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Hawk’s Nest

JELD-WEN (JELD) Options Signal Leads to Major Profit

by | Oct 5, 2020

On 9/14 we flagged an unusual large ITM put sale in JELD-WEN (JELD) and wrote the name in depth describing its strong position in Repair/Remodel in the current environment.

JELD shares went on to climb more than 20% in the next three weeks.

Here was the original write-up:

“JELD-WEN (JELD) nice two week base forming and 1500 April $25 ITM puts are sold to open for $6.20, a name lacking notable open interest outside of 1000 April $22.50 calls sold to open back on 8/21. JELD shares traded down to $7 in March but have rebounded strongly and the weekly chart showing room to make a run back to $25. The $2.07B maker of building products, primarily doors and windows, trades 12.3X Earnings, 0.5X Sales and 10.2X FCF with a levered balance sheet. JELD revenues are seen growing 4.5% in 2021 after declining in 2020 while EPS seen up 13.7% this year and 23% next year. JELD beat estimates on 8-4 with revenues down 11% Y/Y but showed margin expansion. JELD has been expanding into Repair/Remodel as the largest global opportunity. It has made 14 bolt-on acquisitions since 2015 and targeting more deals while also looking to bring down debt via its FCF. Analysts have an average target of $22.50 and short interest is minimal at 1.7% of the float. BAML upgraded to Buy on 8/7 with a $27 target, encouraged by better execution and cites strong pricing power with solid demand in its markets. Hedge Fund ownership fell 13% in Q2 filings.”