Oddly enough C-19 provided a huge net boost to earnings to certain small retailers temporarily raising their net margins far beyond what they normally do. Eg. BGFV historical net margin was 0-3% and is now sitting at 9%. I believe this is only temporarily due to increased demand for certain goods last year which in following years will have decreased demand of these goods averaging things out. If there is a contraction like I expect we should see a overreaction to the downside just like the current overreaction to the upside. I estimate the actual fair value could be in the $10-$20 range but think the stock will go a lot lower.
Implied volatility is way to high to short with options right now so I am waiting until I can get a favorable entry. Eventual target $8 or below, where I will become a buyer again.
There are plenty of other stocks with similar setups.
Implied volatility is way to high to short with options right now so I am waiting until I can get a favorable entry. Eventual target $8 or below, where I will become a buyer again.
There are plenty of other stocks with similar setups.