking company primarily in North America that has estimated earnings growth of 19%, and sales of 13% in 2012, trading at about 22x this years expected earnings. With the stock up almost 24% ytd, trading at all time highs, I would say it would take a fairly decsive beat and raise when they report Q1 tonight to keep the stock’s current trajectory. And with $4 gas at the pump, this could serve as a serious impediment to margins and cloud earnings visibility for the near future.
I want to make a LOW CONVICTION very near term bet, with defined risk that the stock is priced for perfection and that any hiccups on the results or guidance could cause the stock to come in at least 5% btwn now and Next Friday’s expiration.
TRADE: JBHT ($55.83) Bought the Apr 55 Put for .80 (my avg is .775)
Max loss is .80, break-even on the downside is 54.20, or down about 3%, so basically I am making a directional bet that the stock at least goes down in line with the implied move…..if the stock does nothing post earnings you still have 6 days to earn this out in what could be a volatile week for stocks next week as we head into the bulk of earnings.
AGAIN I HAVE NO PARTICULAR INSIGHT INTO THEIR BUSINESS, BUT TAKING A SHOT INTO AN EVENT WHERE I FEEL THE VOL IS CHEAP AND THE POTENTIAL FOR A NEGATIVE SURPRISE IS DECENT.
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