New Trade Idea – Long Cisco Systems (CSCO) Hedged With Short S&P Index Pair Trade In Anticipation Of CSCO Outperforming The S&P 500 Index – Alert Published 06/12 Shiraz Lakhi
I am currently long Cisco Systems (symbol: CSCO), based on strong fundamental argument to the upside (click on article below, to view analysis). The long position in CSCO IS fully hedged via dollar-neutral long CSCO/short SPY pair trade strategy, in anticipation of CSCO outperforming the S&P 500 index.
Cisco Systems, a tech company operating within the networking and communication devices industry, generates a current free-cash-flow of $9.25 billion (based on trailing 12 month data), with an enterprise-value of $58.1 billion. The free-cash-flow-yield (FCF/EV) is therefore 15.9%, offering strong upside. Additional positives in favor of CSCO include a book-to-market (based on historical cost) of 0.55, a low (relative to industry) price/cash ratio of 1.96, and a low debt/equity ratio of 0.81 – by Shiraz Lakhi.
Brazilian TAM S.A (TAM) Offers Solid Upside On Robust Free Cash Flow Yield – Currently Holding A Long Position In TAM With S&P Hedge – Original Idea Posted 06/12 Seeking Alpha By Shiraz Lakhi
With a 22.9% free-cash-flow-yield cushion, TAM offers strong upside, despite the current downturn in the airline industry. Operating within the major airlines industry (Brazil), TAM generates a current free-cash-flow of $462.8 million (based on trailing 12 month data), with an enterprise-value of $2.02 billion. The free-cash-flow-yield (FCF/EV) is hence a strongly bullish 22.9%. Additional metrics in favor of TAM include a low price/cash ratio of 2.98, return on equity (ROE) of 47.87% (based on trailing 12 month data), a low price/sales ratio of 0.48 (consensus bullish), and a low (relative to industry) debt/equity ratio of 4.28. I am long TAM, with a dollar-neutral hedged short position in the S&P index ETF (symbol: SPY), in anticipation of TAM outperforming the S&P – by Shiraz Lakhi.
Computer Sciences Corporation (CSC) Vs S&P 500 Index (SPY) Offers Opportunity For Market-Neutral Hedged Pair Trade – Original Alert Posted 06/12 Seeking Alpha By Shiraz Lakhi
I am currently long Computer Sciences Corporation (CSC) with a dollar-neutral short S&P (SPY) hedge, wagering on CSC outperforming SPY over the next 4-6 weeks. Computer Sciences operates within the information technology services industry, and currently generates a free-cash-flow of $1.01 Billion (based on trailing 12 month data), against an enterprise-value of $6.61 Billion. The free-cash-flow-yield (FCF/EV) is a healthy 15.3%, offering significant upside potential. Additional data in favor of CSC include a low PEG ratio of 0.91, low price/book of 0.76, a book-to-market of 1.32, and analyst mean target of $43.85 per share – by Shiraz Lakhi.