3TL: Cintas drops on bad earnings report

By Jim Pearce • December 22, 2016

For any of you who acted on my optional “3TL alert” last week, you may want to take a look at the value of your put options tomorrow since the stock is tanking in the after market this evening due to the disappointing earnings report it just released. Since this is not an official SW portfolio holding there is no specific buy/sell advice associated with this alert.

Update: CTAS is down more than 5% in this morning’s trading, so any put options you own on it should have increased significantly in value since yesterday. It just crossed under its 50DMA and appears to be headed towards its lower Bollinger Band value near $112, so that may be where it levels off today.

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Diamond Bob

12/23/16 ‐ 10:21am ET December 23, 2016 at 10:21am ET

Thanks Jim, Really nice return. I just wish I had bought more contracts. 100+% return in 11 days. WOW!

Emile

12/23/16 ‐ 10:22am ET December 23, 2016 at 10:22am ET

Thank you for this – cashed out today and I look forward to similar recommendations – a very Happy Christmas to you

Roger Dehring

12/23/16 ‐ 10:26am ET December 23, 2016 at 10:26am ET

Good morning, Jim,

And Merry Christmas to you and all at Investing Daily.

I did participate in your CTAS trade, although a bit different than your recommendation which seemed too good to pass on. I bought the JAN 115/110 debit put spread and paid for much of it by selling a half position of JAN 125/130 calls. My net cost was $64, including commissions, for every 2:1 contracts of the trade.

With CTAS diving this morning, I closed halfof the put spread for +$1.90 and the short 125 calls for a -$0.03 debit. That gave me a profit of $121 on each 2:1 combination, while still holding half the put spreads and NO RISK on the short calls.

Will put a limit order in for the remaining contracts at $4.50 and enjoy the holidays.

Thanks for this trade, it couldn’t have worked better!

Roger

black arrow

12/23/16 ‐ 11:24am ET December 23, 2016 at 11:24am ET

Characteristically outstanding sir!
Happy Holidays

Roger Dehring

01/09/17 ‐ 1:36pm ET January 9, 2017 at 1:36pm ET

Greetings, Jim,

With January expiration only eight trading days away, I am running out of time for CTAS to tank closer to $110. So I put a limit order ($0.95) in to close the remaining contracts of CTAS this morning. Came back from a doctor’s appointment and lunch a bit ago and saw that it filled.

That gives me a total profit on this trade of $214 on every $64 invested. Not bad for less than three weeks of work.

For that I thank you. Have a great day!

Roger

Jim Pearce

01/09/17 ‐ 2:35pm ET January 9, 2017 at 2:35pm ET

Roger,

I’m very happy to hear it. Great trade!

Jim

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