The UPS Strike Is Over… Here’s How to Trade It. Plus, 1 Call Spread I Like
Dear Reader,
I was halfway through an article about trading the UPS strike when I received an announcement.
UPS and the Teamsters reached a possible agreement on a new contract. This agreement would stop the possibility of a strike starting in August.
Right now, the current contract between UPS and the Teamsters is about to end on July 31. If they didn't agree on a new deal, the workers were planning to strike on Aug. 1. The Teamsters Union has around 340,000 members. In June, they voted on whether to allow a strike or not. An overwhelming 97% of them voted in favor of striking.
The two sides started talking again on Tuesday after some difficulties in their negotiations. Now, the UPS Teamsters must vote and decide if they want to accept this new agreement. The voting will happen next month, starting on Aug. 3 and ending on Aug. 22.
So now what?
Well… as traders, we can take advantage.
Trade the Trend
Most traders don’t know the truth about the impact of the COVID-19 crisis on the supply chain. COVID brought the entire global e-commerce market forward five years.
So, the projected demand for e-commerce delivery for 2029… before the pandemic… is now what analysts expect that 2024 demand will be. This will remain a cornerstone of our economy for the future.
In addition,there’s another major trend that most people are ignoring: decarbonization. The shift away from petrochemicals and carbon-based fuels will continue in the future. Part of that is the continued shift away from plastics.
That puts paper-based packaging in focus. I know that we tend to overlook the packaging and paper world, but tree farming remains one of the great supply chain businesses of our time. There are multiple real estate investment trusts (REITs) that focus on lumber. Consider:
Weyerhaeuser Co. (NYSE: WY) is one of the largest timberland owners in the United States, and it operates as a REIT. They own and manage timberlands, primarily for the harvesting of timber used in various applications, including lumber production.
PotlatchDeltic Corporation (NASDAQ: PCH) is another prominent lumber REIT that owns and manages timberlands primarily in the Southern and Northern regions of the U.S. They engage in the sale of timber, wood products and other real estate-related assets.
Finally, Rayonier Inc. (NYSE: RYN) is a timberland REIT that operates in the U.S. and New Zealand. They focus on the sale of timber and other forest products, and engage in the leasing of their properties for recreational purposes
But let’s really go a step further... Let’s focus on the actual materials.
A Call Spread I Like
At the cellulose level… I’d consider Rayonier Advanced Materials Inc. (NYSE: RYAM).
This company is a global supplier of cellulose-based products used in various industries, including high-purity cellulose specialties, commodity viscose and absorbent materials.
RYAM holds a leading position in its cellulose specialty market, giving it a competitive advantage and allowing it to capitalize on the growing demand for sustainable and innovative cellulose-based products. With operations and customers worldwide, Rayonier Advanced Materials benefits from international growth opportunities and diversification across geographies. As sustainability and eco-friendly practices gain prominence, the demand for cellulose-based products will likely increase, presenting growth opportunities for the company.
The company rocks a Piotroski F score of 8, and trades for a staggering 40 cents on the dollar compared to its tangible book value. This is a low-risk name with a steep potential reversion upside.
Traders can buy the January 2024 $4.00 call for $1.55, and sell the $5.00 call for $1.00, creating a call spread. This will cost about $55, meaning investors have downside protection through January at $4.55 per share.
The upside to this trade is capped at $6.00 per share, given the call that is sold on the spread. But the numbers on this trade look fantastic.
The probability of profit is 55.6%, the breakeven is $4.55, and the upside return is 80%. To your wealth, Garrett Baldwin P.S. Please let me know if you have any feedback, questions about today’s issue or anything else. Just email us at hubfeedback@wealthpress.com. *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. _________________________________________________ The Mega-Cap Rally Rages on… Does Your Portfolio Look Like This? Most of this year’s big gains have been on the back of what’s being called the “Magnificent Seven.” You know the names…
Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Tesla and Meta.
But there’s a subset of stocks that are blowing these mega-caps out of the water right now that hardly anyone knows about!
Some of them are up 300%, 400%, even 500% or more!
Roger Scott calls them “Code Breakers.” And right now, with the bear market 20% off the lows, he’s targeting the most explosive Code Breaker stocks for high-probability trades. _____________________________________________ Market Momentum is Green
Momentum remains green, but there is some inherent weakness in the Nasdaq 100 (QQQ) today. The Fed will raise interest rates by another 25 basis points on Wednesday. The move could spur a bit of a sell-off. If so, you’ll want to scoop up all of the positions in the Tactical Wealth Investor portfolio. Sign up now. I’ll be releasing my next pick next week. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. ________________________________ Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered!
Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3…
Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account:
To download to your iPhone, click here.
To download to your Android device, click here.
After the download is complete, please create an account.
NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.”
Download Telegram on your desktop:
Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer.
To download onto your PC, click here.
To download onto your MacOS, click here.
Then add the TradingPub channel and you’re done: https://t.me/+9_jjnFuAvno0MjNh
See you there!
Garrett |
