A mobile America is something that’s inherent in our national zeitgeist, as we have the freedom to roam from state to state in search of better opportunities, better climates, better places to raise children and better places to retire, suggests Jim Woods, options trading specialist and editor of High Velocity Options Alert.
One company helping facilitate this freedom of movement. Formerly known by the parent company’s name, Amerco, U-Haul is an iconic brand that now trades under its own name, U-Haul Holding Co. (UHAL).
The company operates a fleet of 176,000 trucks, 126,000 trailers and 46,000 towing devices. The company also provides self-storage rentals, moving boxes, packing supplies, LPG (propane) refill, trailer hitch and wiring installation, storage container rentals and other services.
So, why UHAL now? Well, the company is slated to report earnings on February 8, and a strong showing will, I suspect, be a nice catalyst for the shares. Already, the stock has spiked some 10% in the nascent 2023, and that push higher can continue with strong results.
Yet perhaps more importantly, the likely economic downturn ahead is going to force more dislocation and more relocations and more moves toward proverbial “greener pastures.” That circumstance is good for U-Haul, and I think it will be good for those of us who own call options in the stock.
Executives from the UHAL team rang the opening bell at the NYSE, which is a nice ceremonial feather in its cap. But of course, we are all about high-velocity wins in this service, and here is where I want us to move it on over into and out-of-the-money call options position that I expect to do just that.
For those comfortable with buying options, our recommendation is to buy the UHAL June $75.00 calls at market. The calls last traded for $2.40 and expire on June 16.
Now, there isn’t significant volume or open interest on these contracts, but the low nominal price should make up for the lack of action here. And although there may be a bigger spread than we like, I think the time factor will allow us to profit in this one.
