Fly had an excellent post today explaining reasons to short Auto companies. If the house does not pass this bailout you can kiss your these companies goodbye. Going through Fly’s list tonight, I must say it is super ugly for the industry.
Here are a few names at critical points:
AutoNation, Inc. [[AN]] Short below 10.75
AmeriCredit Corp. [[ACF]] Short below 9.50
Advance Auto Parts, Inc. [[AAP]] Short below 38.00
[[CRMT]] Short below 17.50
Copart, Inc. [[CPRT]] Short below 37.50
Cummins Inc. [[CMI]] Short below 37.85
Note: These are the new financials, should the bailout not go as planned, you will want to be familiar with these names.
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Short them now or wait until the bill fails and try and catch them in the five minutes it takes for them to go to zero? Or wait until the bill passes, they get a bounce, then Monday reality sinks in? More!
don’t forget old BOTD put favorites:
RYDER DIE (R)
CONWAY (CNW)
wanna rent a (CAR) ??
Even if a bailout bill passes, I believe some of the auto names you mentioned will still be in serious trouble, even if the liquidity comes back to loans, it may not happen fast enough for all of them to make it.
You’re using puts to short the ones that are on the no-short list? or can you still short them as long as you locate shares?
Yes, my WB position is actually worth something.
congrats RC. you deserve it.
I’m going jump in this pool of blood somewhere in here SPX 1060-1090. Let’s Do This! 😀
My “poor man” fundamental analysis doesn’t think that Autozone would be coupled with the rest. Since noone is out getting financing or buying new, they’ll have to buy parts at AZ to fix up their ford pinto.
Are there any auto companies that do a majority of their business with the state of California? It looks like they are a little short on coin.