Options-focused post detailing author-owned positions and rationales, including long calls on Sleep Number, Gray Television, Alight, Evolv, Teladoc, Calumet, and Tripadvisor, and put-based shorts on RCI Hospitality and Shift4 Payments.
RICK — SHORT The author argues RCI Hospitality should be delisted due to missing 8-K filings around material events and treats an FBI raid as a normal occurrence. He expresses the bearish view through RICK put options, with returns expected to track the underlying stock.
I can’t believe this company is still public. In my opinion, needs to be delisted due to lack of 8k filings around material events. FBI raid anyone? No, that is just a Tuesday for these guys.
FOUR — SHORT The author sees Shift4 Payments as having a head-scratching valuation and accounting issues in how it treats acquisitions and stock-based compensation. He uses put options to express a short thesis, with returns expected to track Shift4 shares.
This is one of those headscratching valuations. There are some accounting issues with how they treat acquisitions and SBC comp, but I like this one a lot!
SNBR — LONG The author calls Sleep Number bombed out with serious leverage but sees free cash flow inflecting. He buys call options instead of the common stock, expecting a possible short squeeze and parabolic move, with option returns tracking SNBR.
Stock is completely bombed out and they have serious leverage. Free cash flow looks to be inflecting. Another good example here of where I don’t want to touch the commons, but this thing could squeeze and go parabolic.
ALIT — LONG The author sees Alight as having great clients, a new CEO from Crawford, decent free cash flow, and a healthy balance sheet. Activists sold the payroll subsidiary, and any traction could cause a material rerating; it could also be an accretive acquisition target. He expresses the view via call options, with returns tracking ALIT.
They have some great clients. Activists got the payroll subsidiary sold and blew out. I’m very positive on the new CEO from Crawford. This is a great reason for options. The company has decent free cash flow and balance sheet is very healthy. Any traction and this stock will rerate materially.
EVLV — LONG The author bought Evolv after it tanked on an SEC investigation and management departure, and trimmed some common while keeping upside exposure. He sees room to run from World Cup-related demand and upsells. The position uses call options, with returns tracking EVLV.
I bought after the stock tanked with a SEC investigation and management left. I trimmed some of my commons but still wanted to upside exposure. A lot of room here to run with World Cup and upsells.
TDOC — LONG The author notes Teladoc's growth flatlined and the stock fell from $289 to $8, but free cash flow is positive and he thinks growth could restart. He uses a risk-reversal call/put structure for upside exposure with little cash outlay, with returns driven by the underlying stock.
This stock reached $289 during COVID in 2001. Growth has flat lined and the stock has sold off to $8. Free cash flow is positive and I think could start growing again. The risk-reversal trades gets you exposure with little money out of pocket.
CLMT — LONG The author sees Calumet as complicated but says if Montana Renewables works and becomes significantly profitable, forecast for late next year, the stock could reach the $50 range. He expresses this through call options, with returns tracking CLMT. Many things must go right, which is the stated risk.
Essentially, if Montana Renewables works and is significantly profitable (forecast is for late next year). Stock should be in the $50 range. A lot of things have to go right for this to happen.
TRIP — LONG The author argues Tripadvisor trades at 5x forward earnings and 2x EV/EBITDA, with Starboard engaging management, a paid email rollout, and possible sale of The Fork. He uses a risk-reversal call/put trade and may add leverage, with returns expected to track TRIP.
Forward P/E is 5 and EV/EBITDA is 2 and you have an activist (Starboard) engaging with management. They are rolling out a paid email product and activist are pushing for a sale of The Fork - think Resy for European restaurants. ROIC is obviously very high here.