ZIM Dividend $6.40 per share: High Beta, High Short Interest

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It’s a shipping stock. Heading into a slowdown, prices of the stock have come way off their highs. Next year’s consensus numbers are all over the place. From $-8 to $8!!! Do you think after divesting the dividend it’s a worthwhile stock to own? Does its current price represent a good valuation on future earnings? I really only have questions right now…

That’s some dividend payout. But please remember that the stock has only traded for less than 2 years. The tally is: 2021 (y1) $24.35 and for trailing 12 months: $29.55.

In yesterday’s trading, it soared over $24 before settling back. How are the options? Let’s take a look. Well, there is some depth at the ATM options and OTM which is reassuring (unlike Dropbox).

Given my track record on owing odd stocks… I’m tempted to ignore it. But with a beta of 2 and short interest approaching 20%, I can sure see why premiums are as high as they are. So it’s a gamble.

Not just poor timing!

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You may wish to re-examine your selling strategy if you didn’t expect the shares to be called away. What is your plan B when that happens? Well, if you’re long COIN, one sensible strategy is the wheel with a good price point. So start selling CSPs. March 24th CSPs at $45 are selling at an attractive 1+%. Earn while you’re waiting. Bitcoin is so volatile that you may well hit the price point anyway.

I wouldn’t be purchasing COIN contracts: For me, it fails on a number of important points. #1 the company isn’t profitable; #2 bitcoin is ATM a limited scenario currency; and #3 it doesn’t meet my pf limits *(yet)* ie. a position in COIN is almost double my position limit. So … that’s my analysis.

One of the points that annoys me in my own ownership of stocks is the idea that I have to hold on to shares, except when they peak. I guess it’s FOMO. Well, congratulations you made money… you didn’t sell at a loss. Either way, time to move on!

My unpostable list of weeklies: updated 1/15

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The complete list of weekly stocks is here:

https://www.cboe.com/available_weeklys/

One presumes that you are looking at stocks under $50. Well, these are the basic weeklies between $5 and $50 with a positive P/E as of January 13th. To find a suitable option, you’d need to put them through a screener. I prefer to pick from a much shorter list of contenders. I never sell anything below $10 or above $30. I try to avoid earnings (though I often fail). I say away from things I don’t understand (like Bitcoin or hot trends)

Good luck.

https://docs.google.com/spreadsheets/d/1DJd1gl_WLi995cvoZE37V6klzVh-sFHf-yFhDAoXaac/edit?usp=sharing

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