Hey guys! Last week I published an idea about going long PYPL depending on how it acted around earnings. Clearly, the stock got smoked (along with tons of other high multiple names, as of late: twitter.com/cha...535662641590287?s=20).
However, all may not be lost for longs. We are approaching an area of historical demand for the stock, which may hold true once more. In addition, the stock is heavily "oversold", indicating that with one or two more days of selling, it may see relief. All of these high multiple names are being sold by momentum CTA's and weak hands, which should be to a long-term oriented investor's benefit. Additionally, the valuation has come down quite a bit from the peak of (EV/EBITDA) of 83 in Jan to 41 as of last close. For the margins and growth, this may be a compelling entry point to longer term funds etc.
I'm looking at taking some of this long starting around 180, if it gets there. I'm also looking at selling 165 puts, which yield 3.3% - an almost 14% annualized yield. On the shares, I might take a loss under 165 and look for a better entry if the stock breaks that level, but I don't think this is a high probability outcome.
GL all!
However, all may not be lost for longs. We are approaching an area of historical demand for the stock, which may hold true once more. In addition, the stock is heavily "oversold", indicating that with one or two more days of selling, it may see relief. All of these high multiple names are being sold by momentum CTA's and weak hands, which should be to a long-term oriented investor's benefit. Additionally, the valuation has come down quite a bit from the peak of (EV/EBITDA) of 83 in Jan to 41 as of last close. For the margins and growth, this may be a compelling entry point to longer term funds etc.
I'm looking at taking some of this long starting around 180, if it gets there. I'm also looking at selling 165 puts, which yield 3.3% - an almost 14% annualized yield. On the shares, I might take a loss under 165 and look for a better entry if the stock breaks that level, but I don't think this is a high probability outcome.
GL all!
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jan puts*
