Travelzoo Inc (NASDAQ:TZOO)

CAPS Rating: 2 out of 5

Travelzoo advertises flights, hotels, and other travel deals online and by email.


Player Avatar TrackMagicFormul (84.71) Submitted: 11/21/2012 11:20:50 AM : Outperform Start Price: $19.15 TZOO Score: +4.68

Investors should consider selling puts. You can achieve some very high annualized returns at strikes significantly below the current price. e.g.

Jan 14 $10 strike at $2.40 has 50% discount and 20% annualized return. (but very large spread)

Member Avatar TrackMagicFormul (84.71) Submitted: 5/22/2013 10:49:24 AM
Recs: 0

With TZOO at $29.66, the $10 put LEAPS are almost worthless, trading around 35¢. With 8 months until expiration, it might be wise to close the position early:

$2.05 of profit on $7.65 of cash over 6 months is a 26% return, 60% annualized. Continuing to hold the $9.65 cash to expiration for the additional 35¢ can only generate a maximum 3.6%, or 5.5% annualized. I would close and use the cash elsewhere.

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