CMG - CAVA: Put Selling Can Yield A Potential 14% Return
2024-05-14 04:51:58 ET
Summary
- Popular fast-casual restaurant chain CAVA has seen its stock price rise over 140% following a post-IPO price trough.
- CAVA stock is now trading at an expensive multiple, which may deter new investors from entering the story.
- That said, the company does boast strong operations that are producing solid margins and growth. Finding a way to get into the stock seems optimal.
- Utilizing a 'short put' approach may be best for maximizing risk-reward, generating strong returns, and potentially buying shares at a discount to the market.
- We re-iterate our 'Buy' rating and recommend a net-long put selling strategy for interested investors.
When it comes to a delicious and relatively healthy lunch, it's hard to beat CAVA ( CAVA ).
The fast casual restaurant chain is loved by many, but the stock has only recently begun to find its footing, up more than 140% following a protracted price trough that occurred post-IPO last year:
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