Put Options on GBX on 8/29/2022

The Greenbrier Companies, Inc. (GBX) designs, manufactures, and markets railroad freight car equipment in North America, Europe, and South America.   Stockwinners

It operates through three segments: Manufacturing; Wheels, Repair & Parts; and Leasing & Services.

The Manufacturing segment offers conventional railcars, such as covered hopper cars, boxcars, center partition cars, and bulkhead flat cars; tank cars; double-stack intermodal railcars; auto-max and multi-max products for the transportation of light vehicles; pressurized tank cars, non-pressurized tank cars, flat cars, coil cars, gondolas, sliding wall cars, and automobile transporter cars; and marine vessels.

The Wheels, Repair & Parts segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, and downsizing; operates a railcar repair, refurbishment, and maintenance network.

The Leasing & Services segment offers operating leases and 'per diem' leases for a fleet of approximately 8,800 railcars; and management services comprising railcar maintenance management, railcar accounting services, fleet management and logistics, administration, and railcar remarketing.

On July 11th, GBX reported 3rd Quarter May 2022 earnings of $0.09 per share on revenue of $793.5 million. The consensus earnings estimate was $0.67 per share on revenue of $740.7 million.

Please note that for the first 33 weeks of 2022, U.S. railroads reported cumulative volume of 7,606,648 carloads, down 0.01 percent from the same point last year; and 8,707,653 intermodal units, down 5.5 percent from last year. Total combined U.S. traffic for the first 33 weeks of 2022 was 16,314,301 carloads and intermodal units, a decrease of 3 percent compared to last year. Shares have fallen below a support level. Lower share prices are expected.

 

Entry Point: $30.09

Trading Range: $28.01 - $53.46

Trade

  • Buy 1 September $30.00 Put at $1.00
  • For a net debit of $1.00

Profit/Loss Analysis

  • Breakeven at $29.00
  • Maximum profit is unbounded
  • Maximum loss is ($100.00) at strike of $30.00

Closing Summary

  • Sold 1 September $30.00 Put at $2.60

Position closed on 9/8/2022 at price of $2.60 with a 160.00% gain in 10 days.

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