Key insights
- A value investor highlights a bullish options trade on Rayonier (RYN), citing its strong balance sheet, cash flow, and perceived undervaluation due to the PotlatchDeltic acquisition. The author believes RYN will outperform during a market correction. While a single investor's opinion carries limited weight, the mention of a large options position suggests potential short-term price support.
Hello Value Investing members,
I have been a member for a little while, and this is my first post. I previously was a capital markets credit analyst (underwriter) for large companies with a $10B+ market cap. I also have been a successful trader for 13 years. My trading strategy consists of finding large capitalization companies with decades of operations that are trading at technical lows. I prefer companies that have solid revenue (with nice margins), a STRONG balance sheet, and excellent operating cash flow/free cash flow. Rayonier is a perfect example.
My strategy does goes against the trend (trend is your friend) and uses derivatives. For newer investors, I'd recommend just building a long-term position by buying shares, reinvesting dividends, and opportunistically buy shares on dips to lower your dollar-cost-average.
This is a fantastic defensive stock that I believe will generate significant Alpha compared to index holdings. Index holdings are on a bearish downward/sideways trend as the market pauses and catches its breath and everyone reevaluates Macroeconomics and the impact of current geopolitical activities (Iran and gas prices).
I'll write a huge detailed thesis HERE! If people care and want to understand my rationale. For now, I'm just going to post my holdings and my financial spreads. If you would like the analysis just ask.
Note: my adjustments for EBITDA consist of working capital adjustments, and non-cash adjustments.
Oh, I just realized you can't post pictures I wanted to show my financial spreads from excel and a picture of my holdings. Nevertheless, I'd love to have a discussion with anyone :) I think this will be a great long-term trade. The acquisition of PotlatchDeltic was perceived very negatively, which provides an excellent price point to enter for serious long-term mindset investors.
The chart is very similar to AT&T a year or two ago. I made a killing on that trade and posted a 57% gain on just stock price appreciation alone, not including my derivative gains.