— Presenting a bull case for Global Ship Lease ($GSL). Stock closed at $21 on Friday and I believe within a year this could be up +50% or more from here. This company trades at less than 1x sales, only 1.4x EBITDA and only 2.3x price to earnings. Balance sheet leverage has sharply come down from 8x some five years ago to less than 2x as they use high FCF to pay down debt. The could be debt free within 6 months. Meanwhile, rising container prices are huge positive tailwinds for stocks. Trade: Buy GSL stock for $21.15 or less (prefer buying stock because you get 7.1% dividend yield). Alternately, buy June 20 calls for $2.20 or less. See chart below.
— Preview of upcoming bullish article on home page by Jay about TKO Group ($TKO) which owns UFC and WWE. About 51% of TKO is owned by Endeavor Group ($EDR) which saw unusual upside call buying on Friday as we discussed in chat room. Keep an eye on both of these stocks.
— Lastly, presenting a bear case for Cummins ($CMI) based on ACT Class 8 orders, demand/supply dynamics, freight prices and other things. But we don’t want to take a position in put options ahead of earnings which comes out during the first week of February. Let’s wait until earnings is out then we will proceed depending on price action.
