fifw.
I've held a relatively large position with this company for a while; and I've been highly disappointed in its performance (to the point about not being able to hold above 45). To some extent I think that a small part of the problem we have is that the CEO of the company has a recently demonstrated propensity to sell some of his shares when PZZA reaches towards 45. Granted that he has a right to do that, it seems to me that it does have a tendency to push share price down. For whatever reason, 25-30% company growth has NOT yielded growth in stock price. It has, on the other hand, yielded reduced PE ratio. (if you think 30 is high now, go back a couple of years)
Based on my own direct experience, I've taken the (mental) position that while I'm not particularly inclined to dump what I have, I am by golly going to work gaining a degree of return. And, I'm using numbers similar to yours: 45=can't hold. 36-38= should bounce.
So. Most recently, I've sold covered calls (July 45s) If PZZA goes above 45, history suggests it won't hold. If its above 45 when options expire and if I'm called, I have an expectation of being able to buy shares back at somewhat less than that. Below 40 (remember, last fall, PZZA hit a low of @30), PZZA is a candidate for buying (either stock or (in my case, my preference - longer term calls). |
