Security in Focus: Williams-Sonoma ($WSM)
There are things we like and don't like on $WSM here. Balance Sheet looks healthy. Rev growth looks fine. EV/EBITDA <8x, we like. Operating leverage and EPS growth past 4Qs. Reason to believe that 1Q19 could be fine (reporting May 25, 2019). 20% short interest, scarier than we are accustomed to. Here's how we would theoretically play this. Sell to OPEN (Naked, High Risk) Puts May 17 $57.50 Strike for $1.25 per contract (indicating we're a buyer of common at $56.25). Should prices come down to this level, we will evaluate the security and market to further hedge risk (which remains, derivative and unhedged).