http://media.seekingalpha.com/article/24054 Lamar Advertising -- In Your Dreams! Posted on Jan 12th, 2007 with stocks: LAMR Phil Davis submits: Cramer was buying Lamar Advertising Company (LAMR) this morning and the stock went nuts so we sold (sorry Jimbo) the Feb $70 puts for $1.40, already $1.75! We went bearish on Lamar BECAUSE of Cramer. That company does not and will not make enough money to justify this cap! Yes, they are growing fast -- their P/E will drop from 175 (not a typo) all the way down to 100 next year! Whoa -- let's back up the truck and do a 'mon back on a stock that has a NTA (net tangible assets) of -$550M and $1.8B in debt with no cash ($7M) and only $171M in receivables on $1B in revenues that will generate a whopping 50M (maybe) in profits this year! How much would you pay for this dream company? Cramer says $7B is too cheap! He says someone is going to swoop in and snap this "value play" up because nothing says lovin' like someone digging down deep and piling an additional $7B in debt on top of the $1.8B of existing debt in order to buy this gold mine. The interest on $8.8B in debt at 6% ($524M a year) would be more money than this company has ever made and also more money than it is likely to make in the next 5 years. Boo Yah!
Cramer has been good for some choice swing trades recently. Im sure it has something due with the "rising tide". Combine the tide with the Cramer effect and you have a nice little swing.
Maybe it's not a typo but he sold the Puts because he thought that the Cramer effect would make the price rise and the Puts would devalue. Certainly looks like a big loser over time price-wise...will put it on the list and but Puts when it tops. Could exhaust itself quickly at this pace.