CPB is a crazy buy (imo) right now. It is currently at 2003 prices, ~1990 prices when adjusted for inflation. Also consider that since 1990, it has decreased outstanding shares from ~400 million shares to ~300 million shares. This shows that beyond the straightforward discounted price comparison, each share controls somewhere around 20-30% more of the company, i.e., each share is more valuable. Further consider that their revenue has increased consistently the last few years (~8 billion in 2018 vs ~10 billion today) (I cannot find historical data back to 1990 unfortunately). If that is not enough for you, take a look at their dividend yield at over 7% right now. Momentum traders are all out because it has been bearish for years. Now is the time to step in if you're a dividend trader or value trader. Yes, their margins have been cut a bit from inflation and tariffs, but CPB has survived many recessions and maintained consistent dividends through them.
Personally, I feel so confident on this trade I finally decided to give options trading another go. If you're unfamiliar with futures or find them to be too risky, you can skip this paragraph. I bought a January 2028 call with strike price of $30 for $1.45. If it has a massive up day after all this selling, this can easily be a quick 100% profit. If I understand chatGPT correctly here, its IV is relatively low because it has been consistently going down, so there's profit on the volatility in addition to the actual price movement (delta I think?).
If all of this is not enough to convince you CPB is priced at criminally low prices, consider the fact that they have fallen about 15% in the last week despite only seeing ~5% drop in profit margins. What is the justification for that kind of tumble, especially on a blue-chip food stock?
Also, just look at that crazy low RSI on the month chart, literally at historic lows for the company (feel free to look at other time frames, they are also pretty beaten down).
The biggest potential issue I see is that they do have a relatively high amount of long-term debt historically from recent acquisitions, but almost everything else about this trade looks insane to me.
Disclaimer: I am not a financial advisor. The content on this post is for educational and informational purposes only and should not be considered financial advice. You should consult with a professional to determine what may be best for your individual needs.
Personally, I feel so confident on this trade I finally decided to give options trading another go. If you're unfamiliar with futures or find them to be too risky, you can skip this paragraph. I bought a January 2028 call with strike price of $30 for $1.45. If it has a massive up day after all this selling, this can easily be a quick 100% profit. If I understand chatGPT correctly here, its IV is relatively low because it has been consistently going down, so there's profit on the volatility in addition to the actual price movement (delta I think?).
If all of this is not enough to convince you CPB is priced at criminally low prices, consider the fact that they have fallen about 15% in the last week despite only seeing ~5% drop in profit margins. What is the justification for that kind of tumble, especially on a blue-chip food stock?
Also, just look at that crazy low RSI on the month chart, literally at historic lows for the company (feel free to look at other time frames, they are also pretty beaten down).
The biggest potential issue I see is that they do have a relatively high amount of long-term debt historically from recent acquisitions, but almost everything else about this trade looks insane to me.
Disclaimer: I am not a financial advisor. The content on this post is for educational and informational purposes only and should not be considered financial advice. You should consult with a professional to determine what may be best for your individual needs.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.