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ULTA Options Among Most Expensive For Consumer Stocks Ahead of Earnings

May 28, 2019

 

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  • “Top Buy” Ulta Beauty (ULTA) continues to have some of the most expensive options among large-cap consumer stocks ahead of its earnings announcement this week.  Given such wide implied-realized spreads, we are definitely biased to finding ways to sell volatility while also expressing a bullish bias.

 

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  • Our favorite “Top Short” Tesla (TSLA) also has some of the most expensive options for us large-cap consumer stocks.  Given our negative bias towards the stock over the past few months, we are biased to short call spreads here to take advantage of the rich implied volatility levels.

 

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  • “Top Buy” Autozone (AZO) has some of the cheapest options among our universe of large-cap consumer stocks.  OTM Call spreads could make sense here.  Definitely worth checking out.

Stocks With Most Expensive 30-Day Volatility (Percentile)                    

Name Ticker 30-Day
Implied Volatility
90-Day
Implied Volatility
30-Day
Percentile
90-Day
Percentile
30-Day Percentile for
Implied-Realized Spread
90-Day Percentile for
Implied-Realized Spread
The Kroger Co. KR 41.73 34.21 99.21% 94.84% 92.06% 77.38%
The Gap, Inc. GPS 52.23 42.89 98.41% 95.83% 90.87% 46.83%
Ulta Beauty, Inc. ULTA 42.76 35.85 97.22% 88.10% 71.43% 71.03%
The Michaels Companies, Inc. MIK 58.74 50.23 96.43% 98.02% 63.49% 65.87%
Tesla, Inc. TSLA 70.51 64.93 92.26% 96.83% 95.24% 100.00%

 Stocks With Most Expensive 90-Day Volatility (Percentile)  

Name Ticker 30-Day
Implied Volatility
90-Day
Implied Volatility
30-Day
Percentile
90-Day
Percentile
30-Day Percentile for
Implied-Realized Spread
90-Day Percentile for
Implied-Realized Spread
Herbalife Nutrition Ltd. HLF 31.81 35.8 65.48% 99.21% 44.84% 97.22%
The Kraft Heinz Company KHC 30.01 32.85 75.79% 98.81% 77.38% 100.00%
The Michaels Companies, Inc. MIK 58.74 50.23 96.43% 98.02% 63.49% 65.87%
Tesla, Inc. TSLA 70.51 64.93 92.26% 96.83% 95.24% 100.00%
The Gap, Inc. GPS 52.23 42.89 98.41% 95.83% 90.87% 46.83%

   

Stocks With Cheapest 30-Day Volatility (Percentile)

Name Ticker 30-Day
Implied Volatility
90-Day
Implied Volatility
30-Day
Percentile
90-Day
Percentile
30-Day Percentile for
Implied-Realized Spread
90-Day Percentile for
Implied-Realized Spread
frontdoor, inc. FTDR 37.78 41.15 0.85% 3.42% 16.24% 10.26%
The Wendy's Company WEN 20.32 22.69 1.59% 1.59% 19.44% 14.68%
D.R. Horton, Inc. DHI 23.78 28.86 1.59% 21.43% 72.62% 91.67%
Service Corporation International SCI 16.33 19.82 1.59% 6.35% 33.33% 53.57%
Church & Dwight Co., Inc. CHD 15.97 17.08 2.38% 3.57% 30.16% 91.67%

Stocks With Cheapest 90-Day Volatility (Percentile)                    

Name Ticker 30-Day
Implied Volatility
90-Day
Implied Volatility
30-Day
Percentile
90-Day
Percentile
30-Day Percentile for
Implied-Realized Spread
90-Day Percentile for
Implied-Realized Spread
AutoZone, Inc. AZO 19.69 20.87 3.97% 0.79% 17.86% 56.75%
The Wendy's Company WEN 20.32 22.69 1.59% 1.59% 19.44% 14.68%
Macy's, Inc. M 33.55 37.22 25.00% 1.59% 87.70% 92.86%
Flowers Foods, Inc. FLO 19.38 19.66 2.38% 2.78% 13.89% 49.60%
frontdoor, inc. FTDR 37.78 41.15 0.85% 3.42% 16.24% 10.26%

 

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