Wednesday, 3 November 2010

Shorting PLT (Plantronics)

Current Market Capitalisation is $1,800bn. Sales for next quarter estimated to be around $180m. Annual sales say $1,000bn. That is still $800m more than market capitalisation of the company.

Quarterly cash generation "“We generated approximately $25 million in cash flow from operations in the current quarter" from earnings report Plantronics Announces Second Quarter Fiscal 2011 Results.

That is $100m a year. Market Cap is 18x free cash flow. No debt though.

Logitech, Motorola, Jabra all competitors where the items sell for around 50% of the price.

Short Strategy.

40% Shorted now at $37.82 (4000 shares)

Further Positions

20% Shorted at $40.00 (if it gets that far !) So another 2000 shares.
50% Shorted at $42.00 (if it gets that far!) So another 5000 Shares
20% Shorted at $35.00 ( if it falls that far) So another 2000 Shares

Below $34.00 start taking off the short positions at 10% for each 50c below $34.00

So today I have shorted 3000 shares at $37.81.

I have not hedged this against the market, as I feel the market is very high right now. If the market falls another 5% over the next week, I will then go long on the market by the same amount.

1 comment:

  1. Update - I will now close all positions. Good profit made.


About Me

I try and work a broadly market neutral strategy and based purely on fundamentals and my gut feel.